A Fighting Chance (16 page)

YouTube and an interactive website didn’t sound much like a Congressional Oversight Panel, or at least that wasn’t how most people thought a panel ought to operate in 2008. But we figured that if our goal was to be a watchdog for the American people, then we should involve the American people as much as possible.

Once we set up the website, e-mails started pouring in. We heard from people who had lost their homes, people who were desperate for financial help, people who were frustrated about what was happening to our country. I was a little surprised by the outpouring—after all, we started out as a pretty obscure government panel. But this crisis was personal. People felt like their whole world was unraveling. Maybe our report gave them a voice. Maybe it asked some of the same questions they would have asked if they had the chance.

I had hoped our report wouldn’t get caught up in any kind of political crosswind, but that’s not how it worked out. In the two weeks our panel had to write the report, we circulated drafts, had conference calls, swapped e-mails, and agreed to compromises—all in the hope that we could deliver a unanimous report. But it wasn’t to be. Congressman Hensarling voted against it.

So our first report was signed by all three Democratic appointees, with no Republican support.

I started to understand that oversight was going to be hard, every step of the way.

Shirts and Skins

On December 10, the day the first COP report came out, I had an appointment with our dissenter, Congressman Hensarling. I figured he had invited me to his office on Capitol Hill to discuss what he thought COP should be doing differently.

Early that morning, I got lost—again—this time in the basement of the Capitol. Michael Negron, another of my former students, was with me. He had been a navy officer before law school, and he was a lot less likely to get rattled by a little thing like getting lost.

The congressional office buildings are linked by big underground tunnels and small shuttle trains that curve in odd directions, and the offices are numbered in ways that make no sense to me. We turned one way and then another, and finally Michael announced that we were almost there. Go, Navy!

Hensarling’s office was already open for business, and the congressman came out quickly to greet us. Handshakes all around, and Michael and I joined Hensarling and one of his staffers in his private office. I perched on the edge of a sofa, with my coat across my lap.

After Hensarling’s dissent on the first report, I hoped I could find out what he wanted to do differently. Maybe he had strong views about what we should investigate. Maybe he had an idea for how we could monitor where the TARP money went. Maybe he wanted to put more pressure on Treasury to show progress in slowing foreclosures. Maybe he wanted to talk about the second, staggering bailout for Citibank—and Treasury’s willingness to lie to us. The list of issues our panel might work on was growing by the day, and I didn’t know what priorities the congressman wanted to address.

After giving me a big smile, Hensarling dived right in. He said something along the lines of “I want to know your plans for dividing up the budget.”

Dividing our budget?

The congressman explained that he wanted to know what portion of COP funding I planned to allocate to the Republicans and what portion I planned to keep for the Democrats.

I reminded him that we were all working on the same investigations and the same reports. Congress hadn’t specified the exact budget, but they were willing to give us the funds we needed to get the work done—and that’s what we’d do. I told him that I felt strongly about one thing: There’s no money for one side versus the other. This shouldn’t be a my-party-your-party exercise. We should work together with one nonpartisan staff.

The congressman took a few more passes at his point. Sure, he understood that we were working together, and that was all very nice. But I obviously didn’t know the ways of Washington. He chuckled and smiled, but he kept coming back to the same point: What part of the budget would the Democrats get to control and what part would go to the Republicans?

After a few more rounds, his tone got hard. “Look,” he said, “the game is shirts-and-skins.” A vivid image immediately shot into my brain: boys with sharp elbows playing pickup basketball, everyone hogging the ball, one team in shirts and the other bare-skinned. (No girls on either team, of course.)

Hensarling’s point was obvious: he wanted to make sure his team got its share.

I guess I shouldn’t have been surprised. The
very first
question the congressman had asked back in our
very first
phone meeting two weeks earlier had been about dividing up the staff. I’d never thought about such an idea, and on that first call I was unprepared for the question. But now we had just spent two weeks bashing our brains out to write an oversight report to pin Treasury down. We still had no office space, no phones, and no coffeepot. We certainly had no clear plan for overseeing the biggest bailout in the history of the United States. There were a million things we needed to figure out—and the congressman thought the most important thing we needed to do was slice up the operating budget so each political party was assured its “fair share”? Welcome to Washington.

Once I had gotten over my shock after that first call with Hensarling, I’d had a chance to think about this issue. The way I saw it, we were a short-term committee trying to operate in the middle of an earthshaking crisis. The bill authorizing TARP and the oversight panel had been bipartisan. And the problems our country faced would definitely require bipartisan solutions. I thought Hensarling’s plan—he wanted the Democrats and Republicans to have separate staffs and separate priorities—would mean that the panel members would spend too much of their time sniping at each other and not enough time overseeing the biggest bailout in the history of the country.

Besides, the government had already proven that a nonpartisan approach could work. The 9/11 Commission, for instance, had conducted an in-depth investigation and written a clear, powerful report—all of it done with one staff and one budget. I thought that was the right approach: COP should avoid partisan divisions all the way.

So I drew a line in the sand right there in the congressman’s office: The staff would be nonpartisan and would work for all of us. The panel would have one budget, not two. Period. If Hensarling wanted to go to war over this issue, so be it. As he said, I didn’t understand the ways of Washington. The part
he
didn’t seem to understand yet was that I didn’t really care about the ways of Washington.

Later that day, the House held a hearing on TARP, and Congressman Hensarling testified. He used the occasion to explain his vote against the report. He said that he was not yet assured “that every panel member has the resources and rights necessary to conduct effective oversight.” Until that happened, Hensarling said, he could “not in good conscience approve any reports.” It didn’t matter what we would write in our reports, he announced he would be voting no.

I guess I wasn’t the only one to draw a line in the sand that day.

