Will the Angelides Commission = the Pecora Commission?

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With the appointment today of the 10 members of a congressional commission to investigate the financial meltdown, many people are hoping that the spirit of Ferdinand Pecora once again walks among us.

Pecora was the general counsel of the Senate Banking Committee who in 1933 and 1934 investigated, in spectacular fashion, the Wall Street hijinks that preceded the 1929 stock market crash. Sicilian-born, the hard-boiled Pecora showed not an ounce of deference to his quarries, who included J. Pierpont Morgan Jr. and the heads of such other august Wall Street families of the era as the Whitneys, Rockefellers and Lamonts.

Can the new Financial Crisis Inquiry Commission, which will be headed by former California Treasurer (and 2006 gubernatorial candidate) Phil Angelides, measure up?

Here’s the credit side of the ledger: The bipartisan panel (six Democratic appointees, four Republicans) has the explicit backing of the Democratic-controlled Congress and the White House. Among its members is a former financial regulator, Brooksley Born, ex-chair of the Commodity Futures Trading Commission, who tried unsuccessfully to tighten the regulation of the Wild West of derivatives trading in the 1990s.

And there’s plenty to investigate. The roots of the economic and financial crisis can be found in the commercial banking, investment banking, mortgage trading, credit and derivatives industries. (Have I left anything out?) The behavior of Wall Street investment houses, which played both sides of many trades, enriching insiders while impoverishing retail investors and other outsiders, resembles the abuses Pecora identified in his hearings and his 1939 book ‘Wall Street Under Oath.’

Yet there’s room for pessimism. Several members have been inside the investment industry, including Angelides and Heather Murren, another Democratic pick. The ideological gulf on the panel is wide, from Angelides and former Sen. Bob Graham (D-Fla.) on the left to Douglas Holtz-Eakin, former economic advisor to GOP presidential candidate John McCain, and Peter Wallison, an executive of the conservative American Enterprise Institute, on the right. The risk is that the commission will either fragment along ideological lines or, in an effort to craft findings that garner unanimous approval, it will muffle its guns.

Pecora had more leeway. He was a lifelong renegade, an anti-Tammany Democrat who had supported Republican Teddy Roosevelt’s breakaway Bull Moose presidential candidacy in 1912. Ron Chernow described him in his book ‘House of Morgan’ as ‘fearless and incorruptible,’ and noted that he had turned away numerous job offers from Wall Street. Pecora was determined to hang some pelts on his wall. Among those he bagged was Charles Mitchell, chairman of National City Bank of New York (ancestor of today’s Citigroup), who was forced to resign after Pecora (and others) laid bare his financial manipulations.

Two key questions: Will Angelides and the rest of the panel hire investigators smart enough to ferret out the modern-day Mitchells? And will the panel be willing to preside over a Pecora-style bloodletting?

-- Michael Hiltzik