Editor's note: Al Franken, a member of the Democratic-Farmer-Labor Party, is a U.S. senator from Minnesota.

(CNN) -- "Let's hope we are all wealthy and retired by the time this house of cards falters."

This quote, taken from an e-mail sent by a Standard & Poor's official in 2006, says it all.

Just two years after it was written, the house of cards that S&P helped build collapsed and roiled the global economy. And while I welcome the news that the Justice Department has launched an investigation into S&P, I imagine it will conclude what a lot of us have long known: S&P made record profits by knowingly handing out sterling credit ratings to complete junk.

It was the incompetence and corruption by S&P and its peers, Fitch and Moody's, that played a pivotal role in our financial meltdown that cost Americans $3.4 trillion in retirement savings, triggered the Great Recession with its massive business failure and job losses, and consequently caused the explosion of our national debt.

The root of this corruption? The flawed "issuer pays" model on which the entire credit rating industry is based. The Big Three rating agencies were paid a fortune by Wall Street to hand out pristine AAA ratings to the subprime mortgage-backed securities the banks issued -- securities that turned out to be junk. No AAA rating? The issuer would take its business -- and its hefty fees -- elsewhere.

And then when Wall Street ran out of subprime mortgages to securitize, it created another market by securitizing bets on those securities, which the Big Three also obediently gave their top rating. The rest is history.

The rating agencies' complicity bred the kind of incompetence that was on full display the day S&P downgraded our government's credit rating this month. Within minutes, Treasury Department analysts identified a $2 trillion dollar error in S&P's calculations. But instead of admitting its error, S&P simply came up with other reasons to justify its downgrade.

Why? Well, the rating agencies have an enormous stake in intimidating the federal government. As Jeffrey Manns, associate professor of law at George Washington University, recently wrote in The New York Times:

"The credit rating agencies are taking advantage of the country's financial problems to increase their own political power. ... The Dodd-Frank Wall Street reform law, enacted a year ago but not fully implemented yet, threatened to introduce unprecedented oversight and regulation."

The greatest such threat is the bipartisan Franken/Wicker provision (introduced with Sen. Roger Wicker, R-Mississippi) in the Dodd-Frank Wall Street reform bill. If our provision is implemented in full, it would end the credit rating agencies' gravy train by rooting out the conflicts of interest from the "issuer pays" model.

Our provision directs the Securities and Exchange Commission to create an independent self-regulatory organization that would assign the initial credit ratings of securities to one agency. The assignments could be based on agencies' capacity, expertise, and, after time, their track record.

Our approach would incentivize and reward excellence. The current pay-for-play model -- with its inherent conflict of interest -- would be replaced by a pay-for-performance model. This improved market would finally allow smaller ratings agencies to break the Big Three's oligopoly.

The independent board would be comprised mainly of institutional investors, who have the greatest stake in the reliability of credit ratings, along with representatives from the credit rating and banking industries.

Lest you think that this is some kind of big government regulation of the free market, please understand that my colleague, Wicker of Mississippi, is one of the Senate's most conservative members. And it passed the Senate with a large majority, including 11 Republican votes, because it's not a progressive or a conservative idea -- it's a commonsense idea.

Our proposal encountered resistance from the Big Three rating agencies at every step. They defeated a similar provision in the House of Representatives, lobbied against it during the Senate debate on the bill and ultimately succeeded in "downgrading" the provision to a study in the final legislation. Still, the final language requires that the SEC implement our provision, or a similar alternative, if its study reveals that the conflicts of interest continue to put investors and the public at risk.

The Big Three are well aware that their fates rest, in part, on the outcome of this SEC study, due out next year. And the S&P's recent downgrade may well have been the industry's shot across the bow, an attempt to intimidate SEC regulators. It appears that the rating agencies have essentially gone from being recipients of bribery to the perpetrators of extortion.

When the Big Three's house of cards finally collapsed, the rest of America paid the price. Until we rein in the corruption of the credit rating agency industry, we are just asking for it to happen all over again.

The opinions expressed in this commentary are solely those of Al Franken.