Heads Of Financial Crisis Commission Call Wall Street Bonuses Unjustifiable, Vow To Investigate (EXCLUSIVE)

The chair and vice chair of the federal commission charged with investigating the causes of the financial crisis had harsh words on Tuesday for the Wall Street banks that are preparing to grant their executives enormous bonuses. And they said that the huge profits some banks have made as a direct result of a massive infusion of taxpayer funds are going to be part of the panel's investigation.

"This dichotomy of record profits and bonuses on Wall Street while you have real unemployment of 15 percent-plus in this country is very striking," Financial Crisis Inquiry Commission Chairman Phil Angelides said during a visit to The Huffington Post's Washington bureau. "Our primary mission is not to re-litigate TARP, but I do think in examining the crisis it's legitimate to look at where things stand today, and we're going to do that."

Angelides, a Democrat and former California state treasurer, and the commission's vice chair, former longtime Republican Congressman Bill Thomas, said the commission will produce a report on the causes of the crisis by next December.

But in the meantime, they are plenty frustrated by what's happening on Wall Street.

"I think a legitimate question is: the bonuses are based on what? The ability to borrow cheap? And the ability to make money on that spread?" Angelides asked. The Federal Reserve's near-zero borrowing rate has enabled banks to borrow for basically nothing yet lend it out at normal rates to households and businesses, pocketing the difference.

"I'm not running those businesses, but the bonuses are offensive to me and to a broad segment of the American public," he said.

Angelides added: "Our job is to examine the meltdown. From a personal viewpoint, this disconnect between how Americans are faring and what's happening on Wall Street with respect to bonuses is extraordinarily disconcerting."

Thomas lashed out at the Wall Street titans he mockingly called the "Masters of the Universe," saying: "I am absolutely outraged at people who took government money, went to bed that night, woke up, and [then could say] that they didn't need to take it."

He said the bailout has had the effect of encouraging the same kind of behavior that got the country into its current economic mess. "And now they're making a lot of money, and they're going to go back to the same old behavior that encouraged people to take inordinate risks with other people's money," he said.

"What difference does it make if it comes from private [funds] or taxpayers? It's money that can be fed into the mill that produced bonuses for me," he said channeling a Wall Streeter.

Angelides said the bonuses are "unjustifiably wrong," to which Thomas quickly added, "And dumb! I mean, why do you draw attention to yourself right now?" he asked.

Angelides said the banks benefited enormously from government intervention, including the ability to borrow cheaply and the deals they got in the taxpayer-funded bailout known as TARP:

"The deal that those banks got was a stunning deal, un-gettable in the private sector," he said. "The notion that a corporation could be on its knees, about to go to bankruptcy, and get money that they could effectively borrow at seven or eight percent is, you know, it's just nothing that any private equity firm would have done, that any private source of capital would have done. And so I think it's fair to say the American taxpayer enabled many of these companies to survive and be in the position they're in today -- and that's not unnoticed." Private investors, he said, would have wanted more like 30 percent interest.

"Bank of America -- they took $45 billion, right?" Angelides said. "They're talking about a payoff. The government is saying they're going to make two-and-a-half billion [in profit]. Annualized, that's probably seven to eight percent interest."

To which Angelides exclaimed, "What a deal!"