In new Hollywood role, former senator plays the heavy

Thanks to Hollywood lobbyist and former Senate banking chair Chris Dodd for telling it like it is.

Dodd warned that Hollywood’s big-money contributors, who have been very, very good to President Obama and his fellow Democrats, might withhold their cash after the president expressed reservations over a controversial Internet anti-piracy bill.

Who ever would have guessed it would be Dodd, who during his 21-year-long career in Washington collected more than $48 million in campaign contributions, much of it from the financial industry he was supposed to be overseeing, who would cut through all the lies and palaver to deliver the knockout punch to our Citizens United-poisoned political system?

“Candidly, those who count on quote  `Hollywood’ for support need to understand that this industry is watching very carefully who's going to stand up for them when their job is at stake,” Dodd told Fox News. “Don't ask me to write a check for you when you think your job is at risk and then don't pay any attention to me when my job is at stake.”

But who better than Dodd to make clear what contributors expect for their cash.  He knows exactly how the system works, from both sides of the revolving door.

It was Dodd, after all, who made sure that AIG executives got their bonuses in 2009 while taxpayers were bailing out the firm at the heart of the subprime meltdown. It was no coincidence that AIG executives had showered Dodd with  $56,000 in contributions.

Nobody knows this terrain as well as Dodd.

He was a “friend of Angelo,” one of those elected officials who personally got sweet mortgage deals – at below market rates– from Angelo Mozilo, the head of the Countrywide, the mortgage company that nearly sank under the weight of its subprime trash loans until Bank of America rescued it. (His colleagues on the Senate Ethics Committee dismissed a complaint against him.)

While he and his colleague, Rep. Barney Frank (House Financial Services Committee?), oversaw the watering down of financial reform legislation in the wake of the financial crisis, Dodd played the role of beleaguered public servant, wringing his hands in frustration over the army of lobbyists against whom he was claimed he powerless.

But now that’s he moved from Washington to Hollywood, he’s got a new script that calls for tough, public, bare-knuckled threats to the president of the United States.

And whatever he owes the American public for his perfidy as an elected official, we owe him a debt of gratitude for it. Because he has exposed the political system and the money that dominates it for what it is.

As Dodd has illustrated so eloquently, the Supreme Court got it wrong in their infamous Citizens United decision, which allows corporations to dump unlimited, unreported cash into our political system.

Money is not free speech. I don’t know whether Bob Dylan had Congress in mind when he sang nearly 30 years ago, “Money doesn’t talk, it swears,” but he was prophetic.

The impact of money in politics has put a curse on our democracy, and it won’t be lifted until we throw the corporations and the billionaires’ money out.

As Dodd’s remarks demonstrate, big money campaign contributions are a blunt force instrument, which corporate interests and the wealthy can use to control the politicians who depend on them for their livelihoods, as Dodd did when he was playing the part of the distinguished U.S. senator.

Rest assured, the people who gave him $48 million knew his real role was so serve them, whatever lines he was required to utter for the scene he was playing at the time.

 

 

AIG / Citizens United / Congress / Executive Pay / Financial Crisis / Financial Reform Legislation / Martin Column - 02/01/2012

3 Steps Toward Real Economic Recovery

Democrats should be less worried less about Sarah Palin’s mangling of American history and more concerned about the Obama administration’s consistent underestimation of the recession since the financial collapse.

The president and his team has been downplaying the seriousness of the jobs and housing crises since they took office, repeatedly taking inadequate steps to address the twin fiascoes of foreclosure and unemployment, while wrongly conceding to Republicans that the political focus should be the short-term deficit.

This is not only bad for the country but bad politics for the Democrats, increasing the chances that voters will blame them for not fighting harder for programs to create jobs and straighten out the housing mess. Never mind that Republican efforts to address these issues amount to less than zero.

Nobody expects the president and his party to win every fight. But we do expect him not to wave the white flag before the fight starts.

Circumstances still offer the president opportunities to show that he finally gets it – and to signal a more aggressive approach.

First, the president can launch a fight for Elizabeth Warren to head the Consumer Financial Protection Agency. Warren is popular, articulate and sensible, and the agency was her idea in the first place. Of course the Republicans hate her, in fact they don’t want a single head of the agency. Republicans favor a committee to run the agency, the more easily for the banks to bamboozle it.

Second, he can replace his outgoing economic adviser, Austan  Goolsbee with somebody more tuned in to the jobs and housing crises. How bad was Goolsbee (and the administration’s economic policies he defended)?

Here’s how economist Firedoglake blogger Scarecrow put it after listening to Goolsbee Sunday, saying it was up to the private sector to create jobs now because government could do nothing: “If I’d been asleep for the last decade and woke up to ABC This Week’s interview of Presidential economic advisor Austan Goolsbee, I would assume that Mitt Romney won the 2008 election, that he was predictably following Republican dogma about how to recover from a severe financial collapse and recession...” Scarecrow wrote.

