THE FIRST DAY OF OBAMA’S ADMINISTRATION HE WENT ABOUT BUILDING HIS ADMINISTRATION WITH ADVOCATES FOR OPEN BORDERS AND LA RAZA SUPREMACY, INCLUDING PUTTING FORMER MEXIFORNIA CONGRESSWOMAN (LA RAZA SUPREMACY PARTY) IN AS SEC. OF ILLEGAL LABOR. THEN OBAMA SURROUNDED HIMSELF WITH BUSH’S MOST CORRUPT WALL ST ADVISORS, INCLUDING BUSH’S ARCHITECT FOR NO-STRINGS BANKSTERS’ BAILOUTS, TIM GEITHNER.
THEN OBAMA MADE SURE TWO OF THE MOST BANKSTER-BOUGHT CORRUPT DEMS, CHRIS DODD AND BARNEY FRANK WERE BROUGHT IN TO MAKE SURE THERE WOULD BE NO REAL BANKSTER REFORM. WHAT LITTLE “REFORM” DID COME OUT OF IT THE BANKSTERS ARE NOW NEUTERING AS THEY PULL IN BILLIONS IN PROFITS!
NOT ONE CRIMINAL BANKSTER HAS GONE TO PRISON!
IN FACT, UNDER OBAMA, THINGS ARE LOOKING QUITE ROSY!
WHILE OBAMA WAS A SENATOR, THE BANKSTERS WERE TAKING MEASURES TO MAKE SURE THEIR TOXIC MORTGAGES COULD NOT BE EASILY REWOUND IN BANKRUPTCY COURTS. THEY USED ONE OF THE SENATE’S GREATEST WHORES, SEN. DIANNE FEINSTEIN TO FRONT THEIR “BANKSTERS’ BANKRUPTCY REFORM”, PUTTING BANKS ABOVE CONSUMER RIGHTS.
TWO OF BUSH’S WAR PROFITEER, DIANNE FEINSTEIN’S BIGGEST DONORS ARE BANK of AMERICA and WELLS FARGO (WHICH IS BANKSTERS TO THE MEXICAN DRUG CARTELS). AT THE TIME FEINSTEIN WAS SERVICING HER BANKSTERS, WELLS FARGO HAD ALREADY HAD THEIR CALIFORNIA MORTGAGE LICENSE REVOKED IN THE STATE OF CALIFORNIA FOR MORTGAGE FRAUD, AND CORPORATE MALFEISANCE. IN 2003 WELLS FARGO WENT INTO OPEN COURT DEMANDING THEIR CA MORTGAGE LICENSE BE REINSTATED. THE COURTS REFUSED! IT REMAINS REVOKED TO THIS DAY!
WELLS FARGO SIMPLY DECLARED ITSELF ABOVE STATE LAW, AND WHAT BANKS DON’T OPERATE ABOVE THE LAW? AND WENT ON MARKETING THEIR TOXIC MORTGAGES AROUND THE NATION, AND IN SO DOING CAUSING COMMUNITIES TO ULTIMATELY GO INTO MELTDOWN FROM IT!
FEINSTEIN’S PAYMASTERS AT BANK of AMERICAN and WELLS FARGO WERE ALSO MAKING HEFTY FEES HANDING LA RAZA ILLEGALS MORTGAGES BASED ON FRAUD DOCS, AND STOLEN SOCIAL SECURITY NUMBERS. THEN THE BANKS DUMPED THESE ON UNSUSPECTING INVESTORS, KNOWING IT WOULD BE THE TAX PAYERS THAT ULTIMATELY WOULD EAT IT AS ALWAYS.
FORECLOSURES ARE HIGHEST IN STATES WITH THE LARGEST NUMBER OF ILLEGALS. CA IS NOW HALF LA RAZA, NEVADA IS NOW ONE-THIRD ILLEGAL, ARIZONA HAS MILLIONS OF ILLEGALS!
