Group Sends Open Letter to Chairman Phil Angelides
Demanding Accountability

Washington, DC – Victims of the Bernard Madoff Ponzi-scheme fraud called on the Financial Crisis Inquiry Commission to take action in order to hold accountable both those who defrauded the public and agencies or regulators who looked the other way during the frauds today during a telephone news press conference. They also demanded a full airing by the Commission of the government’s response since the fraud was revealed 15 months ago.

The press conference was organized by the reform group Accountable America and occurred a few hours before the Commission was scheduled to hold a forum at American University Washington College of Law. Tom Matzzie, Chairman of Accountable America released an open letter to FCIC Chairman Phil Angelides. (See below)

"The Commission has powers of subpoena, hearings, investigation and criminal referral, said Tom Matzzie, Chairman of Accountable America. “So far there has only been one hearing in their eight months. The Commission needs to pick up the pace, get to work. Action and investigation is needed--not academic study."

The effort by Accountable America is part of a larger campaign, begun in September, to call for accountability for the financial crisis. The campaign includes TV advertising, print advertising, phone banks and public events. Accountable America’s most recent ad called for the Commission to subpoena former SEC chair Christopher Cox—subsequent to the advertising Cox was announced as a witness but he has yet to be subpoenaed or appear.

Indirect investor Suzanne Webel, who lost a large percentage of her life savings to the Madoff-Ponzi scheme, said that “we were robbed first by Madoff, then by various government agencies for failing to find the fraud, again by SIPC for compensating some victims but not us, and now (again) by the government by failing to respond to our plight. We want the Financial Crisis Inquiry Commission to get to the bottom of this mess – we want a hearing on our issues and a commitment to compensate ALL victims fairly.” She is an organizer for the Madoff-Ponzi Victims Coalition.

Linda Berger, a direct and indirect investor who found herself victim and lost her entire life savings said, “once invested with Madoff we made a number of financial decisions with the understanding that our investments were as secure as anything else in the markets since Mr. Madoff was given the “thumbs up” from the SEC and also from many leaders of the financial world. However, this turned out not to be such a good investment for us after all. Due to the SEC’s failure to heed numerous warnings, its lack of enforcement of its regulations and now to the Trustee’s bogus method of determining net equity, all of our savings are gone.”

Letter to the FCIC
February 26, 2010

Click here to download Accountable America's letter to the FCIC.

Phil Angelides, Chairman
Hon. Bill Thomas, Vice-Chairman
Financial Crisis Inquiry Commission
1717 Pennsylvania Avenue, NW
Suite 800
Washington, D.C. 20006-4614

Dear Mr. Angelides and Mr. Thomas,

I am writing on the occasion of the Commission’s forum at American University College of Law with concern about the trajectory of your work.

As you know, Congress gave the Commission a very broad mandate and specific powers. Among the most powerful of these are the public hearings with cross-examinations of witnesses under oath and subpoenas.

I reach several conclusions that cause concern. Specifically,

First and foremost, there is no indication that you will hear from the victims of the Madoff frauds, other failed institutions or the broader financial crisis despite a specific congressional mandate to investigate these frauds and the investor protections that failed and continue to fail these victims. Victims should have a full airing of the concerns and an opportunity to respond to the financial leaders and regulators during open hearings. Their personal hardships escalate as response is delayed.

Subpoenas have not been issued for current or former regulators who were either asleep at the switch or complicit in the financial disasters that have wrecked the economy. This includes former S.E.C. Chairman Christopher Cox as well as Federal Reserve Chairman Ben Bernanke and former Chairman Alan Greenspan. Former regulators should be subpoenaed, sworn in and cross-examined.

Today’s forum with input from academic experts has none of the character of investigation that Congress suggested when establishing the Commission. There is value to the expertise of these witnesses but my concern is that a month has been spent preparing for academic study instead of conducting investigations. Public education is not part of your mandate—public investigation is part of your mandate. Use your public events as a tool where cross-examination and investigation provide anti-septic to the rot that continues to besiege our financial system. This in turn compels action so these events never happen again—and hopefully relief is provided in the near term by agencies and Congress.

The schedule and pace of work is too slow. You have been commissioners since July 2009 and this is only the third time you have met in public. Your first hearing with witnesses occurred only a month ago. If there are specific commissioners who are being uncooperative with the scheduling they should be called to account in public—this is not a post for somebody interested in padding their résumé. The Commission should hold more frequent hearings that go in-depth with witnesses.

The announcement of the date, time and place for your meetings occurs with insufficient public notice. Today’s forum was announced only two weeks ago and the time of day was announced only two days ago—giving the public inadequate notice. Further, the meeting location is not easily accessed by public transportation and does not have adequate seating for the public. The Commission should announce a draft schedule of hearings with dates and locations for the rest of the year and ask for public input.

No subpoenas have been issued despite this powerful tool to reach any potential witness, anywhere. There is no reason to leave this tool unused. In the coming weeks we will provide you with a potential witness list prepared by veteran investigators of other frauds. The Commission should use its powers to move the investigations forward. Your report is due in December, the work should occur without delay.

If Congress has provided you insufficient resources, publicly ask for more. When citizen groups called for the establishment of this Commission in the Spring of 2009 the Congress responded within a few weeks—there is no reason to assume they would not respond to your request now especially given the scale and scope of the ongoing crisis.

Finally, you were commissioned by Congress in legislation titled as the, “Fraud Enforcement and Recovery Act of 2009.” The tone of the Commission’s work should lean towards law enforcement and action—not academic research.

An important first step is to schedule hearings around the Madoff affair including victims, regulators past and present and the agencies charged with responding.

The American investor, worker and taxpayer continue to be victimized by the financial crisis. We all essentially live today in the same regulatory environment that existed two years ago and with many of the same people still in positions of authority.

If the Commission fails to meet the mandate of Congress, you are allowing these economic crimes to continue to happen and should be held accountable as well.

Sincerely,

Tom Matzzie
Chairman, Accountable America

Click here to download Accountable America's letter to the FCIC.