Thursday, March 18, 2009

U.S. Senator Johnny Isakson (R-GA)
Floor Statement on Financial Markets Commission
Remarks as Delivered on the Senate Floor

Mr. President, we were all reminded yesterday, when news of the AIG bonus payouts hit, of the frustration all of us have and all the American people have with the financial difficulties the Nation has had but also what appear to be at best irresponsible acts taking place by many of the financial institutions that, in fact, received Federal TARP money.

I rise to repeat a call that Senator Conrad and I made 6 weeks ago on the floor of the Senate. We created a piece of legislation known as the Financial Markets Commission, a commission patterned after the 9/11 Commission, a commission of seven appointed members--two by the President, one by the Speaker of the House, one by majority leader of the Senate and one by the minority leader, one by the minority leader of the House, and then one by the chairman of the Federal Reserve--seven members given 360 days a year, empowered with a $3 million budget and subpoena power to investigate every aspect of the financial collapse in the United States, whether it is insurance, investment bankers, mortgage bankers, individual managers such as Mr. Madoff in New York or anybody else, and to come back to the American people and to the President a year from now and tell us, to the best of their ability, in a forensic way, what happened. If, in the course of their investigation, they find inappropriate activities, there is the requirement that they refer those to the Attorney General of the United States of America.

It is important that we do this for four reasons. I will go about them briefly.

No. 1, it should be an independent panel that is fully funded and has subpoena power so there is no impediment to gathering facts, finding out the information necessary, and making that report.

No. 2, it should be created by the Congress, but the membership should be appointees who are experienced and knowledgeable in finance, banking, investment banking, and in law, not politicians but professionals who know, just as we had on the 9/11 Commission 2 years ago.

No. 3, there is no question that mistakes were made, but there is no question that some people took advantage of the system. The public expects, I expect, and we should demand that where we find wrongdoing, it is eliminated, pointed out, the individuals who did wrong are held accountable, and we restore some level of confidence in the oversight of our financial system.

No. 4, I think it is time that all of us recognize there is plenty of fault to go around. You could blame a hedge fund. You can blame a Madoff. You could blame an AIG. We have to look in the mirror as well. The second vote I ever cast in the Congress was the vote that repealed Glass-Steagall, put in the Gramm-Leach-Bliley bill. I thought it was good legislation. So did 99 percent of the House and Senate. In retrospect, by allowing the vertical integration of the financial system from insurance and mortgage banking to investment banking and regular banking, we blurred some of the lines that for so many years had protected the integrity of the financial system in America. As a result of that, situations happened, like AIG and Citibank, where vertical integration beyond the original mission of the financial services of the company attracted more money but it also attracted more greed. And it had no transparency.

I think it is critical, at a time and place where we recognize we have had some significant problems, where the American people know it is going to take us time to recover, for us to have a forensic audit of the financial systems of the United States, the regulatory authorities, the legislative bodies, and any individuals who were part of it so that we can learn from the mistakes that have been made, we can put in the transparency that is necessary to prevent it happening in the future, and we can restore the confidence of the American people in the American financial system.

I urge colleagues to look at the Financial Markets Commission, join Senator Conrad and myself as cosponsors. Let's begin finding the answers that all of us seek and that the American public demands.