‘It’s a financial Groundhog Day’

Phil Angelides is a pretty savvy guy. He was a real-estate developer in Sacramento for many years, the state treasurer of California and the 2006 Democratic nominee for governor. So it makes sense Congress would tap someone with his experience to serve as chairman of the Financial Crisis Inquiry Commission—a bipartisan committee formed in July 2009 to help shine a light on the U.S. mortgage markets and financial institutions meltdown.

But Angelides says that despite all that background, he’s still been taken aback by things he’s heard during the FCIC’s investigation. “I was surprised by the extent to which Wall Street had gone from being a place that provided capital to build businesses to being a casino,” he said.

The commission will hold the last of its hearings in Sacramento on Thursday—it’s already visited Bakersfield, Las Vegas and Miami. Sacramento is another of the regions worst hit by the mortgage-market collapse.

“We want to look at the mortage market here in Sacramento, look at predatory lending and whether there was fraud,” Angelides told SN&R. “We want to explore and expose how these [bad] loans were made in communities like Sacramento and then packaged up and sold around the world.”

Angelides says it was a “gross failure of leadership” that led to the present situation. “Back in Washington, everyone says, ‘We didn’t see it coming.’ But on the ground in communities like Sacramento, people did see it coming.”

Over the last year, the commission has interviewed 700 witnesses and reviewed millions of pages of documents. During the hearings, Angelides has expressed frustration with the “financial Groundhog Day” that the country finds itself in. “We vow to wake up and change course, and then we repeat what we’ve done before.”

The FCIC—borrowing a page from the 9/11 Commission—will release their findings in a book (Little, Brown and Company is publishing it) on December 15. An electronic version of the report will follow.

And there’s a good chance that cycle will repeat itself, Angelides says, because though Main Street is reeling, Wall Street is enjoying record profits. As for the bankers and speculators who brought the economy low, Angelides says none of them equate their “recklessness” to what happened to the country. “Normally, you learn from your mistakes and the consequences of those mistakes. Wall Street has been spared that difficult journey.”