FOLLOWING FEINSTEIN’S PUSH FOR “BANKSTER BOUGHT BANKRUPTCY REFORM, AND VOTING FOR THE BANKS WAS HILARY CLINTON, BARBARA BOXER, JOE BIDEN, AND VIRTUALLY THE ENTIRE LIST OF THE MOST CORRUPT DEMS IN CONGRESS. ALL ARE ALSO ADVOCATES FOR OPEN BORDERS, NO E-VERIFY, AND LA RAZA DREAM ACTS TO KEEP WAGES DEPRESSED AND THEIR CORPORATE PAYMASTERS HAPPY AND GENEROUS!
OBAMA DID NOT VOTE FOR THE “BANKRUPTCY REFORM”… AND EVEN STATED AS ONE OF HIS CAMPAIGN LIES AS HE DANCED HIS “CHANGE” TUNE TO A GUILABLE NATION, THAT HE WOULD RESTORE CONSUMERS’ RIGHTS AGAINST THE BANKSTER IN BANKRUPTCY COURTS!
IF OBAMA DOES ONE THING WELL OTHER THAN PERFORM AS A POPULIST, IT’S LIE AND GO LIMP WHEN HE’S TOLD BY HIS WALL ST PAYMASTERS.
OBAMA COULDN’T HAND THESE BANKSTER ANY AND ALL THEY WANTED FAST ENOUGH!!! HE HANDED OUT THEIR LOOTINGS WITH NO-STRINGS!
BOTH WELLS FARGO and BANK of AMERICA WERE HANDED NO-STRINGS WELFARE WHICH THEY TURNED AROUND AND BOUGHT OTHER BANKSTERS WITH! WELLS FARGO HAS MADE MASSIVE PROFITS IN FORECLOSURE FEES THEY CAUSED EVEN HAS COMMUNITIES NATIONWIDE PAY OFF THE STAGGERING COST OF FORECLOSURE MELTDOWNS.
OBAMA NEVER DID STAND UP TO THE BANKSTERS LIKE HE PROMISED, BUT THEN THIS IS THE CLOWN THAT LIED ABOUT OBAMAcare NOT INCLUDING ILLEGALS!!!
PROBABLY THE ONLY HONEST THING OBAMA HAS EVER SAID AS PRESIDENT WAS ON THE SENATE FLOOR, STATE of the UNION MESSAGE:
“I’m not here to punish banks!”
NO PRESIDENT IN HISTORY HAS TAKEN MORE BRIBES FROM BANKSTERS THAN OBAMA! WHEN ASKED IN AN INTERVIEW AT THE WHITE HOUSE WHY HE HAD NOT GONE AFTER THE BANKS, OBAMA QUICKLY BLAMED THE HOLDER DEPT. of JUSTICE FOR NOT DOING ANYTHING… THE SAME LA RAZA DEPT OF JUSTICE OBAMA HAS USED TO SUE FOUR STATES, SABOTAGE E-VERIFY TO HELP PUT ILLEGALS IN OUR JOBS, AND FIGHT AGAINST ILLEGALS HAVING TO PRODUCE NON-FRAUDULENT IDs BEFORE THEY VOTE!!! WE KNOW WHO HOLDER WORKS FOR JUST AS WE KNOW WHO OBAMA WORKS FOR… LA RAZA and the BANKSTERS!
DIANNE FEINSTEIN IS ONE THE MOST CORRUPT POLITICIANS IN AMERICAN HISTORY. SHE HAS HANDED OVER BIG CAMPAIGN BRIBES TO CORRUPT DEMS AROUND THE COUNTRY TO ASSURE THEIR COOPERATION IN SABOTAGING ANY SENATE ETHICS INVESTIGATIONS INTO HER CRIMES. FEINSTEIN AND BOXER HAVE VOTED AGAINST ANY AND ALL SENATE CORRUPTION REFORMS. FEINSTEIN’S BRIBES HAVE BEEN PAID OUT TO BOXER, CLINTON, KERRY, JOE LIEBERMAN, THE OTHER WAR WHORE, AND OF COURSE, BARACK OBAMA!
WE KNEW THERE WOULD BE NO “CHANGE” WHEN OBAMA HAD FEINSTEIN, BUSH’S WAR PROFITEER, GIVE HALF OF THE INAUGURAL ADDRESS WITH HER PIMP HUSBAND, RICHARD BLUM, SITTING RIGHT BEHIND OBAMA ON THE INAGURAL STAND.
