Wednesday, August 24, 2011

A Scandal Within a Scandal

New York Attorney General Eric Schneiderman has been unceremoniously kicked off the panel of state AGs negotiating a sweetheart deal with the big bank scammers over the robo-signing foreclosure fraud mess, because he wouldn't go along to get along.  He was being too mean to Wall Street, and throwing a monkey wrench in the works, as New York Fed member Kathryn Wylde so bluntly put it Monday.  He is insisting on treating the bankers as suspected criminals rather than the fine upstanding community parasites they are. (see my previous post).

The man doing the kicking was Iowa Attorney General Tom Miller, head of the 50-state panel investigating working with the banks on a simple settlement to make it all go away, quickly. Since the whitewash probe started last year, Miller's campaign war chest has received $261,445 in donations from the financial services industry -- 88 times the total of all contributions he had received in the past decade, according to findings of the National Institute on Money in State Politics.(NIMSP) 

Miller, a Democrat, was in the midst of a tough re-election battle as he took over the investigation -- and the out-of-state money began pouring in.  From the Des Moines Register:

Miller said the (NIMSP) report “is false or misleading from the start to the finish,” noting that almost all of the specific contributors listed in the report are not involved in the foreclosure irregularity issue.
Furthermore the report compares Miller’s campaign finances with other recent elections, including in 2006 when he ran unopposed. The comparison is unfair, he said.
“It’s riddled with misrepresentations and falsehoods,” Miller said. “But the main falsehood is that these people had vested interest in the investigation. None did except for two that give $15,000 and have been longtime friends of mine.”
So  -- only two of his pals compromised the investigation, thus ameliorating the whole conflict-of-interest miasma of corruption, huh?  This admission seemingly takes Miller's involvement well beyond the mere "appearance of impropriety."  The Dubuque Telegraph Herald certainly smelled a rat. From a May 1 editorial: 
Maybe Iowa Attorney General Tom Miller has done nothing wrong in accepting campaign donations from finance, insurance and real estate companies. But the appearance, at face value, of a conflict of interest is so strong, Miller has more explaining to do. Last fall, it was Miller who led the charge against Big Banks' improper foreclosure practices, but lately, he seems much more low-key about the pursuit of lenders who forced families out of their homes. A report published last week by the National Institute on Money in State Politics suggests one reason Miller has eased off the accelerator has to do with a war chest full of big donations.
This begs the question: who investigates a state attorney general, the chief law enforcement officer of the state, for possible corruption?  Eric Holder?  Don't hold your breath: if he's going after anyone, it's Schneiderman.  Besides, Tom Miller and Obama go way back.  He was instrumental in ensuring Barack's victory in the Iowa when he was still a relative unknown, saying in February 2007: "Endorsing a candidate this early is no ordinary occurrence in the Iowa caucuses - but Barack Obama is no ordinary candidate."  (little did we know then just how out of the ordinary).

Iowa AG Tom "Unconflicted" Miller
 Meanwhile, calls for the resignation of Kathryn Wylde for her own brand of conflict of interest have started popping up. There was that one demand from an activist group last March, (previous post), and now macroeconomic analyst Barry Ritholtz of The Big Picture is ramping it up, noting Wylde is supposed to be representing the public  from her seat on the New York Fed.  But, he writes, the fact that Wylde seems to think her job is defending Wall Street over the real victims of the mortgage debacle is not all that surprising and is merely paralleling the pro-bank stance of the Obama Administration:
I do not know if Ms. Wylde understands what her proper role should be, but clearly she is somewhat confused. She appears to be far more interested in representing the banks than the public.
Note that the Federal Reserve (and indirectly, the NY Fed) are conflicted players in this. On the one hand, they are supposed to be bank regulators (a task they have performed poorly). But they are also substantial investors in the banks, and their  regulatory oversight role is obviously conflicted.
There have been all manner of criminal and civil trespasses committed, and we should find out who ordered them, who committed them and why. AG Schneiderman should continue investigating the robo-signing, bring civil and criminal charges where necessary.
Recall that the original problems came about in large part due to Alan Greenspan’s Nonfeasance — the failure to perform his professional obligations of oversight and regulation. That any member of the Federal Reserve or NY Fed wants this closed before any investigation has been undertaken is a scandal of the highest magnitude.
Kathryn S. Wylde, and any other Fed member shirking their duties and committing nonfeasance should step down immediately.
Wylde is a very busy woman, with many fingers on the pulse (or in the pie) of New York. From her bio:

An internationally known expert in housing, economic development and urban policy, Wylde serves on a number of boards and advisory groups, including the Federal Reserve Bank of New York, the New York State Commission to Modernize the Regulation of Financial Services, the Mayor’s Sustainability Advisory Board, NYC Economic Development Corporation, The Legal Aid Society, NYC Leadership Academy, the Research Alliance for NYC Public Schools, the Manhattan Institute, the Biomedical Research Alliance of New York, and the Special Commission on the Future of NYS Courts.
Along with the Iowa attorney general, Wylde just does not see any conflict of interest. As she so blithely put it in an email to the Huffington Post in defending her defense of Wall Street, the banks she does not regulate "leave their institutional identities at the door and work with us on challenges facing the city and state."  (translation: buying off Gov. Andrew Cuomo via her "Committee to Save New York" lobbying cabal, getting him to dump the millionaires' surtax, leading to a budget deficit, leading to the announced layoffs today of over 700 teachers in New York City alone).

Appearance of impropriety or not, these Wall Street hacks and defenders of justice simply don't seem to care what we think.  Let them keep shooting their mouths off.  They're drowning in their own B.S.


Denis Neville said...

In Five Germanys I Have Known, Fritz Stern wrote about the extinction of America’s liberal spirit. With the extinction of that spirit, he noted, the death of the republic had begun. As a historian and a refugee from Nazi Germany, Stern spoke with authority.

Liberals used to be the canaries in the mineshaft of modern democracy. Today they are no more than useful idiots.

The pigs are all walking on their hind legs.

Anne Lavoie said...

On Sept 1, Nurses and others will be in action at Congressional Offices all over the country in support of a Financial Transaction Tax on Wall St.

For more info, go to

It sounds like a great idea to me.

Valerie said...

Oh, I am so angry I could spit! These scumbags don't even bother to hide their blatant conflict of interests. Just another reason NOT to vote for Obummer. Thanks for an excellent piece of journalism, Karen.

William said...

If anyone feels like cleansing the palate after eating our daily bowl of shit served to us by the venal villains of the world, I've got just the thing. Here's a pleasant and fascinating conversation between Matt Rothschild, editor of the Progressive magazine, and his good friend, John Nichols, author of "The 'S' Word: A Short History of an American Tradition...Socialism."

No need to download anything; just press the play button at the website and you're ready to go.

Valerie said...

Well, all I could do to comfort myself was write another letter to Eric Schneiderman thanking him for his courage and integrity. When I read stories like this, I really do think the game is over. If taxpayer dollars are used to bail out B of A or to help make their worthless assets look better - well, alert the TeaParty and get the word out! No more bailouts!

Denis Neville said...

“Word went round that from somewhere or other the pigs had acquired the money to buy themselves another case of whiskey…”

Bill Moyers tells the story of his grandmother who had married a drunk. Then “she was widowed, destitute and hardened. She vowed never again to marry a man who wouldn’t swear off the stuff. So she died still a widow almost fifty years later….she couldn’t compete with the booze. You and I can’t, either. Money is the liquor of politics. Our politicians are drunk from it. Without the shock of an intervention, you can’t expect them to recover. What form that intervention takes, I can’t predict…Meanwhile, don’t give your heart to any candidate who won’t swear off the booze.”

Or whiskey drinking pigs.

Read more Moyers’ words of wisdom from his interview with Robin Lindley at the History News Network:

Excerpts on Obama:

“Obama’s impotence is scary. In a stormy sea you want a sure hand on the helm. We don’t have one and we’re entering the roughest waters in decades. You don’t need me to tell you how prospects for working people and the middle class have darkened. There’s no one up there fighting for Americans whose wages are stagnating if they are even lucky enough to have a job, or for the middle class that’s being squeezed from all sides. The writer William Broyles…recently wrote that “A despair grips America, a cold fear that our best days are behind us, that we are adrift and powerless. Yes, the Republicans are to blame. But so is a president who treats core American values as bargaining chips, who won’t fight for anything, who refuses to lead.”

“Obama seems obsessed with wanting to lead the country in what he sees as a post-partisan era while his opponents are so partisan they have only one goal in mind - to destroy him even if they have to burn down the house to do it. Well, you may want with all your heart to save your marriage but if your philandering, uncaring, unredeemable, and narcissistic partner is determined at all costs to break up the marriage, the sooner you decide not to play the fool, the better.”

“(Sigh) My heart sank when I heard Obama’s response to Governor (Rick) Perry’s accusation that Ben Bernanke is “almost treasonous” as head of the Federal Reserve and would be treated “ugly” if he visited Texas. What did Obama say? “I’ll cut him [Perry] some slack” because he’s new to presidential politics. But Perry has been in politics as long as Obama. That was no unintentional remark on his part. I’m old enough, mind you, to remember the posters in Texas labeling John F. Kennedy a “traitor.” All Obama had to say was, “Let’s not call other Americans traitors because we don’t agree with their policies. I hope Governor Perry will help us keep this campaign on the high ground of what’s best for America in these tough times.” Instead he cuts him slack. Obama! When he does something like that - and he does it too often, unfortunately - I’m reminded of how one historian described Stephen Douglas, another Illinois politician, as a man “who refused on principle to stand on principle.”

“You have to wonder how a modern-day Eugene McCarthy or Robert Kennedy might shake things up. Both had challenged a sitting president of their own party over Vietnam, the defining issue of their time. Maybe that’s the kind of cuffing Obama needs to snap him out of it. But just the other day - the very day the president’s wealthy friends paid $35,000 a pop to have dinner with him here in New York - an acquaintance of mine received a solicitation by mail from the Obama campaign team asking for support on grounds that the president is not an extremist. I ask you: Where are we when one party is in the grip of a medieval mindset and the other touts its leader simply because he’s not foaming at the mouth?”

The good news is that Bill Moyers is returning in January with another weekly series!

Anne Lavoie said...

Warren Buffett today announced he is sinking $5 Billion in Bank of America. Didn't he meet with Obama just last week?

I don't suppose there is any connection between the two and with this whole scandal of letting B of A off the hook.

Obama can work out great deals when he wants to, and if they are for the right people. That would NOT be us.

Denis Neville said...

Matt Taibbi at Rolling Stone, “Obama Goes All Out For Dirty Banker Deal,” wonders if Barack Obama is this the most disappointing president we’ve ever had. Eric Schneiderman, the New York Attorney General, is the last cop they have to grease, and “reining in this last rogue cop is now an urgent priority for Obama.”

But not Dick Cheney. More on the fruits of elite immunity from Glenn Greenwald.

No investigations into Cheney’s chronic criminality by the Obama administration. Yet in 2009, President Obama's in a speech to the Ghanaian parliament, demanded that Africans apply "the rule of law, which ensures the equal administration of justice" and vowed "we will stand behind efforts to hold war criminals accountable." Just African war criminals, not our own war criminals. Hundreds of thousands of innocent men, women, and children dead from Cheney’s war of aggression, not to mention his worldwide torture regime. Rather than facing indictments and criminal juries, Cheney is embarking on a lucrative book tour. Will he be proven right about the invasion of Iraq and other global issues?

And all the sheep burst out into a tremendous bleating of “Four legs good, two legs better!” “Four legs good, two legs better!” “Four legs good, two legs better!” “Four legs good, two legs better!”

“One of the most pathetic aspects of human history is that every civilization expresses itself most pretentiously, compounds its partial and universal values most convincingly, and claims immortality for its finite existence at the very moment when the decay which leads to death has already begun.” - Reinhold Niebuhr, Beyond Tragedy

Kat said...

This is so incredibly depressing to me. Yesterday my local paper had a story on the courts being lenient on those with outstanding arrest warrants if they turned themselves in. They told the story of one young man who found out he had a warrant when he applied for a position at a downtown motel. He was worried about it and showed up on this day and was pictured smiling after the charges were dismissed. Oh-- what were the charges? A seat belt violation. Well, I'm glad he was happy, but it just enraged me. I have to figure the guy was pulled over and that was the best charge they could level at him. And then these charges proceed to make life difficult for him. What a frickin two tiered justice system.
I just read that Eric Schneiderman will not be backing down. You go!

Denis Neville said...

Corporate welfare and corporate looting…Our criminogenic political culture…More elite immunity

Elite banksters created the worst bubble in financial history by creating fraudulent nonprime loans that destroyed working class families' savings at a level never seen before in the history of white-collar crime. They are the entitled generation, entitled to their wealth with absolutely no responsibility nor accountability.

Yet these frauds go unpunished. No one has gone to prison. Why? Because President Obama, his administration, and his army of Squealers are protecting these sociopathic banksters.

William Black said, “The rule of law is at the heart of this fraud, and to allow it to go further is simply untenable.”

Eric Schneiderman, the New York Attorney General, is the last cop they have to grease, and “reining in this last rogue cop is now an urgent priority for Obama.”

Valerie said...

I just came across this profound quote by Albert Einstein, 1949.

“I have now reached the point where I indicate what to me constitutes the essence of the crisis of our time. The individual in society is such that the egotistical drives of his makeup are constantly accentuated whilst his social drives which are by nature weaker progressively deteriorate.”

This does not bode well for us, does it?