Obama “Looks Forward” on Financial Fraud, Too

Obama just issued a signing statement to the bill establishing the "Pecora Commission," mandated to investigate the financial meltdown. The statement seems to signal a desire to "look forward" on financial fraud, in the same way he continues to try to "look forward" on torture an other abuses of power.

The complete statement reads,

Today I have signed into law S. 386, the "Fraud Enforcement and Recovery Act of 2009." This Act provides Federal investigators and prosecutors with significant new criminal and civil tools to assist in holding accountable those who have committed financial fraud. These legislative enhancements will help the Department of Justice to combat mortgage fraud, securities and commodities fraud, and related offenses, and to protect taxpayer money that has been expended on recent economic stimulus and rescue packages. With the tools that the Act provides, the Department of Justice and others will be better equipped to address the challenges that face the Nation in difficult economic times and to do their part to help the Nation respond to this challenge.

Section 5(d) of the Act requires every department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States to furnish to the Financial Crisis Inquiry Commission, a legislative entity, any information related to any Commission inquiry. As my Administration communicated to the Congress during the legislative process, the executive branch will construe this subsection of the bill not to abrogate any constitutional privilege.

Which affects the following section, laying out the Commission’s investigative power. 

(d) Powers of the Commission-

(1) HEARINGS AND EVIDENCE- The Commission may, for purposes of carrying out this section–

(A) hold hearings, sit and act at times and places, take testimony, receive evidence, and administer oaths; and

(B) require, by subpoena or otherwise, the attendance and testimony of witnesses and the production of books, records, correspondence, memoranda, papers, and documents.


(A) SERVICE- Subpoenas issued under paragraph (1)(B) may be served by any person designated by the Commission.


(i) IN GENERAL- In the case of contumacy or failure to obey a subpoena issued under paragraph (1)(B), the United States district court for the judicial district in which the subpoenaed person resides, is served, or may be found, or where the subpoena is returnable, may issue an order requiring such person to appear at any designated place to testify or to produce documentary or other evidence. Any failure to obey the order of the court may be punished by the court as a contempt of that court.

(ii) ADDITIONAL ENFORCEMENT- Sections 102 through 104 of the Revised Statutes of the United States (2 U.S.C. 192 through 194) shall apply in the case of any failure of any witness to comply with any subpoena or to testify when summoned under the authority of this section.

(3)iii) ISSUANCE- A subpoena may be issued under this subsection only–

(I) by the agreement of the Chairperson and the Vice Chairperson; or

(II) by the affirmative vote of a majority of the Commission, a majority being present.

(3) CONTRACTING- The Commission may enter into contracts to enable the Commission to discharge its duties under this section.


(A) IN GENERAL- The Commission may secure directly from any department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States any information related to any inquiry of the Commission conducted under this section, including information of a confidential nature (which the Commission shall maintain in a secure manner). Each such department, agency, bureau, board, commission, office, independent establishment, or instrumentality shall furnish such information directly to the Commission upon request.

(B) OTHER ENTITIES- It is the sense of the Congress that the Commission should seek testimony or information from principals and other representatives of government agencies and private entities that were significant participants in the United States and global financial and housing markets during the time period examined by the Commission.

I find the signing statement troubling for a number of reasons. First, Obama’s celebration of investigative tools to combat fraud going forward seems like the same old "look forward" language with which Obama has thus far prevented any inquiry into Bush-era torture and other abuses. Investigative tools are nice, but we need to know what the beast we’re investigating really looks like, which is what the Pecora Commission should tell us.

Also, I just spent several days wading through the 9/11 Commission archives. Having recently been reminded of Bush’s stonewalling of that Commission, on which this Pecora Commission is based (though this Commission will have more members from Obama’s party), I really don’t relish the thought that Obama may soon be stonewalling in similar fashion.

