Monday, January 5, 2008

2 pm - House Financial Services
Hearing on: Assessing the Madoff Ponzi and the Need for Regulatory Reform

Witnesses:
Panel 1:

• H. David Kotz, Inspector General, U.S. Securities and Exchange Commission
• Stephen P. Harbeck, President, Securities Investor Protection Corporation

Panel 2:

• Harry Markopolos, an independent financial fraud investigator for institutional investors and others seeking forensic accounting expertise, as well as a Chartered Financial Analyst and Certified Fraud Examiner
• Allan Goldstein, a retiree and investor with Bernard L. Madoff Investment Securities
• Tamar Frankel, Professor of Law and Michaels Faculty Research Scholar, Boston University School of Law
• Leon Metzger, adjunct faculty member at Columbia University, Cornell University, New York University, and Yale University

Wednesday, January 7, 2008

10 am - Senate Energy and Natural Resources
Full Committee briefing entitled, “Investing in Green Technology as a Strategy for Economic Recovery.”

Witnesses:

• Thomas Friedman, Pulitzer Prize winning author
• John Doerr, Partner, Kleiner Perkins Caufield & Byers (KPCB)

Thursday, January 8, 2008

9:30 am - Senate Energy and Natural Resources
Full Committee Hearing: to receive testimony on current energy security challenges

10 am - Senate Environment and Public Works
Oversight Hearing on the Tennessee Valley Authority and the Recent Major Coal Ash Spill

Witnesses:
Panel 1:

• Tom Kilgore, President and CEO, Tennessee Valley Authority

Panel 2:

• Stephen A. Smith DVM, Executive Director, Southern Alliance for Clean Energy
• William "Howie" Rose, Director of Emergency Management Services, Roane County, Tennessee

2 pm - Senate Homeland Security and Governmental Affairs

Witnesses:

• Charles E. Allen , Under Secretary for Intelligence and Analysis and Chief Intelligence Officer , U.S. Department of Homeland Security
• Arthur M. Cummings , Executive Assistant Director, National Security Branch , Federal Bureau of Investigation, U.S. Department of Justice
• The Honorable Raymond W. Kelly , Police Commissioner , City of New York

Friday, January 9, 2008

9:30 am - Joint Economic Committee
In the Wake of 11 Months of Job Losses, the JEC Will Examine New Employment Figures from Bureau of Labor Statistics and Assess the Need for a Significant Economic Stimulus Package

Witness:

• Dr. Keith Hall, Commissioner, Bureau of Labor Statistics

10 am - House Financial Services
FHA Oversight of Loan Originators

Tuesday, January 13, 2008

10 am - Senate Energy and Natural Resources
Hearing to consider the nomination of Steven Chu to be Secretary of Energy

Wednesday, January 14, 2008

10 am - Senate Veterans Affairs
Hearing on the nomination of Eric Shinseki to be Secretary of Veterans Affairs

Thursday, January 15, 2008

9:30 am - Senate Energy and Natural Resources
Full Committee Hearing: to consider the nomination of Ken Salazar to be Secretary of the Interior

The United States Congress’ House Committee on Financial Services is now calling the Madoff scandal a Ponzi scheme. Hugh calls it "a metaphor for the current financial system and its failures." From his Scandals List (my bold):

Also on December 11, 2008, Bernard Madoff, a former chairman of the NASDAQ was arrested for perpetrating a fraud which lost up to $50 billion in investors’ money. It has been called the largest Ponzi scheme committed by a single individual in US history. This appellation is perhaps intentionally misleading because it distracts from the fact that the whole financial system has been run collectively as an over-sized Ponzi operation. Madoff began his investment firm in 1960. He had consistent profits regardless of market conditions which no one else could reproduce. In 1992, a fund associated with Madoff was investigated but he seems to have escaped any real scrutiny. It appears he operated his scheme for decades. By 2000, his company had several hundred million in assets and it seems to have ballooned into the billions in the Bush years. He was able to get away with his fraud for so long because he held his accounts within his own firm instead of with an outside bank. He had status as a Chairman of NASDAQ. He had successfully dodged one investigation. And with SEC Chairmen like William Donaldson (2003-2005) and Christopher Cox (2005-present) who were rabidly anti-regulationist, he was essentially home free. It took the financial meltdown to do him in. His victims include many retirees, charities, foreign banks as well as many celebrities and wealthy. Some of these certainly knew that what Madoff was doing was too good to be true but as long as he was making money for them they were willing not to ask to many questions. As part of an eventual settlement those who made profits with Madoff will have to return some or all of them to make good in so far as that is possible those who lost their shirts. It is still an open question where the money went, how much was actually lost, and who all was involved in Madoff’s crimes. In any case, Madoff is a metaphor for the current financial system and its failures.

