From NBC's Athena Jones
CHICAGO -- The $50 billion Bernard Madoff scandal that has rocked New York took center stage here at Obama's press conference this morning, as the president-elect pointed to the massive Ponzi scheme as another indication that the nation's financial regulatory system must be overhauled.
He also responded to the controversy surrounding his selection of evangelical minister Rick Warren to give the invocation at his inauguration on Jan. 20.
On the campaign trail this fall, as the crisis on Wall Street worsened, Obama spoke frequently about the need for what he called a 21st-century regulatory framework. He stressed that theme again today in announcing Mary Schapiro as his pick to head the Securities and Exchange Commission, Gary Gensler to head of the U.S. Commodity Futures Trading Commission, and Georgetown professor Daniel Tarullo to an open Federal Reserve Board seat.
"In the last few days, the alleged scandal at Madoff Investment Securities has reminded us yet again of how badly reform is needed when it comes to the rules and regulations that govern our markets," Obama said. "Charities that invested in Madoff could end up losing savings on which millions depend -- a massive fraud that was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball. And if the financial crisis has taught us anything, it's that this failure of oversight and accountability doesn't just harm individuals involved ;it has the potential to devastate our entire economy."
The president-elect said instituting a new regulatory framework would be "one of the top legislative priorities" of his administration, as suggested by the fact that he was announcing these appointments much earlier than past administrations have done. This regulatory-minded team would be tasked with putting in place "new common-sense rules of the road" to protect, consumers, investors, and the economy, as well as cracking down on what he called the "culture of greed and scheming" at the root of the current problems.
Obama said his team would be releasing a "very detailed plan" for how to go about revamping the system, and suggested it might be necessary to merge some agencies to improve and strengthen the regulatory system.
Schapiro, Gensler, and Tarullo would take office at a time when individuals and businesses are facing a severe credit crunch and a deepening recession, and also when many investors and ordinary Americans want to see better oversight of Wall Street to help avoid a repeat of the recent financial market meltdown regulators failed to prevent. The SEC has been criticized for failing to avert the collapse of Bear Stearns and Lehman Brothers and for not acting on nearly a decade of credible allegations of wrongdoing by Madoff.
"Investor trust is the lifeblood of our financial markets," Schapiro said during her brief remarks. "The only way to restore the trust that has been lost is through effective, thoughtful reform of our regulatory structure and the consistent and robust enforcement of our financial regulations and this will be my top priority."
Outgoing Securities and Exchange Commission Chairman Christopher Cox commended the choice of Schapiro: "I have worked closely with Mary for many years on a wide range of financial industry and market regulation efforts, including the creation of FINRA and the protection of senior investors, and she has always been a consummate professional," the Cox statement read in part. "Her experience at both the CFTC and SEC will be invaluable in tackling the challenges of regulatory restructuring that the next Congress will face."
Obama on Rick Warren
In answering a question about the invitation extended to evangelical Pastor Rick Warren of to participate in his swearing-in ceremony -- a decision that angered gay rights groups because of Warren's support for the California ballot proposition that banned gay-marriage -- Obama emphasized his strong commitment to equality for gays and lesbians and the importance of listening to diverse viewpoints.
"That dialogue, I think, is part of what my campaign's been all about: That we're not going to agree on every single issue. But what we have to do is to be able to create an atmosphere when we -- where we can disagree without being disagreeable and then focus on those things that we hold in common as Americans," he said. "That's the spirit in which, you know, we have put together what I think will be a terrific inauguration and that's, hopefully, going to be a spirit that carries over into my administration."