More specifically, though, I’m concerned about what this says about Obama’s approach to executive privilege. The privilege has, traditionally, arisen out of a real concern to protect precisely the subject of the 9/11 Commission–national security information. Bush was, of course, stonewalling the 9/11 Commission to protect himself from embarrassment, but at least any executive privilege there arose out of the traditional purpose for executive privilege.

But this Pecora Commission is mandated with investigating a financial failure, not a national security one.  Yet Obama’s signing statement suggests he may invoke privilege to hide details of that failure. 

Now, there is one use of the privilege that does apply here–deliberative privilege, in which the President can shield conversations with top advisors to protect the President’s ability to get unvarnished advice (it’s a use of executive privilege that I find rather bogus, but it there is precedent for it). So perhaps Obama plans to invoke executive privilege to shield conversations he had with the Masters of the Universe surrounding him about why they shouldn’t nationalize Bank of America, for example, instead of throwing away money on a bailout that may be far less effective. But that’s precisely the kind of conversation this Pecora Commission needs to be able to investigate, if we’re going to avoid similar meltdowns in the future. 

It’s not a good sign, frankly. The meltdown and the bailout have been largely managed through the executive branch behind closed doors (or, barring that, behind the opacity of the Fed). If Obama plans to shield events that happened behind those closed doors, we may never find out the causes for the economic meltdown. 

26 replies
  1. phred says:

    Obama looks forward only in terms of legal liability. The rest of the time he looks backward at all of the power accrued in the Unitary Executive and thinks to himself, “hmm, how can I get me more of that?”. It is infuriating that all this Presidential power protection that he and Craig obsess over is not a part of the President’s oath of office. Evidently those were just pro-forma words for him and Roberts to chuckle over.

  2. Waccamaw says:

    I can guaran-damn-tee ya that when some of the bush-like activities Obama is starting to pull blow up in his face, there ain’t gonna be nothin’ coming out of the reich wing and the so-called MSM 24/7 *except* “looking back”…..and if he and his people are too dumb to realize *that*, they forkin’ well deserve every bit of it.

    And there’s likely to be very few progressives/moderates/indies who will work/vote to get him re-elected.

  3. Rayne says:

    So disappointing to see this. We’re going to have to have a showdown about presidential signing statements. Their use has become too frequent, uncontested too often, in spite of their use to create or void law.

  4. Peterr says:

    Marcy, I’m with you on the troubling aspect of the signing statement’s continuing support for expansive executive privilege, but where do you get the “going forward” stuff?

    The statements says in part “to assist in holding accountable those who have committed financial fraud.” The use of the past tense makes this sound backward-looking to me.

    The use of “fraud” however, I find troublingly limiting. Would “willful neglect” or “professional negligence” by executive branch employees — of either the Bush or Obama administrations – be reviewable here? If the commission is to be able to recommend changes to the executive branch oversight of the financial system, it needs to be able to look at more than just what was done that was illegal, but also what was just plain screwy.

    • emptywheel says:

      Because the bulk of the law is about definiting crimes and interpretations of crimes relating to financial fraud. So you’re not going to be able to use much of it to investigate stuff that happened in the past.

      Though there is more money for investigation.

  5. TheraP says:

    O/T – heads-up:

    I’m pursuing what I think is a useful line of inquiry (theory) which connects Abu Zubaida’s initial head injury in 92, the genesis of his diaries around that time, and the seizures which he currently suffers from. There is a condition called “hypergraphia” (the compulsion to write). It is often connected to a preoccupation with religious or moral issues. It is also connected to temporal lobe epilepsy – and Abu Zubaida’s loss of the ability to speak, following his head injury, and the need to relearn speech, indicates that his head injury affected the temporal lobe (the area of our brain connected to speech). All of this suggests to me that he likely has hypergraphia. Individuals with this disorder are more likely to show emotional illness as well.