FEINSTEIN, A LA RAZA ENDORSED ADVOCATE FOR OPEN BORDERS, AMNESTY, NO E-VERIFY, NO ENGLISH ONLY, NO I.D. REQUIRED OF ILLEGALS VOTING, HIRES ILLEGALS TO WORK CHEAP AT HER S.F. HOTEL, ONLY MILES FROM HER $16 MILLION DOLLAR WAR PROFITS MANSION.
FEINSTEIN’S LA RAZA PARTNER, NANCY PELOSI ALSO HAS LONG HIRED ILLEGALS TO WORK CHEAP AT HER ST. HELENA, NAPA WINERY. PELOSI ALSO LIED THROUGH HER TEETH ABOUT ILLEGALS NOT BEING PART OF OBAMACARE.
LA RAZA DEMS FEINSTEIN AND BOXER (WHO WAS REELECTED WITH THE VOTES OF ILLEGALS, AS HARRY REID WAS IN NEVADA), HAVE ON BEHALF OF THEIR BIG AG BIZ DONORS, PUSHED THREE (3) TIMES FOR A “SPECIAL AMNESTY” FOR 1.5 MILLION MEXICAN FARM SLAVE LABORERS, DESPITE THE FACT THAT ONE-THIRD OF ALL ILLEGAL FARM WORKERS END UP ON WELFARE.
FEINSTEIN’S STATE OF CA PAYS OUT $20 BILLION PER YEAR IN SOCIAL SERVICE COSTS TO LA RAZA!
DURING OBAMA’S FIRST TWO YEARS IN OFFICE, THE BANKS PULLED IN MORE PROFITS THAN THEY DID DURING ALL EIGHT YEARS UNDER BUSH.
FORECLOSURES ARE ALSO SOARING!
OBAMA, FEINSTEIN, BOXER, PELOSI AND REID HAVE ALL MADE JUDICIAL WATCH’S 10 MOST CORRUPT LIST! JUDICIAL WATCH.org
OBAMA’S CRONY CAPITALISM, A LOVE STORY BETWEEN THE ACTOR PRESIDENT, AND HIS BANKSTER DONORS!
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
NEW YORK TIMES
February 4, 2012
A Mortgage Tornado Warning, Unheeded
By GRETCHEN MORGENSON
YEARS before the housing bust — before all those home loans turned sour and millions of Americans faced foreclosure — a wealthy businessman in Florida set out to blow the whistle on the mortgage game.
His name is Nye Lavalle, and he first came to attention not in finance but in sports and advertising. He turned heads in marketing circles by correctly predicting that Nascar and figure skating would draw huge followings in the 1990s.
But after losing a family home to foreclosure, under what he thought were fishy circumstances, Mr. Lavalle, founder of a consulting firm called the Sports Marketing Group, began a new life as a mortgage sleuth. In 2003, when home prices were flying high, he compiled a dossier of improprieties on one of the giants of the business, Fannie Mae.
In hindsight, what he found looks like a blueprint of today’s foreclosure crisis. Even then, Mr. Lavalle discovered, some loan-servicing companies that worked for Fannie Mae routinely filed false foreclosure documents, not unlike the fraudulent paperwork that has since made “robo-signing” a household term. Even then, he found, the nation’s electronic mortgage registry was playing fast and loose with the law — something that courts have belatedly recognized, too.
You might wonder why Mr. Lavalle didn’t speak up. But he did. For two years, he corresponded with Fannie executives and lawyers. Fannie later hired a Washington law firm to investigate his claims. In May 2006, that firm, using some of Mr. Lavalle’s research, issued a confidential, 147-page report corroborating many of his findings.
And there, apparently, is where it ended. There is little evidence that Fannie Mae’s management or board ever took serious action. Known internally as O.C.J. Case No. 5595, in reference to the company’s Office of Corporate Justice, this 2006 report suggests just how deep, and how far back, our mortgage and foreclosure problems really go.
