Senators McCain and Dorgan Call for Select Committee to Investigate Financial Crisis

Senators John McCain (R-AZ) and Byron Dorgan (D-ND) yesterday introduced legislation that would establish a Senate select committee to investigate the causes of the financial crisis and to make recommendations to ensure that a similar crisis never occurs again. The senators outlined their vision for a bipartisan, independent committee with subpoena power in a press conference. Dorgan complimented the standing committees for their work on the financial crisis, but said they are “overworked and overwhelmed.” A select committee would be able to focus full time to determine how the crisis happened, he said.

McCain emphasized the importance of understanding the causes of the crisis in order to implement comprehensive systemic and institutional reforms. In their joint press release, the senators pointed to a number of select committees that have worked in the past to investigate specific subjects. The two also noted their investigation of the Abramoff lobbying scandal as an example of the work they have done together.

In an earlier news release, Dorgan explained why he voted against the $700 billion fund which the Treasury Secretary said was needed to prevent an economic collapse. He said he could not support a plan “to shovel taxpayer dollars to the same Wall Street firms that steered our economy into the ditch” without including measures to stop the behavior that caused the meltdown. He called for new oversight of hedge funds and derivatives, and effective regulation of the largest financial institutions.

Dorgan also voted against the repeal of the Glass-Steagall Act in 1999, one of only eight senators to do so. He said the protections of the Act must be restored. Dorgan proposed a prohibition on the payment of big bonuses in the firms that receive federal bailout money and conditions on money that is used for the bailout to protect taxpayers. He also called for restrictions on mergers by big banks. It makes no sense to permit the creation of more banks that are deemed “too big to fail,” he said. Dorgan also supports the investigation and prosecution of criminal behavior in connection with the financial crisis.