By Tom Infield
Inquirer Staff Writer
December 23, 2008
U.S. Rep. Paul Kanjorski says the
Madoff scandal is a case study in why the U.S. financial system - from
equities to bonds to insurance - needs to be reregulated.
The Northeastern Pennsylvania
Democrat, who survived an election battle last month that threatened to end his
24-year career in Congress, now finds himself closely involved in the biggest
story in America.
As chairman of the House Financial
Services subcommittee on capital markets, Kanjorski will hold a series of
hearings starting in the new year on how federal regulators missed the $50
billion Ponzi scheme put together over years by the financier Bernard Madoff.
He said the hearings would lead to
recommendations on ways to change the financial system that he hopes will be
voted into law in 2010.
"How did this happen?" he
asked yesterday from his office in Wilkes-Barre.
"Nobody saw it, and nobody took action."
"We are going to be testing all
of the regulations of the last 75 to 80 years," he said. "We were
going to do this before the Madoff thing occurred. But Madoff now gives us a
great case study."
Kanjorski said a day of hearings
would be scheduled early next month featuring testimony from officials of the
Securities and Exchange Commission and university economists.
After that, hearings will be held
periodically. No dates have been announced.
He said it was unlikely that Madoff
would be called, "at least not initially." He said he did not want to
interfere with the government's criminal case against Madoff.
But he said that some of the bankers
who placed hundreds of millions of dollars with Madoff without adequately
tracking how he was investing them may be called to testify.
The subcommittee, which has three
staff members, does not intend to do a fact-finding investigation behind the
scenes, he said.
"I don't think there is going
to be a big dispute here about the facts," he said. "The question is,
why didn't somebody act to take some sort of corrective action?"
|