Today, at 2 pm, the House Financial Services will hold a hearing: Assessing the Madoff Ponzi and the Need for Regulatory Reform

Kanjorski Announces Hearing on Madoff’s Ponzi Scheme Washington, DC – Congressman Paul E. Kanjorski (D-PA), the Chairman of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, today announced that the House Financial Services Committee will meet on Monday, January 5, 2009, to assess the alleged $50 billion investment fraud engineered by Mr. Bernard L. Madoff that is now the subject of multiple investigations. The hearing will help to guide the work of the Financial Services Committee in the 111th Congress in undertaking the most substantial rewrite of the laws governing the U.S. financial markets since the Great Depression.

Witnesses:
Panel 1:

• H. David Kotz, Inspector General, U.S. Securities and Exchange Commission
• Stephen P. Harbeck, President, Securities Investor Protection Corporation

Panel 2:

• Harry Markopolos, an independent financial fraud investigator for institutional investors and others seeking forensic accounting expertise, as well as a Chartered Financial Analyst and Certified Fraud Examiner
• Allan Goldstein, a retiree and investor with Bernard L. Madoff Investment Securities
• Tamar Frankel, Professor of Law and Michaels Faculty Research Scholar, Boston University School of Law
• Leon Metzger, adjunct faculty member at Columbia University, Cornell University, New York University, and Yale University

Live streaming at CSPAN and CSPAN Radio (direct real player links: CSPAN, CSPAN Radio) and the committee website.

For later viewing see the CSPAN’S video archive.

x-posted at oxdown.

* thanks Elliot for the reminder!

When TARP czar Neel Kashkari testified last month before Kucinich’s Domestic Policy Subcommittee, in what I can only describe as an example of hell freezing over, Kuchinich and Issa joined forces to expose Kashkari and more generally the entire TARP program as a sham. Favorite line from that hearing was:

kucinich to kashkari: no one questions that you are working hard. our question is who are you working for?

Today at 10 am, Kashkari returns to testify before Barney Frank’s Financial Services committee to defend the TARP from criticisms contained in GAO’s recent oversight report. Frank’s press release described the report’s conclusions:

“The bad news was confirmation by the GAO in its first report about the program that Treasury has no way to measure whether taxpayer funds invested in banks are being used in accordance with the purpose of the law – to increase lending. The much worse news is Treasury’s response that it does not even have the intention of doing so.

“GAO recommended that metrics be developed to apply to how individual institutions are using their share of the 250 billion made available to them. Treasury’s extremely disappointing response is to engage in "further discussions on general metrics for evaluating the overall success of the capital purchase program in addressing the purposes of the EESA."

“By rejecting the GAO’s recommendation that measurement is needed and substituting a vague promise to "evaluate the overall success of the program," Treasury is coming very close to telling the institutions that they will be free to use the funds as they wish.

“Adding this blatant refusal to enforce any lending obligations on individual institutions the continued policy of ignoring the clear intent of the EESA to aid in the reduction of foreclosures put the Treasury perilously close to a breach faith with those who responded to the Bush Administration’s request to establish the program. A public hearing on the issues raised by the GAO report is now essential.”

Maybe we shouldn’t be surprised that this is what happens when a self-described "free market Republican" is put in charge of a $700 billion market intervention. Or that Kashkari was still in business school in 2002 and that before following Paulson to Treasury from Goldman Sachs where he appears to have worked in a completely unrelated field. Was there no one with more experience available?

