Like Watergate, on a shoestring

U.S. household wealth that evaporated during the financial crisis: $15 trillion.

Write-downs at the world's largest banks: $4 trillion.

Stock market value destroyed as measured by the Dow Jones Industrial Average: $2.3 trillion.

The price the nation is paying to understand what caused the whole mess: priceless, right?

Actually, just $8 million.

The Financial Crisis Inquiry Commission, headed by former California state Treasurer Phil Angelides, may have a broad mandate to investigate the causes of the financial collapse of 2008, but it has a small budget and short time frame.

The bipartisan commission and its 50-person staff has to come up with its report by mid-December.

"Not to whine or complain," Mr. Angelides said in a discussion hosted by The Wall Street Journal's editorial board Thursday, "But the Lehman examiner had a $38 million budget and 15 months to complete his report on one company."

Mr. Angelides and Vice Chairman Bill Thomas, a Republican former congressman, weren't exactly beating their chests about uncovering a bombshell.

"I believe we are doing a pretty decent job," Mr. Thomas said. "We are only looking at the tip of the iceberg."

Modeled after the commission that investigated the 9/11 terrorist attacks, the financial commission was set up by Congress with six members appointed by Democrats and four appointed by Republicans. (The 9/11 commission consisted of five Democrats and five Republicans, and had a budget of $15 million.) Mr. Angelides, a Democrat, said the goal is to have unanimous approval of the report by the time it is released. So far, there have been no big squabbles along partisan lines, he said.

Messrs. Angelides and Thomas agreed that, after interviewing about 200 people, the most surprising observation is how little bankers and regulators knew about the long-term consequences of their financial products. "Or they knew what would happen and they failed to act," Mr. Angelides said.

The commission can subpoena regulators and bankers, but hasn't used that power. "We've come close to the edge" in terms of issuing a subpoena, Mr. Thomas said. They also are relying on the increasing number of books that have been written about the crisis or people in the process of writing books.

Next up before the committee on Wednesday and Thursday is a session on subprime lending starring former Citigroup CEO Charles Prince and former Federal Reserve Chairman Alan Greenspan

When asked whether the commission would be digging into Fannie Mae and Freddie Mac's role into the subprime-lending calamity, Mr. Angelides said, "We are going to scrub them hard."

Will Goldman Sachs Group, whose CEO Mr. Angelides likened to a used-car salesman at the commission's first hearing in January, be making another appearance? On this, Mr. Angelides kept us in suspense.

By MICHAEL CORKERY

* DEAL JOURNAL
* APRIL 1, 2010, 8:31 P.M. ET

Breaking Insight From WSJ.com
Like Watergate, On a Shoestring
Panel Will Try to Explain Global Financial Crisis On an $8 Million Budget