There was a lot of jockeying, but in the end we stuck with the nonpartisan approach. We hired an executive director who had worked for Democrats and a deputy director who had worked for Republicans. For the rest of the staff, we did our best to hire first-rate people to do a first-rate job, without regard to party affiliation. We asked all the panelists for recommendations for who should be hired and what we should work on. And I did my best to pull everyone together—panelists and staff—as one team.

Even so, I worried about the lesson from the shirts-and-skins lecture. No matter the crisis, no matter the urgency of the moment, in Washington it was always “my team vs. your team.” And in all that pushing and pulling, too many times the people we were supposed to serve got left behind.

COP on the Road

With our first report out the door, it was time to hold our first hearing. We thought Clark County, Nevada—the epicenter of the foreclosure crisis—was a good place to start. So we scheduled a hearing for December 16, about a week after COP’s first report came out.

Las Vegas had been a boomtown, and now the bust had exploded with a vengeance. This was nothing like the quiet, formal hearings from my days on the National Bankruptcy Review Commission, with all the lobbyists in expensive suits and carrying elegant briefcases. This was more like a PTA meeting or a church revival.

The hearing was held in a bright new auditorium at the University of Nevada–Las Vegas. A practice space for law students, the auditorium was outfitted as a mock courtroom. Damon, Richard, and I sat in front where the judges would sit, and I had the gavel. The room was crowded with people in jeans or work uniforms, and they were fired up. A few bank lobbyists may have been sitting in the audience, but if so, they were lying low.

A number of reporters showed up, and the hallways were crowded with television cameras. We had scheduled several people to testify, including policy wonks and businesspeople. But we also heard from some of the people whose lives had been torn apart by the crisis. The witness I will never forget—the man who made it clear what this catastrophe was all about—was Mr. Estrada, the father of two little girls.

Mr. Estrada wore a jacket over his T-shirt and had on a red US Marine Corps baseball cap. He and his wife both worked, and they had stretched their budget to buy a home that would get their girls into a good school. Their home meant everything to Mr. Estrada: “This is my dream house, because I can open my garage door and see my daughters playing right directly across the street because that’s where their school is at.” When the payments on their mortgage jumped, they fell behind. He tried to negotiate with the bank, and he thought he and the bank had arranged a settlement. Then—
poof!
—the house was sold at auction. “So at the end,” he said, the bankers “tell me that I have fourteen days to get my children out of the house.”

Mr. Estrada explained what happened next:

My six-year-old came home the other day with a full sheet of paper with all of her friends’ names on it. And she told—she told me that these were the people that were going to miss her because we were going to have to be moving. And I told my daughter, I says, “I don’t care if I have to live in a van. You’re still going to be able to go to this school.” I’m trusting in God that we’re going to be able to be back into this home again.

Several times Mr. Estrada paused to try to get control of himself, and his pain and desperation seemed to push all the air out of the room. I held my breath, hoping I wouldn’t cry, and I noticed that Damon’s hands were shaking. Even now, I think about Mr. Estrada and his little girls. This wasn’t supposed to happen.

Others came forward to tell similar stories. The oversight panel didn’t have any money to give out, and we didn’t have the power to stop any of the foreclosures. But we promised to tell their stories and to remember them when we did our work. It wasn’t anywhere near enough, but at least it was something. People thanked us for coming and filed quietly out of the auditorium.

After the hearing, Damon, Richard, and I drove through Las Vegas neighborhoods not too far from the beautiful hotels and dramatic fountains. We saw vacant homes and a pickup loaded with furniture, foreclosure postings, and abandoned construction sites. No glitzy casinos here. Instead, we saw evidence everywhere of the countless people who had believed in the American dream, worked hard to make it a reality, and then lost it all.

Treasury Ignores COP

I left Las Vegas and spent the next week worrying about Treasury’s response. Our report had asked just ten questions of the Treasury Department. If they planned to cooperate, we should be getting some good answers any day now.

Bruce and I went to California for Christmas with our children and grandchildren. By this point, Octavia was seven and Lavinia was three. The girls were at delicious ages—they loved baking holiday cookies and dressing up like princesses. They thought their “Gammy” (as Octavia had dubbed me) was the best. But that Christmas holiday passed in a blur, as I paced up and down the sidewalk in front of Amelia’s home, exchanging anxious cell phone calls with other panel members, while the rest of the family was inside wrapping presents.

On December 30, I got the call: Treasury had responded. I opened my laptop and downloaded their letter, eager to see what they had given us. The answer? A big nothing sandwich. I was stunned. Later, ABC News summarized the Treasury response this way:

Cut-and-paste reports were once the domain of high school cheats cutting corners on their term papers.… Rather than write original answers to questions posed in December by a congressional oversight panel, U.S. Treasury officials appear to have creatively repurposed old testimony and even Web site copy into a 13-page report that left some questions entirely unanswered.

The secretary of the Treasury had just blown off the COP panel.

As I saw it, this was a make-or-break moment for us. We had asked the simplest possible questions in the bluntest possible language so that everyone could see the insiders’ plan for rescuing our economy. By not taking our questions seriously, the Treasury Department had treated oversight as irrelevant. In effect, they had said, “Trust us to do the right thing. Now go away.” This time we had a choice: We could either call them out on it or go hide in a corner for the rest of our tenure.

The next COP report was due in ten days. What should we do?

Easy: We decided to make it clear just how completely Treasury had ignored COP’s oversight questions.

For our second report, we made a table. We put each question from the first report in one column, wrote Treasury’s answer to that question in a second column, and then added our own comment in the third column. If Treasury hadn’t responded to a question, we wrote “No Response” in the second column. In the end, out of ten questions, Treasury gave no response or only partial responses to all ten. As we filled in “No Response” over and over, I could hear the BS whistle loud and clear.