Wall Street Whistleblower: The Vindication of Brooksley Born

There is no shortage of challenges facing Washington these days, so don’t be surprised if we have a series of high profile partisan battles raging on Capitol Hill similar in scope to that of the recently passed knock down drag our fight over health care reform. Queue the bell for round two – financial reform.

Reforming Wall Street is going to be just as intense as health care. Both have an army of lobbyists that will swoop into Washington to vigorously defend the financial interest of its shareholders. Both have CEO’s who are a washed in money, and like the health care system, a lack of regulation in the financial institutions leave the American economy (and to a greater extent with Wall Street – the global economy) vulnerable to its malfeasance.

Senate Banking Committee Chairman Chris Dodd is introducing a financial regulatory bill this week. With that you are going to hear a lot of fancy exotic financial jargon flooding the airwaves and the Senate floor like commodities, credit default swaps, derivatives, etc. You’re going to hear a lot about past legislations like The Glass Steagle Act of 1933 , The Gramm Leach Bliley Act of 2000, etc. You’re also going to hear the names of regulatory agencies like Commodities Future Trading Commission (CFTC), Securities and Exchange Commission (SEC), Federal Reserves, etc. And when it comes to actors, you’re going to hear names like Former Federal Reserve Chairman Alan Greenspan, Treasury Secretary Tim Geithner, Former Treasury Secretary Robert Rubin, Former Texas Senator Phil Gramm, former presidents Bill Clinton and George W. Bush, etc.

However if you don’t care to remember a single name out of all of this, remember the one: Brooksley Born. She is the former chairperson of the CFTC who in vain tried to regulate the multi-trillion dollar derivatives market. She was a whistleblower who tried to warn of the pending financial doom that was sure to come by not regulating this illusive and complex financial instrument. And like all Washington whistleblowers before her and ever since, she only gained some notoriety after her warnings were not heeded and her “I told you so” moment resulted in the greatest financial train wreck since the Great Depression.

If Alan Greenspan is Goliath, Brooksley Born is David, except in this epic battle Goliath won. Like most prophets screaming in the desert whose apocalyptic visions are ignored until it is too late, Brooksley Born is one name you can be sure opponents of financial reform, including the 1500 Wall Street lobbyists coming to Washington this week to block reform, will use all in their power to send back into obscurity so that greedy Wall Street executives and nefarious politicians can get back to their shenanigans of reaping short term gains to the peril of the American tax payers’ long term financial security. But as Congress takes up financial reform, proposing to regulate the derivatives market, many in an effort to cover their tracks pretending they had no clue that calamity would come our way as a result of leaving this part of the market unregulated, we would be remissed not to remind them of the warnings of Brooksley Born. She was muffled and pushed out of Washington because she was a Debbie Downer on Alan Greenspan and Wall Street’s free market party, and to allow any mention of over the counter derivative reform without crediting her for trying to do something about it even before the collapse will only be adding insult to both hers and the American tax payers’ injuries.

Watch the full PBS documentary online The Warning: