As 2009 draws to a close, CREW is looking back at what quickly became a busy year for ethical lapses in our federal government. Today, CREW released its list of the Top Ten Ethics Scandals of 2009 – a roundup of the year’s most outrageous government scandals.

The unranked list includes:

Believe us – we had a plethora of scandals to choose from.

Melanie Sloan, CREW’s executive director, explained CREW’s hopes for the new year:

It would be nice if 2010 proved to be the year politicians put Americans’ interests above their own, but I won’t hold my breath.

Click here (PDF) to read CREW’s Top Ten Ethics Scandals of 2009.

Since the Madoff scandal story broke last December, there have been questions about the role of the Securities and Exchange Commission (SEC). Today's Washington Post reveals that an investigator at the SEC became aware of issues with Madoff's company, but was pulled from the case.  And, her supervisor, according to the Post, went on to marry Madoffs niece:

An investigator at the Securities and Exchange Commission warned superiors as far back as 2004 about irregularities at Bernard L. Madoff's financial management firm, but she was told to focus on an unrelated matter, according to agency documents and sources familiar with the investigation.

Genevievette Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and Examinations, sent e-mails to a supervisor, saying information provided by Madoff during her review didn't add up and suggesting a set of questions to ask his firm, documents show. Several of these questions directly challenged Madoff activities that much later turned out to be elements of his massive fraud.

But with the agency under pressure to look for wrongdoing in the mutual fund industry, she wasn't able to continue pursuing Madoff, according to documents and two people familiar with the investigation, and her team soon concluded its work on the probe.

Walker-Lightfoot's supervisors on the case were Mark Donohue, then a branch chief in her department, and his boss, Eric Swanson, an assistant director of the department, said two people familiar with the investigation. Swanson later married Madoff's niece, and their relationship is now under review by the agency's inspector general, who is examining the SEC's handling of the Madoff case.

From the Washington Post, we get an examination of former Congressman Christopher Cox's tenure as Chair of the Securities and Exchange Commission (SEC).  It's pretty clear that enforcement and punishment weren't high on the agenda.  They were barely on the agenda at all:

The five enforcement officials caught a morning Acela train bound for Washington. Based at the New York office of the Securities and Exchange Commission, the team was seeking agency approval to impose tens of millions of dollars in fines on a drug company, Biovail, which had allegedly used the crash of a truck hauling depression medicine to cover up financial losses.

But when the group arrived at SEC headquarters on that winter day early last year, it was barred from the room where the commission was meeting, according to a person familiar with the case. Chairman Christopher Cox and his colleagues reviewed the case inside. When the doors opened, the enforcement officials learned the commission had knocked down the penalty to a small fraction of what they had sought.

The outcome, though discouraging to the team, was not a complete surprise, sources said. After Cox became SEC chairman in mid-2005, he adopted practices that undermined the enforcement division's efforts to investigate cases of corporate wrongdoing and punish those involved, according to interviews with 19 current and former SEC officials.

During Cox's tenure, investigators who wanted to subpoena documents or compel interviews faced an increasingly cumbersome process to win the commission's approval for each case, according to current and former agency officials.

Cox also required enforcement officials to see the commissioners before approaching a company about a civil settlement. In several high-profile cases, when SEC lawyers were ready to ask the commission to authorize lawsuits or approve settlements, Cox postponed the decisions at the last minute, leaving cases unresolved for months, the sources said. At times, as in the Biovail case, the commission eventually weakened the sanctions sought by the enforcement division.