As I noted last year, you can tell how interested Congress and the White House are in uncovering the truth by looking at how much money is actually budgeted for investigation:
The government spent $175 million investigating the Challenger space shuttle disaster.
The government only authorized $15 million for the 9/11 Commission.
And how much has the government authorized for the Financial Crisis Inquiry Commission? You know, the commission charged with getting to the bottom of what caused the financial crisis?
Just $8 million.
These figures don't account for inflation. For example, the Challenger investigation cost over $300 million in today's dollars.
You can tell alot about the questions which the government is truly interested in finding answers to by the amount of money it authorizes for the various investigations.
The lack of any real interest in uncovering - let alone prosecuting - financial fraud is again on display.
The Commodity Futures Trading Commission has halted development of a technology program used to flag suspicious trading because of an $11 million cut in its technology budget, increasing rancor within the small agency about how it should spend its money.
The tensions offer a taste of spending battles to come at the CFTC and Securities and Exchange Commission if, as seems increasingly likely, Congress refuses to increase the agencies' funding to deal with new mandates created by the Dodd-Frank financial-reform act.
These squabbles have a long history, and often involve budget-process bluffing and gamesmanship between Congress and regulators. The regulators say it's different this time because of the extensive new responsibilities they have been handed under last year's Dodd-Frank legislation. The two agencies say they need another 1,200 staff in total to implement and enforce the sweeping financial overhaul.
"If the requested budget increases are not granted, we will manage within our allocated resources but we'll face a lot of bad choices," Luis Aguilar, a Democrat SEC commissioner, said in an interview.
Such tough choices are already being faced by the CFTC, which has cut $11 million from this year's technology budget, some of which was supposed to help the agency expand an automated surveillance system to examine trades in the futures market.
The system is used to scan millions of trades, looking for patterns that suggest potentially illegal activity. It has only a "handful of alerts, when we need dozens of them," according to someone familiar with the situation.
"It's something we should already have had," Mr. O'Malia, the Republican, said in an interview. "Technology is important in every investigation. We need to look at massive amounts of data, millions of trades."
Enforcement work at the SEC is also suffering from an austerity drive, say SEC officials. A ban on nonessential travel has left a number of investigations "in limbo," according to a person familiar with the situation. The person said that foreign bribery cases are being hit particularly hard, because of the need for overseas travel to investigate the allegations.
Complex accounting-fraud cases are also being affected by curbs on the use of expert witnesses, the person said.
"We've had budget freezes before. But this level of clampdown, with every nickel being flyspecked before we can spend it, is unprecedented in my experience," the person said.
Mr. Aguilar warned that the current funding squeeze was "debilitating" for the SEC. "The adverse impact that it has cannot be overstated," he said.
Rep. Scott Garrett (R., N.J.) a top member of the House Financial Services Committee, last month argued that the big spending increases being sought by the agencies "would further the mindset that our nation's problems can be solved with more spending, not more efficiency."
Both the CFTC and SEC took on extra staff last year, in anticipation of budget increases pledged—but not guaranteed—by Congress to meet their new responsibilities under the Dodd-Frank law. Now they are being forced to cut other spending to meet their higher staffing costs.
The CFTC on Thursday discussed rules to curb "disruptive trading" required by the Dodd-Frank Act. But the agency says it will be unable to use new powers it has under the act to tackle fraud and manipulation unless it is given more funding.
"We've had this terrible track record [on prosecuting manipulation cases] because the law has not been strong enough," said Bart Chilton, a Democratic CFTC commissioner.
"We finally got the authority we needed and now we're not going to be able to use it," Mr. Chilton said.
is very telling that we have enough money to extend the Bush tax cuts,
to throw boatloads of cash at the big banks so that they can give lavish
bonuses, and to continue fighting never-ending wars on multiple fronts
giving no-bid contracts to favored contractors, but we can't scrape
together a little spare change to fund the regulators and prosecutors.
The economy cannot stabilize unless fraud is prosecuted. But the folks in D.C. seem determined to turn a blind eye to Wall Street shenanigans.