“It is axiomatic that the practice of submitting false pleadings and affidavits is unlawful,” said the report, a copy of which was obtained by The New York Times. “With his complaint, Mr. Lavalle has identified an issue that Fannie Mae needs to address promptly.”
What Fannie Mae knew about abusive foreclosure practices, and when it knew it, are crucial questions as Congress and the Obama administration weigh the future of the company and its cousin, Freddie Mac. These giants eventually blew themselves apart and, so far, they have cost taxpayers $150 billion. But before that, their size and reach — not only through their own businesses, but also through the vast amount of work they farm out to law firms and loan servicers — meant that Fannie and Freddie shaped the standards for the entire mortgage industry.
Almost all of the abuses that Mr. Lavalle began identifying in 2003 have since come to widespread attention. The revelations have roiled the mortgage industry and left Fannie, Freddie and big banks with potentially enormous legal liabilities. More worrying is that the kinds of problems that Mr. Lavalle flagged so long ago, and that Fannie apparently ignored, have evicted people from their homes through improper or fraudulent foreclosures.
Until a few weeks ago, Mr. Lavalle, 54, had never seen O.C.J. 5595. He had hoped to get a copy after helping Fannie’s lawyers, at Baker & Hostetler in Washington, complete it. He didn’t.
But after learning about its findings from a reporter for The Times, Mr. Lavalle said, “Fannie Mae, its directors, servicers and lawyers appeared to have an institutional policy of turning a willful blind eye to evidence of mortgage origination and servicing fraud.”
He went on: “When confronted directly with this evidence, Fannie not only failed to correct and remedy the abuses, it assisted in continuing the frauds via institutional practices that concealed fraudulent foreclosures.”
A spokesman for Fannie Mae said in a statement last week that the company quickly addressed several issues that were raised in the 2006 report and that it took action on other issues associated with foreclosures in 2010. “We want to prevent foreclosure whenever possible, but when foreclosures cannot be avoided they must move forward in a timely, appropriate fashion,” he said.
Fannie Mae would not say whether it had shared O.J.C. 5595 with its board of directors or its regulator, then known as the Office of Federal Housing Enterprise Oversight. James B. Lockhart III, who headed that regulator in 2006, said he did not recall reading the report. “I probably did not see it as back then foreclosures were not a very big deal,” he said.
But another report published last fall by the inspector general of the Federal Housing Finance Agency, the current regulator, briefly mentioned some of the problems that Mr. Lavalle had raised. (It didn’t mention him by name.) It also faulted Fannie Mae, saying it failed to address foreclosure improprieties that had surfaced years before.
LIKE most people, Nye Lavalle had little interest in the mortgage industry until things got personal. Raised in comfortable surroundings in Grosse Pointe, Mich., just outside Detroit, he began his business career in the 1970s, managing professional tennis players. In the 1980s, he ran SMG, a thriving consulting and research firm.
Then he tried to pay off a loan on a home his family had bought in Dallas in 1988. The balance was roughly $100,000, and the property was valued at about $175,000, Mr. Lavalle said. But when he combed through figures provided by his lender, Savings of America, he found substantial discrepancies in the accounting that had inflated his bill by $18,000. The loan servicer had repeatedly charged him late fees for payments he had made on time, as well as for unnecessary appraisals and force-placed hazard insurance, he said.
Mr. Lavalle refused to pay. The bank refused to bend. The balance rose as the bank tacked on lawyers’ fees and the loan was deemed delinquent. The fight continued after his mortgage was allegedly sold to EMC, a Bear Stearns unit.
Unlike most people, Mr. Lavalle had the time and money to fight. He persuaded his family to help him pay for a lawsuit against EMC and Bear Stearns. Seven years and a small fortune later, they lost the house in Dallas. Back then, judges weren’t as interested in mortgage practices as some are now, he said.
The experience lit a fire. Mr. Lavalle set out to learn everything he could about the mortgage industry. In a five-hour interview in Naples, Fla., last month, he described his travels nationwide. He dove into mortgage arcana, land records and court filings. By 1996, he had identified what appeared to be forged signatures on foreclosure documents, foreshadowing troubles to come. He took his findings to big players in the industry: Banc One, Bear Stearns, Countrywide Financial, Freddie Mac, JPMorgan, Washington Mutual and others. A few responded but later said his claims were not valid, he said.
