05/08/2009 05:12 am ET | Updated May 25, 2011

Chris Dodd: Scourge or Casualty of Wall Street?

Democratic Senator Chris Dodd is in deep trouble. According to Stuart Rothenberg, Dodd is the most vulnerable Senator up for re-election in 2010 - despite the fact that he's coasted to election easily in this deep blue state since his first Senate run in 1980.

A March Quinnipiac University poll of registered voters showed only 33% of voters approve of the job Dodd is doing, while 58% disapprove. He trailed his likely Republican opponent, Rob Simmons by double digits.

Dodd's reputation has been sullied in the financial collapse. Chair of the Senate Banking Committee, he received special treatment from lender Countrywide Financial (and was designated as a "friend of Angelo"). Countrywide, founded by Angelo Mozilo, was a leading peddler of the toxic loans that poisoned the financial system - particularly the subprime "Ninja loans" - mortgages to applicants with no income, no job and no hope.

As Chair, Dodd also was thrown under the bus by Treasury officials in the AIG bonus brouhaha, finally admitting that he had stripped the provision that would have limited the bonuses of AIG execs from the stimulus bill. Worse, Dodd's wife turned out to be on the board of directors of IPC Holdings, a Bermuda based insurance company controlled by AIG.

Very deep trouble.

So, why not turn the lemons into lemonade? As Chair of the Senate Banking Committee, Dodd could make himself into the source of the solution, not part of the problem. We need a Pecora Commission - a grand inquest into the roots of the financial crisis, modeled after the investigation led by Ferdinand Pecora in the 1930s. But the Pecora wasn't running an independent commission. He was Chief Counsel for the investigation of the Senate Banking Committee.

Dodd would render the country - and possibly his own political fortunes - remarkable service if he decided to lead a similar investigation into the current collapse. Subpoena the records of Countrywide and others and expose the systematic fraud and malpractice that went on. Call in the heads of Citibank and Goldman Sachs and Bank of America and detail how they abandoned all prudence in pursuit of millions in private profits. Lay out for Americans the conflicts of interest that led the rating companies to go with the flow, the ideological blinders that allowed the regulators and Federal Reserve to overlook the gambling going on in the casino. Expose the banking lobbies and deregulation that spawned the shadow banking system.

Serious hearings on the roots of the collapse are essential if we are to achieve fundamental reform and restructuring of finance. Explosive hearings could warn the Obama administration off its unworkable plans to enlist hedge funds in the effort to prop up the zombie banks.

By making himself the scourge of Wall Street rather than its servitor, by championing reform in public rather than dealing in Senate cloakrooms, Senator Dodd would not only create a proud legacy, he might also be revive his own political fortunes. Chris Dodd, driving the change that we need. Sounds like a plan.