In 2005, an assuming math whiz working for a Boston investment management company sent a memo to the Securities and Exchange Commission in Washington. It was plainly titled:

“The World’s Largest Hedge Fund is a Fraud.”

The SEC’s response to Harry Markopolos 21-page memo, laying out in exact detail what would later become the Bernie Madoff ponzi scheme?

Dead silence.

Markopolos would later tell interviewers he thought the SEC’s disinterest stemmed from investigative ineptitude and financial illiteracy.

Now we know there may have been another reason — some highly placed SEC staffers were too busy surfing the Web for pornography.

A new report, based upon an investigation requested by Sen. Chuck Grassley, R-Iowa, found 31 cases of SEC employees spending hours — some their entire work days — viewing porn on the Web, even as the financial crisis in the U.S. was unfolding.

The 31 cases involve fewer than 1 percent of the agency’s 3,500 employees. However, some of the people caught weren’t exactly working in the agency’s mail room.

The report says more than half the offenders were senior SEC people, with salaries ranging from $100,000 to $222,000 per year.

No wonder. Lower-level people probably had actual work to do.

One senior attorney in Washington spent as much as eight hours a day viewing Internet porn. After filling all the space on his hard drive, he began downloading to CDs and DVDs he kept in his office.

A staff accountant used his computer to upload his own explicit videos to Web sites.

Another accountant tried to access porn sites 1,800 times in a two-week period.

The report goes on, but you get the idea.

And this isn’t the first time investigators have discovered federal employees abusing their computer privileges.

A senior executive at the National Science Foundation spent 331 consecutive work days looking at pornography on his computer and chatting with nude or partially clad women online, according to the Washington Post.

While the superintendent of the Gettysburg National Military Park used his computer to search out 3,400 sexually explicit images, according to the Post. He was later reassigned to “an unspecified desk job” that we hope involves a typewriter rather than a computer.

If politicians are mystified by the growing anger toward the federal government, best represented by the Tea Party movement, they need look no further than this latest instance of incompetent management.

Worst, we are usually left with no idea whether or not public employees like this are held accountable.

How many people in the SEC got Harry Markopolos’ memo on Madoff’s scheme? How many of them have since been canned?

None, so far as we can tell.

In testimony before Congress, Markopolos said:

“It is time the nation woke up and realized that it’s not the armed robbers or drug dealers who cause the most economic harm, it’s the white collar criminals living in the most expensive homes who have the most impressive resumes… They steal our pensions, bankrupt our companies and destroy thousands of jobs, ruin countless lives.”

Nearly as guilty are the federal officials and agencies who so spectacularly fail to protect the public interest.

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