10 am - House Financial Services
Oversight Concerns Regarding Treasury Department Conduct of the Troubled Assets Relief Program This hearing comes following a report by the Government Accountability Office on the Treasury Department’s implementation of TARP. [see the 12/4/2008 GAO report, TROUBLED ASSET RELIEF PROGRAM Status of Efforts to Address Defaults and Foreclosures on Home Mortgage" and the 12/10/2008 GAO report, "TROUBLED ASSET RELIEF PROGRAM Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency" - selise]

Witnesses
Panel 1:

• Gene Dodaro, Acting Comptroller General of the United States, U.S. Government Accountability Office
• Neel Kashkari, Interim Assistant Secretary for Financial Stability and Assistant Secretary for International Affairs, U.S. Department of the Treasury

Panel 2:

• Jeb Hensarling (TX-05), Congressional Oversight Panel under the Emergency Economic Stabilization Act
• Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard University, and Chair, Congressional Oversight Panel under the Emergency Economic Stabilization Act [see COP report, "Questions About the $700 Billion Emergency Economic Stabilization Funds" - selise]

Live streaming expected at CSPAN (direct real player links: CSPAN, CSPAN-2, CSPAN-3, CSPAN Radio) and the committee website. For later viewing see the CSPAN’S video archive.

x-posted at oxdown.

Republicans on Waxman’s House Oversight and Government Reform committee have been complaining about the need to investigate how Fannie Mae and Freddie Mac caused the collapse of the Housing market. Today is the promised hearing. I predict it will come close, if not set a record, for Republican bloviating.

10 am - House Oversight and Government Reform
“The Role of Fannie Mae and Freddie Mac in the Financial Crisis”
The hearing will examine the extent to which the actions and policies of Fannie Mae and Freddie Mac may have contributed to the ongoing crisis.

Witnesses:

• Leland Brendsel, former CEO, Freddie Mac
• Daniel Mudd, former CEO, Fannie Mae
• Franklin Raines, former CEO, Fannie Mae
• Richard Syron, former CEO, Freddie Mac
• Edward Pinto, Real Estate Financial Services Consultant, Chief Credit Officer, Fannie Mae, 1987-1989
• Arnold Kling, Federal Reserve Board of Governors, 1980-1986, Senior Economist at Freddie Mac, 1986-1994
• Charles W. Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University Business School
• Thomas H. Stanton, Fellow of the Center for the Study of American Government, Johns Hopkins University

Live coverage at CSPAN (direct realplayer link) and the committee website. For later viewing, the hearing will be posted in the CSPAN archive.

The weekly hearing list is back.

UPDATE: great links from cbl2:
How mortgage giant Freddie Mac waged a war of influence that co-opted Congress

When the Washington Nationals played their first-ever baseball game in the nation’s capital in April 2005, two congressmen who oversaw mortgage giant Freddie Mac had choice seats — courtesy of the very company they were supposed to be keeping an eye on.

Efforts to tighten government regulation were gaining support on Capitol Hill, and Freddie Mac was fighting back. The baseball tickets for home opener were means of influence.

According to confidential company documents obtained by The Associated Press, Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., spent the evening in hard-to-obtain seats near the Nationals dugout with Freddie Mac executive Hollis McLoughlin and four of Freddie Mac’s in-house lobbyists.

Kanjorski declined comment through a spokeswoman. Ney ultimately served a federal prison term after pleading guilty to trading political favors for a golf trip to Scotland, other gifts and campaign donations in the Jack Abramoff lobbying scandal.

The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time.

Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts

Internal Warnings Sounded on Loans At Fannie, Freddie

Internal Freddie Mac documents show that senior executives at the company were warned years ago that they were offering mortgages that could pose dangers to the firm, hurt borrowers and generate more risky loans throughout the industry.

At Fannie Mae, top executives were told it was necessary to develop "underground" efforts to buy subprime mortgages because of competitive pressures, although there were growing risks and borrowers often didn’t understand the terms of the loans, documents show.

The House Committee on Oversight and Government Reform, which has the documents, is holding a hearing today to discuss Fannie and Freddie’s downfall. The companies were seized by the government three months ago after nearly collapsing in the wake of billions of dollars of losses on mortgages.

x-posted at oxdown