One of the more dramatic but less-noticed scenes on Capitol Hill since the Democrats took charge was the sight of Chase Card Services CEO Richard Srednicki apologizing for overcharging credit card debtors.
“In this case, we simply blew it,” Srednicki responded to the sad story of an Ohio man who paid three times what he originally owed to Chase in fees and interest charges.
Leading the charge against the credit card companies was Sen. Carl Levin (D-Mich.), the chairman of the Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations. With broad jurisdiction to probe topics from energy shortages to organized crime, Levin has unrelentingly used his perch to issue subpoenas, mostly, it appears — though the committee would not confirm it — to ferret out corporate malfeasance.
As head of the PSI, as the subcommittee is known, Levin has issued 29 subpoenas since Democrats took the reins of Congress early this year, the largest number from any committee or subcommittee in Congress, according to a Roll Call survey.
Neither he nor his staff would comment on his work.
Among all Congressional committees, at least 88 subpoenas have been issued by Democrats intent on aggressive oversight after six years of what they view as a free pass for the Bush administration.
Rep. Henry Waxman’s (D-Calif.) Oversight and Government Reform Committee has been the loudest in its assault on administration stumbles, winning its battle last week to obtain testimony from Secretary of State Condoleezza Rice on Iraqi corruption and State Department contracting.
With two dozen investigators and the chairman’s microphone, Waxman has lobbed 22 subpoenas to investigate such subjects as the friendly-fire death in Afghanistan of former National Football League star Pat Tillman, political briefings by the General Services Administration and opposition to California’s effort to regulate greenhouse gas emissions.
And the House and Senate Judiciary committees have issued an equal number of legal challenges to top Justice Department and White House officials over the suspicious firings of nine federal prosecutors in 2006.
But quietly Levin — in cooperation with ranking member Norm Coleman (R-Minn.) and the help of a mere six Democratic staffers — tops them all with his inquiries into risky energy trading, tax windfalls for CEOs receiving stock options and the high interest rates and fees charged by credit card companies.
Several business lobbyists would not even return calls on the subject, and others were unwilling to speak on the record regarding Levin’s efforts and exactly who the subpoenas targeted.
“I think we’d be a lot more comfortable working with the committees of jurisdiction … exercising their oversight authority,” commented one lobbyist with a financial services association.
“I think that this isn’t the normal regulatory oversight that [companies are] used to,” the lobbyist added. “It’s not litigation where civil procedure dictates what’s in bounds and out of bounds. This is the political arena.”
The lobbyist added: “In court, you can raise objections. In the political arena, you better be very careful about raising an objection to the chairman of a committee. Life can become uncomfortable.”
Actually, PSI has long been the Senate’s main investigative body after being founded by then-Sen. Harry Truman during World War II. It has burrowed into such notorious subjects as alleged communist influence in the U.S. Army when chaired by Sen. Joseph McCarthy (R-Wis.) in 1953, and charges of mob influence on the Teamsters union when headed by Sen. John McClellan (D-Ark.) in 1955.
More recently, PSI has investigated campaign finance abuses in the Clinton-Gore 1996 presidential campaign under the stewardship of Sen. Susan Collins (R-Maine), and the Enron debacle and offshore money laundering as part of Levin’s previous tenure, which resulted in changes to anti-terrorism legislation.
The committee works in a mainly bipartisan fashion, with minority assent required before a probe can be initiated, and the minority having the right to review all information that comes in the door.
The committee also works fairly slowly, issuing just two reports this year: one on “dirty bomb” vulnerabilities after a federal sting in which agents posing as construction officers obtained the ingredients for a dirty bomb, and the second, a complex report on speculation in the natural gas market that is likely to result in more government regulation.
“In terms of running a thorough, effective hearing, nobody has a better reputation in this town than Sen. Levin,” said Travis Plunkett, legislative director for the Consumer Federation of America, which consulted on the credit card hearing.
“The subcommittee, both the Republican and Democratic staff, do very thorough investigating. They’re known for their attention to detail and for not rolling out a hearing or report until they’ve gotten everything right,” Plunkett said.
After a series of hearings, Levin and his staff released a 139-page report on June 25 on complex maneuvering by the giant hedge fund Amaranth Advisors LLC after a series of hearings.
The nine-month investigation examined millions of trading records, which were likely gathered by subpoena, from the New York Mercantile Exchange and the unregulated Intercontinental Exchange in a bid to prove that excessive speculation by Amaranth and its 32-year-old chief trader resulted in higher natural gas prices in summer 2006.
“We’re very supportive of what [Levin] has done to try and address the fallout from Amaranth. It’s had a significant impact,” said David Schryver, the executive vice president of the American Public Gas Association.
Earlier in June, Levin went after wealthy corporate executives who took advantage of an accounting quirk to reap huge tax windfalls from deducting billions of dollars in stock options in a different way than they reported them on their corporate books.
Witnesses included such bigwigs as John Chalsty, the compensation committee chairman for Occidental Petroleum, and William Tauscher, the former chairman of a similar committee for Safeway Inc.
But perhaps the committee’s most theatrical and effective hearing was in March, when Ohio resident Wesley Wannemacher explained how he paid more than triple what he originally owed on a Chase credit card in interest and fees.
Chase CEO Srednicki was forced to publicly apologize to Wannemacher and announce the company would no longer charge certain overlimit fees.
“It’s one of the better hearings I’ve ever seen,” Plunkett said. “It focused on the impact of credit-card industry practices on real people.”
“This guy was just telling a story,” Plunkett added, saying, the “trick” is to find witnesses who “don’t look like they’ve been politically programmed to use certain phrases and say certain things.”