    Thus, it is possible that a psychologist drew all sorts of conclusions about a man who was brain injured, wrote due to a condition related to his brain injury, and whose very reason for being connected with “jihad” may have also been powerfully motivated by his brain injury and fixation on religion, a moral compulsion perhaps to aid his Muslim brethren, following an invasion of a Muslim country. (In effect, they may have “experimented” on a brain injured man on the basis of journals written due to a brain disorder!)

    All of these hypotheses are drawn from the document submitted by his lawyer, which EW provided on another thread yesterday and which I read and commented on extensively last night.

    I’m going to write this up and post it at Oxdown. I believe it could have a powerful effect for his defense as well as his “rights” as a disabled person. Certainly he deserves adequate diagnosis and treatment. And the deprivation he experiences, from his journals being taken away from him, some of which have subsequently been “lost” is described by him as the worst torture he has gone through at American hands.

    In my view this man deserves adequate diagnosis, treatment, plenty of writing material and access to his own writings. To deprive him of them, imvho, and IANAL, is a crime!

    “A number of prolific writer may have had temporal lobe epilepsy, including Byron, Dante, Dostoevsky, Moliere, Petrarch, Poe, and Tennyson.”

    I’m leaving this here, so that if anyone tries to “scoop” it, there’s a trail leading right where it belongs!

    • DWBartoo says:


      Like a number of others, here at the wheelhouse, you are becoming a national treasure, right before our eyes.


      The work you are doing, the evidence you are preserving in accessible form, and the underlying philosophy of psychological responsibility which you are articulating, will be appreciated and made use of by generations of psychologists.

      I say these things, hoping you will be neither embarrassed nor made self-conscious, but because such behavior is so profoundly uncommon, these days, both within your profession and in our society in general.

      It is a true pleasure and an astounding privilege to witness the consummate professionalism displayed by so many on these threads, knowing that, if this nation is to regain its soul and its sanity, it will be, in large part, through the diligent and sustained efforts of yourself, your colleagues and those many whom all of you, here, inspire.

      Thank you.

  6. der1 says:

    The too close ties to Goldman and Wall Street make this a big stink for me. This bothers me: The Federal Reserve Can Not Account for $9 Trillion in Off-Balance Sheet Transactions?

    If that’s a bigger scam being pulled to help The Masters and Our Betters save their own wealth and the Administration (Larry & Timmy) know it and abet it then there’s good enough reason to want to hide it.

    Obama’s bet seems to be it’ll work out before 2012 and we’ll all forgive and forget, I doubt that it will and what worries me about that is the impatient voters decide to change teams and bring the morons back to the WH.

  7. Leen says:

    EW “So perhaps Obama plans to invoke executive privilege to shield conversations he had with the Masters of the Universe surrounding him about why they shouldn’t nationalize Bank of America, for example, instead of throwing away money on a bailout that may be far less effective.”

    I have noticed that Obama and many of the other Dems are saying “move forward, turn the page, next chapter, move on” far less than they were. Although this signing statement and Obama’s other decisions to go along with the previous administrations decisions is troubling.

    He needs to (or needs to have his people) get out on the streets more. There are millions who want to witness the Bush administration held accountable for far more serious crimes than lying under oath about a blow job. Millions know that there is no way to move forward without it. He must realize that the reason he is in that seat is that his campaign ran on “change” and transparency. There is buckets of unnecessary blood running in the streets in the U.S. Iraq and other spots in the middle east. No way to move forward without truly holding those responsible accountable

    Could he end up being a one term Pres?

    I had always thought that if McCain had picked up Senator Kay Bailey Hutchinson that the Presidential race would have been much much closer. Now Senator Hutchison is running for Governor of Texas. Does anyone else think that this could be a move towards her running in 2012? I do.

    What do British attorney Phillipe Sands and retired Colonel Wilkerson have in common? They both think Former V.P. Cheney is a war criminal. They also have asked why does the MSM give Cheney so much air time.


      • Leen says:

        As Chris Matthews keeps pointing out “why is the man behind the curtain for eight years” everywhere on the MSM. This is man who could give a rats ass what the public thought before and now he is spittin his poison all over us again. ENOUGH.