With Democrats like these, who needs Republicans?

Third, Obama can fire his Treasury secretary, Timothy Geithner, who has shamelessly pandered to his banker cronies while ignoring Main Street’s woes since he helped engineer the bailout as head of the New York Fed prior to the Obama administration.

Of course it will take more than gestures and a few appointments for the president to tackle the continuing severe economic challenges we face. But he can still saddle up and take a brave ride on the right side of history, if he chooses.

 

Consumer Financial Protection Agency / Martin Column / President Barack Obama - 06/06/2011

Real Fraud, Faux Enforcement

The number one question people ask me when they find out I write about the financial crisis is: “How come nobody has gone to jail?”

I think I have found an explanation. His name is Robert Khuzami and he works as chief of the Securities and Exchange Commission’s enforcement division.

He is not the literal reason. SEC enforcement is civil, not criminal. So he’s not responsible for putting people in prison.

But focusing on Khuzami puts into sharp focus the conflicts at the heart of the government’s efforts to regulate and hold accountable the big banks.

Khuzami is a former federal prosecutor. But he came to the SEC from a high-profile position he took after his stint as a lawman: he served as general counsel to Deutsch Bank, one of the world’s largest investment banks, which had a massive business in the securitized mortgage loans, and was the recipient of nearly $12 billion in “backdoor bailout” federal funds funneled through AIG.

The Wall Street Journal reported that Khuzami was the first SEC enforcement chief to come directly from a big bank. He is one in a long line of Obama economic appointments with strong ties to the financial industry, who either worked for the banks directly or in their interests by favoring deregulation that was one of the major causes of the economic collapse.

Now Khuzami’s former employer, Deutsch Bank, is in hot water with the feds, who sued the bank earlier this month alleging that the “bank committed fraud and padded its pockets with undeserved income as it repeatedly lied so it could benefit from a government program that insured mortgages,” Business Week reported.

For the SEC, it’s all kosher because its stringent recusal policy assures that Khuzami won’t work on any Deutsche Bank cases.

Remember that Khuzami was not just a guy punching a clock. He was the bank’s general counsel, so he supervised legal issues for the firm.

So here was a former federal prosecutor who, in the midst of the go-go real estate boom, apparently thought it was OK for his bank to commit mortgage fraud. Zero Hedge dug up his financial disclosure statement, which reveals he was compensated nearly $4 million in salary and bonuses between 2006 and 2009, and may lose money if Deutsche Bank suffers as a result of the government’s lawsuit.

The president and the SEC, knowing what kind of mischief the too big to fail banks were engaged in during the boom, and how Khuzami had profited from it, thought it was a terrific idea to appoint somebody like him to go after his former cronies.

Khuzami’s tenure at SEC has been marred by accusations that he gave two Citibank executives preferential treatment in agreeing to drop charges against them after he met secretly with their lawyer. In January, the SEC’s inspector general said it was investigating the matter.

Is there no one but former bankers available to work in the financial sector? The president, with $1 billion to raise to fund his reelection effort, has been unwilling to dig into the fraud at the heart of the financial collapse. Until he does, the economic recovery will be built on quicksand.

 

AIG / Martin Column / President Barack Obama / Securities and Exchange Commission (SEC) / Too Big To Fail - 05/11/2011

Around the Web: They Told Us So

The foreclosure robo-signing scandal may not have been making headlines until a month ago, but nobody should be surprised that it has finally erupted.

There have been warnings after warnings, all of them ignored by politicians, policy makers and the mainstream media.

Among those who have been ringing the alarm bells is Florida lawyer April Charney, with Jacksonville Area Legal Aid, who has traveled the country to train lawyers how to challenge foreclosures. In California, Walter Hackett, of Inland Empire Legal Services, has overseen a listserv for consumer attorneys representing borrowers facing foreclosure. Web sites like 4closurefraud.org have also been relentlessly focused on the issue.

Earlier this year, Mother Jones ran a stinging story, “Can Anyone Stop The Predatory Lenders?” detailing the misdeeds of mortgage servicers. Reporter Andy Kroll pointed out that the feds were basically paying the same shoddy characters who engineered the subprime crisis to fix the mess.

And Bloomberg’s Jonathan Weil cautions against taking comfort from the big bankers who are now trying to minimize the impact of the fiasco they created. “Three years ago, as the subprime mortgage crisis began to spiral, one of the lessons the public should have learned is that the leaders of these companies often have no idea what’s going on inside them,” Weil writes. “We may be witnessing the same phenomenon again. There’s no excuse this time for anyone to be surprised.”

Around the Web / Foreclosures / Martin Column - 10/21/2010