SEC officials spent hours surfing pornographic websites while they were supposed to be policing the financial system, according to a report recently issued by SEC Inspector General David Kotz.

The report reveals probes of 33 top staffers who were caught spending government time and money looking at and downloading porn within the last two and a half years. Over half the culprits were “senior” employees, earning up to $223,000. One senior attorney in Washington, D.C., was found to have logged eight hours a day downloading porn – when his hard drive space was exhausted he burned the material onto disks that he kept in boxes around his office.

Apart from the sordidness of the conduct, it is most disturbing that many of these transgressions occurred in 2008, while the factors leading to the economic meltdown of that year were developing.