        As Matthews also said about Cheney ” not satisfied to take his 19% approval rating and go home”. Back to his underground bunker

    • freepatriot says:

      Could he end up being a one term Pres?

      one term president, long term prisoner

      people got expectations, about their government

      and they don’t really give a fuck what Barack Obama thinks if he isn’t willing to meet those expectations

      he volunteered for the job

      if he didn’t want to do it, he should have shut his fucking pie hole

      upholding the law ain’t something we see as “Negotiable”

      and I could get REALLY UGLY if barack obama wants to suggest that there are some laws we can overlook

      don’t make me go there, dude

      • DWBartoo says:

        Obama is working very, very hard to be the last of the traditional American ‘top dog’ politicians.

        I’ve no doubt freep, that you and a number of others who meet here (myself included) have no illusions as to what may yet be required…

        As to whether the broader public is, as yet, sufficiently ‘aware’ or ‘conscious’ or ‘prepared’ for what we, as a society are facing, I am far less sanguine.

        Education has suffered greatly, as a means of understanding and empowerment, these last forty-odd years, and we may only imagine that the ‘pragmatic’ will further limit its essential functions, reducing it further to simply another manipulative ‘tool’. Such ‘education’ as will impact genuine understanding will occur in the streets …

        But, we are a nation of people who have, deliberately and intentionally, been reduced by enforced doubt and orchestrated fear to such a degree that mere physical ‘comfort’ and mental dullness are seen by many as their ‘best’ option.

        The Strassian waltzers are still calling the tune, and the public lacks the ‘perspective’ to understand the implications which attend this particular ‘dance’, believing that it confirms the myths (that the public regards as ‘principles’) which sustain them, as members of the most powerful, most decent and most generous nation which has ever graced this planet. A nation which can do no wrong. As long as they have the ‘freedom’ to choose between several hundred ‘programs’ on their flickering television screens they will continue to ‘believe’ that there really are two political parties, with substantive ‘differences’ between them, that politicians really do ‘feel’ their pain, that God is in heaven (and speaking, daily, on a cell phone, perhaps, with whomever is in the White House), and that there is nothing to worry about. If they, personally, are going through hard times, then they accept the notion that it is only their own fault, and that they must apply themselves more seriously (the Puritan ‘ethic’ still lives), as it would never dawn upon them to compare notes with their neighbors, although that might be changing as more and more of those “too small to matter” are driven to extremes. This nation has been sleep-walking for a long time and it is difficult to wake up and understand what has happened.

        None of the massive failures we are witnessing have just ‘happened’, as you and I well understand, but the vast majority of our fellow citizens have yet to realize the implications, and the demagogues still hold sway … and the media, those who would ’shape’ perceived ‘reality’, well, you know what they are worth in this struggle.


        Long live Firedoglake! and other critical sites where conscience convenes and responsibility reigns.

        End of rant.

        Thanks, freep, for providing the ‘opportunity’ of such venting (I wonder why volcanoes come to mind?).


  8. Phoenix Woman says:

    Do remember that Darrell the Car Thief Issa is the guiding force behind this commission. You remember him — he’s the guy who spent $5 million of his own money on the campaign to recall Gray Davis so he, Issa, could become governor, only to be forced by the national party to step aside in favor of Schwarzenegger.

    If Issa’s involved in something, chances are it becomes a classic GOP fishing expedition in the manner of Whitewater.

  9. BillE says:

    When the TARP was first proposed back in October/September timeframe Obama totally embraced it and essentially owned it back then. I didn’t like it at the time and combined with the current cast of characters involved with Goldman-Sachs and permeating his administration I don’t like it now. This is getting to the point where I am wondering about Obama’s motives. Is it cya? Or something more insidious. Like is he part of the problem?

