“In the hunt for Wall Street villains, a top legislator has set his sights on the gatekeeper to the masses, the mutual-fund industry,” writes Deborah Solomon in today’s Wall Street Journal.

” ‘Are investors getting a fair shake?’ Michael G. Oxley, chairman of the House Financial Services Committee, demanded of fund leaders at a hearing Wednesday in Washington.”

” ‘Recent data indicate the answer is no; fees and expenses, in fact, are going up,’ the Ohio Republican scolded. And those rising fees come as stock-fund holders have seen their retirement accounts shrink month after month.”

“The hearings featured some of the chief critics of how today’s mutual funds are priced and sold. ‘The mutual-fund industry has changed in many ways that have ill-served investors,’ said John C. Bogle, founder and former chief executive of fund company Vanguard Group, who has since become one of the fund industry’s most outspoken detractors. He estimated that, because of various fees paid by investors, mutual-fund returns have performed worse than the weak overall market.”

“Wednesday’s four-hour session followed a months-long attack by Mr. Oxley on mutual-fund companies such as Fidelity Investments and Vanguard for confusing — and potentially harming — investors with an array of opaque fees.”

“It is an uncomfortable time in Washington for the big mutual funds. Though they haven’t been singed by the criminal and ethical scandals engulfing brokerage and accounting firms, they have come under fire from activists, regulators and politicians. Prodded by organized labor, the Securities and Exchange Commission recently passed, over loud industry objections, rules demanding funds disclose their votes on corporate proxy issues such as executive compensation and elections for director seats.”

” ‘We must carefully examine mutual funds and insist on integrity, transparency and accountability,’ Mr. Oxley said in a speech delivered to the conservative Heritage Foundation think tank earlier this year, one of several speeches he has delivered criticizing the funds.”

“Mr. Oxley also ordered up a study by the congressional watchdog, the General Accounting Office, to further dissect mutual-fund charges. A portion of the report, released Wednesday, said that, since 1998, ‘the majority of stock and bond funds we analyzed had higher expense ratios in 2001 than they did in 1998.’ “