Time to dig: Tester prods federal agencies to investigate banking mess

Given the recent collapse of several cornerstone investment groups and the mind-boggling $700 billion bailout package Congress approved to rescue them – er, us – from financial ruin, you would think our congressional leaders would be doing everything in their power to identify just what went wrong.

And you'd be right. Montana Sen. Jon Tester, for instance, fired off a letter last week to the Securities and Exchange Commission and the U.S. Department of Justice urging special investigations into possible wrongdoing leading up to the financial crisis.

As a matter of fact, Tester has been calling for such investigations for many months now. Back in April he asked Securities and Exchange Commission Chairman Christopher Cox and U.S. Attorney General Michael Mukasey to look into certain practices affecting investment giant Bear Stearns, which was saved from bankruptcy only after the Federal Reserve agreed to back a $29 billion loan to JPMorgan Chase so it could buy the firm.

Unfortunately, the government entities responsible for regulating the nation's financial industries do not appear to be digging very deeply. The SEC has cast a broad net of subpoenas over the last few months but has done little to follow up on them – at least, not publicly. Now more than ever, financial regulators need to make it known that they are doing all they can to hunt down those who may have profited through illegal activity. Tester, a member of the Senate banking committee and one of only two dozen senators to vote against the bailout bill, is right to hold their feet to the fire.

"While we cope with the fallout of the economic situation and plan on how to move forward, it is imperative that we do not ignore what brought us to this point," Tester wrote in last week's letter. "The actions of some may very well cause dire consequences for the entire nation. It is now up to the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) to conduct exhaustive investigations into any and all illegal activities that may have played a minor or major role in this catastrophe."

It may well be that such "exhaustive investigations" would only show that insider trading and other illegal practices were not a significant factor in the financial crisis. If so, that would go a long way in restoring the public's confidence – which is itself an important pillar of our economy.