    One interesting trend I have noticed is the number of “centrist” republicans that are “joining” the democratic party. I would tend to beleive that Obama feels kinship to them more than to the DFH crowd on the left. In not quite a sister souldjah moment but similar the centrist/blue dog wing would certainly like to turn us into what remains of the “moderate” republicans.

  10. freepatriot says:

    if Obama wants to keep “Looking Forward” LOOK FORWARD to sitting next to dick and george at the Defendant’s table

    he didn’t take an oath to look forward

    and the laws against war crimes are VERY CLEAR


    I didn’t speak to a SINGLE voter who wanted to “look Forward”

    people are pissed

    and if Obama thinks the teabaggers are representative of that anger, he’s DEAD FUCKING WRONG ON THAT ONE

    the people I’m talking about are not inclined to protest in the street

    they protest in the ballot box

    I been nurturing a precinct for about 10 years. I don’t push any particular idea or view except for supporting their right to vote. And they do

    I have always ask the kids “So when do you get to vote”. Now they’re starting to show up

    there is a kind of “family reunion” atmosphere on election day, with parents checking on children, siblings checking on each other, stuff like that

    Obama has NO CLUE about the conversations these people are having

    they are decent, honest, hard working Americans

    and they EXPECT the law to be enforced

    they don’t “want” it. They don’t “hope for it”

    they expect it to be done, as a matter of routine business


    and every one of them would stand behind me as I said JUST that to Barack Obama’s face

    and I don’t think the people in my precinct are all that much different than Americans anywhere

    so maybe Obama better rethink this whole “looking forward” idea

  11. radiofreewill says:

    I’m going to dissent against the prevailing sentiment that Obama is selling US out, and suggest instead that he’s playing this pretty well, imvho.

    If We want to remain a viable Country, We have to restore Trust in the Financial System and Honor in Our Military. We have to re-establish that they are being honestly run and regulated. This has to be Obama’s first priority, and ‘looking forward’ is an appropriate approach to take for re-orienting Our efforts, imvho.

    That doesn’t mean, however, that Obama isn’t interested in seeing Justice done to those Whose Ideological Conspiracy almost destroyed Our Country.

    Far from it. I see him making Power Moves to ‘encompass’ all of Bush’s UE Claims – that way Everything Bush used – UE Tool-wise – to Let the Genie of Tyranny out of the Bottle of Constitutional Checks and Balances – Obama has available to him to Put the Genie Back in the Bottle, and thereby restore Propriety and Constitional Order to Our Governmental Affairs.

    So, I don’t see Obama’s ‘looking forward’ as giving BushCo the cover to make a Getaway, but rather keeping US going while BushCo gets rounded-up. The Genie that got loose is a Collection of Ideological Extremists who Colluded in Secret to Undermine the Rule of Law and Deprive the Nation of Honest Services, in order to Dishonestly advance their own Ideological/Political Agenda.

    Those few are the Head of the Snake, which – if crushed – will End the Threat. However, those few – after successfully crawling into the highest offices in the Land – Colluded in Secret, Used Deception and Acted in Bad Faith – Operating All Along with an Intentional Exit Strategy to Leave No Incriminating Evidence Behind.

    Normal ‘process’ isn’t going to ‘catch’ them – they’re going to have to be ‘taken down’ as part, imvho, of a RICO and/or Counter-Espionage Operation – that they don’t see coming.

    But, still, as the days go along, We have to maintain a viable Financial Sector and a Credible Military – We can’t just let everything come to a halt because Bush and Cheney – the Torturers – haven’t been brought to Justice, yet. Hence, Obama’s ‘looking forward’ – because, We really don’t have any choice – We have to.

    So, who really thinks – with all that has come out – that the Torture 13 will make a Getaway with their Crimes Against Humanity? No way. Those guys, and Condi, are going down – it’s just a question of time before Obama and Law Enforcement pull the Cloak of Bush’s UE Secrecy back to reveal the Cowering Rat Bastards for all to see.

    Will there be a Bankster 13, too? I think so, and Bush will be the common link, imvho. There might also be a PNAC 13, and a Gooper 13, etc, etc.

