Obama’s chance to lift the lid on the Bush years

The notion of putting the Bush years on trial has never held allure for President Obama; even less so that of putting Wall Street in the dock. From his lips has always dropped the catechism of uplift and forgiveness, of "moving forward".

He and his advisors had supposed that closing down Guantanamo and issuing a stern denunciation of torture would be sufficient advertisement of the new era; that a few terse reprimands for excessive bonuses for executives would slake the public appetite for retribution on the bankers and tycoons.

On torture, as he approaches the 100-day benchmark, Obama has been forced to change step, in response to public outrage at the chilling stream of memoranda documenting the savageries, and legal justifications for same, ordered and subsequently monitored in minute detail by the Bush high command.

Obama's continuing aversion to any serious calling to account of the sponsors of torture has been evident in his almost daily shifts in position. At the start of this last week he indicated that yes, those okaying the tortures might be legally answerable, that a "Truth Commission" might be the way forward.

By Thursday he was backing into that, saying that a commission would "open the door to a protracted, backward-looking discussion" and in the language of his press secretary, "the president determined the concept didn't seem altogether workable in this case" because of the intense partisan atmosphere built around the issue.

So it's still not clear whether Bush, Cheney, Rumsfeld and their subordinates will have to endure the soft option of a bipartisan commission of enquiry, or face a special prosecutor, or sit back and watch political momentum flag as the issue devolves into lengthy and possibly closed hearings by the Senate Intelligence Committee.

As Republicans have not been slow in pointing out, senior Democrats in Congress were certainly complicit in sanctioning torture as early as 2002. They say House Speaker Nancy Pelosi endorsed waterboarding. She says she did not.

As always, former vice president Cheney has usefully raised the stakes. Did the various tortures, the hundreds of waterboarding sessions, the exposure of naked captives to weeks of intense cold in small concrete boxes, actually make America safer? Cheney snarls on television that they did, thus inviting documented ripostes that this is far from clear, and indeed they contributed nothing of advantage to the national interest.

Nancy Pelosi wants to call congressional hearings like those of the Roosevelt eraA serious probe into the way Wall Street did business before the crash and during the bailout is even more politically fraught. Bipartisanship has always been the order of the day when it comes to enthusiastic receipt of campaign donations from the financial services industry, by far the most extravagant supplier of funds to Democrats and Republicans alike, not omitting Obama himself, whose campaign accounts overflowed with money from Goldman Sachs and the big Wall Street firms.

But with each fresh billion dollar outlay of bailout money there's been an uptick in public resentment, which is why Nancy Pelosi let it be known last week that she proposes to launch Congressional hearings into Wall Street's malpractices, along the lines of the famous hearings of the Roosevelt era, conducted by the Senate Banking Committee and led by the committee's chief counsel, Ferdinand Pecora.

The diligent Pecora, formerly an assistant District Attorney from New York, used his subpoena power to expose the double dealing and chicanery of Wall Street's most prominent denizens, among them Richard Whitney, Thomas Lamont and JP Morgan himself. His hearings set the stage for the regulatory apparatus set up by Roosevelt and the Democrats, ultimately dismembered in the late 1990s in a bipartisan spirit by Bill Clinton and his Treasury Secretary Robert Rubin, working in consort with Republican senator Phil Gramm.

To be anything other than a pro forma whitewash, Pelosi's Pecora-style committee would have to have a relentless chief counsel and power of subpoena. How diligent and merciless the congressional inquisitors will be is open to surmise. As a story on Bloomberg News - citing the Center for Responsive Politics, pointed out last week, Wall Street's individual and political action committee donations in 2007 and 2008 totalled $463.5m, compared with $163.8m from the health-care industry and $75.6m from energy companies.

Individual and PAC donations from Goldman Sachs Group Inc. which totalled $30.9m, and Citigroup Inc, at $25.8 million, were higher than those from any other company except AT&T Inc.'s $40.9m over the last 20 years.

Every decade or so, we get Congressional hearings that dramatically symbolise a significant change of step. The original Pecora hearings did that. The McCarthy hearings of the early fifties served as a buttress for the Cold War and domestic red-baiting. The Fulbright committee hearings into the Vietnam war in the Sixties were important.

In the 1970s it was the Watergate hearings chaired by Senator Sam Ervin that set the stage for Nixon's ejection from the White House. In the 1980s when Republicans controlled Congress, the "Contragate" hearings  discomfited Reagan and gave Ollie North his launch-pad as the hero of the right. The 90s gave us the glorious diversions of Bill Clinton's impeachment.

Is it possible that well-staged hearings into the way Wall Street really did business across the past 15 years will be as momentous? The odds are against, since too many big players in the White House, the Congress and on Wall Street, have too much to lose.  But as with settling accounts with the Bush years on torture, it's a matter of political pressure and political circumstance.

Obama has sensitive antennae to opinion, hence his wavering across the last week. Pelosi knows the level of popular fury at the bankers and Wall Street. Hence her signal about a Pecora-style probe. If the economic crisis deepens and the bankers howl for more bailout money, the Democrats could see advantage in a set of tough hearings, just as FDR did in 1933. ·