They Wouldn't Be Able To Find First Base."
There is a rather remarkable hearing playing out right now on Capitol Hill. Harry Markopolos, the whistleblower in the Bernie Madoff scandal, is testifying to a House Committee, and he's basically calling out the SEC for its total incompetence - over a period of several years - in failing to identify the Madoff Ponzi scheme and put a stop to it. Markopolos, who went to the SEC in May 2000, when the Madoff scheme was only about $5 billion, is getting off line after line ripping the SEC a new one. TPM Muckraker has all the details. Some highlights:
• "If you flew the entire SEC staff to Boston, and sat them in Fenway Park, they wouldn't be able to find first base."
• Markopolos discusses Madoff's mob ties: "When you're that big and you're that secrective, you're going to attract a lot of organized crime money, and which we now know came from the Russian mob and the Latin American drug cartel, and when you are zeroing out mobsters, you have a lot to fear. And he could not afford to get caught, because once he was caught. And if he would've known my name and knew he had a team tracking him, I didn't think I was long for this world."
• Markopolos offered to go undercover wearing a disguise to catch Madoff.
• Perhaps the most telling statement: "They (the SEC) were a captive regulator. Mr. Madoff was too big," he just told Congress. "They looked at Madoff and said: 'he's a big firm, we dont attack big firms.'"
That really says it all. The real difference between Madoff's scheme and the rest of Wall Street was that Madoff was more explicitly criminal. But that's it. And the SEC's inability to go after anything substantive on Wall Street turned the place into a deregulated casino.
There is a populist uprising going on in the country right now, as more and more stories like this come out. Which is why Obama's limit on executive pay this morning was significant and important. But the stimulus is being caught in the crossfire, as anything from a position of power is becoming infected with all the talk of theft of taxpayer dollars. The Republicans are being very sanguine, and if they do derail the stimulus or render it ineffective, the next few years will be really terrible and people will just get angrier.