    But, the Banksters, and those other Colluders, they won’t get away with it, either. Hellhounds like US in the Blogosphere are hot on their trail – and We’re going to get those slimy cheats and Make Them Pay, too.

    However, until then, We can only keep ‘looking forward,’ if We want to Save the Country while We heal it from Bush’s near-Mortal Wound to US.

    • DWBartoo says:

      Obama the multi-dimensional Chess Master?

      I think what we are seeing; no single payer, no consequence for malfeasance or treason, no accounting for the monetary ‘fast and loosers’, the promotion of military ‘types’ like McCrystal, and the paucity of genuine help for the struggling ‘masses’ etc. is, precisely, what we are going to ‘get’ from the presidency of Barak Obama.

      But I do appreciate your optimism and enthusiasm, as we shall certainly have need of it if my concerns are realized, and Obama behaves as the ‘last’ of our typical American politicians.

      Should you be proven correct in your anticipations, I shall endeavor to rise to the occasion (after performing suitable mea culpas, for my lack of sufficient hope and appreciation of … change) and work diligently to re-elect the ‘first’ of a new ‘kind’ of ‘leader’, one who understands, to the very core of his being, that power is not to be collected, but rather, dispersed.

      For our species to survive, to possibly even thrive, there must be fundamental, substantive AND genuine change, not some slick, pr/driven cleverness and cynical manipulation of the desperate (and diminishing) hope of something ‘better’.

      And yes, we are a profoundly wounded nation.

      From these wounds, we will either emerge as a stronger, more humane society, or we will become even more ‘damaged’ and a growing threat to everyone else through being un-reasonable and ir-rational. Simply empowering the greedy and extolling the virtues of military conquest, will guarantee the latter. The times and humanity itself, require more than any (cynical) ‘empowering’ and ‘extolling’ of existing ‘institutions’. Much more …

  12. readerOfTeaLeaves says:

    Sorry, but I’m missing that section where BO can rope off areas not under investigation. Can someone please highlight it?

    If Geithner didn’t have a ‘come to Jesus’ moment when he started looking through the books on Wall Street back in Sept, and according to the Frontline “Inside the Meltdown” narrative almost instantly called for backup, then we’d all best give him up as hopeless.

    However, if I stumbled on a crime, wouldn’t I try to keep a poker face while I called for backup? Wouldn’t I realize this is international? Wouldn’t I start lobbying for a lot more law enforcement resources and money? While all the time keeping a poker face?

    Although the phrasing of freep’s comments are more… ‘forceful’ than I might use, I have the same sense that the people I’ve heard expect some of the criminal activity to be exposed, and money recaptured through the legal system.

    The problem that I see is that so many people probably were in on it: mortgage brokers, bankers, Wall Streeters — many of whom were greedy and didn’t stop to ask themselves where all that ’sudden manna from heaven’ was actually originating and whether it might catch up with them someday. There’s probably a whole lot of ’stupid’, and there’s clearly plenty of brazenly criminal. And probably a lot of overlap.

    But judging from the amounts of pension money, funds, and investments that evaporated in a very short period of time, I don’t see the people that I hear (who voted for Obama) having any patience with a ‘government’ that doesn’t root out this mess and clean it up.

    We’ve had a culture of delusion; that just isn’t going to cut it going forward.

  13. timbo says:

    It really does feel like the Missouri Compromise is in full swing in the Senate, doesn’t it? Basically, the political bosses are afraid of rocking the boat too much…because their boat seems to be shrinking. It’s name? “US Constitution”…

  14. XC827runner says:

    I thought you might be interested in this letter written by Army Corps of Engineers whistleblower Bunny Greenhouse, who was retaliated against after she testified to Congress last week. Ms. Greenhouse is calling on all Americans to support whistleblower protection for federal employees. To read her letter go to http://capwiz.com/whistleblowe…..d=13371836

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