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A Better Weapon for FCIC vs Goldman: The Internet

The Financial Crisis Inquiry Commission is overlooking a key ally in its battle with Goldman Sachs—the American people. And it is forgetting about what should be its most powerful weapon—the Internet.

Earlier this week, commission chair Phil Angelides blasted Goldman for dumping billions of pages of documents on the FCIC’s staff. Since there is no way the FCIC—which has a staff of just 54 people, many of whom are on temporary loan from other government agencies—can sort through that many documents prior to the conclusion of the commission’s investigation at the end of this year, Angelides said Goldman was effectively stonewalling.

FCIC vice chair Bill Thomas said that Goldman’s document dump had led him to suspect that Goldman “may have more to cover up than either we thought or than they told us.”

In an effort to thwart the alleged coverup, the FCIC served Goldman with a subpoena demanding documents and information. This might embarrass Goldman into being more cooperative. But if Goldman fights back, it is unlikely the subpoena will help the FCIC very much. As Peter J. Henning explains in DealBook’s White Collar Crime Watch today, enforcement of the subpoena will involve numerous court hearings that will only cause further delay and sap the limited resources of the FCIC.

So what should the FCIC do? It should unleash the resources of the American people on the Goldman document dump by putting every single document on its website. Instead of a small staff getting buried by the document dump, the FCIC will have an army of concerned citizens pouring through the documents. Bloggers will compete with each other to uncover the juiciest facts disclosed, while reporters comb through looking for headline-worthy material. No doubt someone will start a Facebook page for users to share what they’ve found inside the Goldman documents.

Unfortunately, it seems unlikely that the FCIC will engage in this kind of crowd-sourcing response to the Goldman document debt. Despite its task of revealing the truth about the financial crisis to the American people, the FCIC remains shrouded in secrecy. It will not reveal the names of its staffers. And only a couple of weeks ago, the FCIC had to be cajoled into letting the public even read its ethics policy.

In short, the FCIC’s approach is secretive and driven by the conceit that its experts are better prepared to handle the investigation than the American people themselves. Maybe its frustration with Goldman will convince the FCIC to rethink this approach.

How about it, Chairman Angelides? Why not open up the FCIC vault and let the American people sort through Goldman’s document dump?

Update: Maria Bartiromo asked Angelides about this proposal during a live interview on CNBC's Closing Bell Thursday afternoon:

"It's a very interesting idea, and I'll leave it there. It certainly merits consideration," Angelides said.