'Inside Job' Director Charles Ferguson, Taking Wall Street Firmly To Task

toggle caption Mariusz Cichon/Sony Pictures Classics

"I thought I was prepared," says documentary filmmaker Charles Ferguson -- prepared for what he'd learn about the "bad behavior" among Wall Streeters that led to the global financial meltdown.

Not so much.

"I had grossly underestimated the level of extraordinarily unethical and even fraudulent behavior that had occurred on such a large scale," Ferguson tells All Things Considered host Melissa Block, in a conversation airing Friday.

Investment banks selling defective securities -- even designing securities to be defective, so they could make a profit betting against them?

"If somebody had told me in the fall of 2008 that this had gone on on a huge scale -- tens of billions of dollars -- I would have said, 'No, that's just too extreme. People don't do that. And if you do do it, you would go to jail.' They did do it, and nobody's gone to jail."

The movie, opening Oct. 8, includes a testy exchange between Ferguson and former Bush adviser Glenn Hubbard, who's now the dean of Columbia Business School -- and, Ferguson argues, part of an academic culture that has allowed the financial services industry to corrupt the study of economics itself.

"Very prominent professors of economics, often people who've also held high government posts, are paid to testify in Congress," Ferguson explains. "They are paid to be expert witnesss in both civil and criminal trials. They're often paid to write papers that praise the financial services industry, and argue on behalf of deregulation of the industry. They make millions, in some cases tens of millions of dollars, doing this. And this is usually not disclosed."

That analysis might be why Hubbard, when Ferguson asks him whether he's got ties with financial services firms, responds with a cool one-word answer: "Possibly."

"You don't remember?" Ferguson presses.

"This isn't a deposition, sir," Hubbard replies. "I was polite enough to give you time -- foolishly, I now see. But you have three more minutes. Give it your best shot."

Ferguson says meeting Hubbard and other powerful figures in the industry was a eye-opening experience.

"These people were not used to being challenged," he says. "They'd never been questioned about this issue before. They clearly expected to be deferred to -- by me, and I think by everybody."

Of all the confounding things he discovered, Ferguson says two of the most mind-boggling are these:

"There has not been a single prosecution of a senior financial services executive, either in investment or commercial banking."

"The government has not chosen to use the same tools that it routinely uses when it's prosecuting organized-crime cases."

Contrary opinions from some legal experts notwithstanding, Ferguson says he's convinced the feds have reason to go after Wall Street with the same "energy and determination" it brings to bear on organized crime.

"As a practical matter, it's impossible to do what they did without committing criminal fraud," he says bluntly. "And so I think it's overwhelmingly likely that large quantities of criminal fraud were committed."