The AP reports:
The watchdog of the Securities and Exchange Commission has found that three agency exams and two investigations of Bernard Madoff’s business were incompetent, despite ample warnings of the multibillion-dollar fraud. But SEC inspector general David Kotz’s report found no evidence of any improper ties between agency officials and Madoff.
This conclusion by the IG, that agency officials were merely incompetent and not corrupt is quite a leap of faith. It is a prime characteristic of government organizations that it is impossible to distinguish between incompetent and corrupt behavior.
Now, it is true that strictly speaking, the low-level know-nothings staffers did not commit illegal or corrupt acts in their bungled investigations. After all, they were too busy going after Martha Stewart.
No, the key question (not examined by the IG) is how the SEC, one of the most important regulatory bodies in the country, came to be staffed by nitwits?
Was it due to cuts in funding? Political patronage? Did the SEC develop an institutional culture of not going after major players? And what role did Wall Streets huge campaign contributions play in all this?
In other words, the scandal was caused by complex systemic issues. Distinguishing between corrupt and incompetent actions is almost impossible.