Now he splits his time between Orlando and Boca Raton, advising lawyers as an expert witness. “From my own personal experience and 20 years of research and investigation, nothing — and I mean nothing — that a bank, lender, loan servicer or their lawyer says or puts on paper can be trusted and accepted as true,” Mr. Lavalle said.
FANNIE MAE, now in government hands, has acknowledged how abusive foreclosure practices can hurt its own business. “The failure of our servicers or a law firm to apply prudent and effective process controls and to comply with legal and other requirements in the foreclosure process poses operational, reputational and legal risks for us,” it said in a 2010 filing with the Securities and Exchange Commission.
Five years earlier, Fannie seemed to have taken a different view. That was when Mr. Lavalle pointed out legal lapses by some of its representatives. Among them was the law offices of David J. Stern, in Plantation, Fla., which was handling an astonishing 75,000 foreclosure cases a year — more than 200 a day. In 2005, Mr. Lavalle warned Fannie Mae that some judges had ruled that the Stern firm was submitting “sham pleadings.” Nonetheless, Fannie continued to do business with the firm until it closed its doors last year, after evidence emerged of rampant forgeries and fraudulent filings.
O.C.J. Case No. 5595 found that Stern wasn’t the only firm working for Fannie that seemed to be cutting corners. It also found that lawyers operating in seven other states — Connecticut, Georgia, New York, Illinois, Louisiana, Kentucky and Ohio — had made false filings in connection with work for Fannie Mae or the Mortgage Electronic Registration System, or MERS, a private mortgage registry Fannie helped establish in 1995.
“While Fannie Mae officials do not have a single opinion, some officials believe foreclosure counsel are sacrificing accuracy for speed,” the report said.
The lawyers at Baker & Hostetler did not agree with everything Mr. Lavalle said. Mark A. Cymrot, a partner who led the investigation, discounted Mr. Lavalle’s fear that Fannie could lose billions if large numbers of foreclosures had to be unwound as a result of misconduct by its lawyers and servicers.
Even so, the report didn’t conclude that Mr. Lavalle was wrong on the legal issues. It simply said that few people would have the financial resources to challenge foreclosures. In other words, few people would be like Mr. Lavalle.
“Courts are unlikely to unwind foreclosures unless borrowers can demonstrate that the foreclosure would not have gone forward with the correct pleadings, which is a difficult burden for most borrowers to meet,” the report said. “Nevertheless, the issues Mr. Lavalle raises should be addressed promptly in order to mitigate the risk of exposure to lawsuits and some degree of liability.” Mr. Cymrot declined to comment for this article.
O.C.J. 5595 also questioned Mr. Lavalle’s contention that improprieties by loan servicers were pervasive. But based on interviews with 30 Fannie employees, the report conceded that the company had no mechanism to ensure that servicers were charging borrowers appropriate fees.
Other oversight at Fannie was similarly lacking, the Baker & Hostetler lawyers found. For instance, when Fannie identified fraud by a lender or servicer, it didn’t notify the homeowner. Nor did it police activities of lawyers or servicers it hired. As a result, the report said, Fannie might not be insulated from liability for their misconduct.
Lewis D. Lowenfels, a securities law expert, said he was perplexed that Fannie’s board appeared to have done nothing to correct these practices. “If it had been brought to the board’s attention that specific acts of illegality were being committed, it should have directed that relationships with the transgressors be terminated forthwith and Fannie Mae’s regulator be advised accordingly,” he said.
Daniel H. Mudd, Fannie’s chief executive at the time, declined to comment through his lawyer. Mr. Mudd was recently sued by the S.E.C., accused of failing to disclose Fannie’s participation in the subprime mortgage market.
PERHAPS no development has done more to obscure the forces behind the foreclosure epidemic than the rise of the MERS, the private registry that has all but replaced public land ownership records. Created by Fannie, Freddie and big banks, MERS claims to hold title to roughly half the nation’s home mortgages. Judges and lawmakers have questioned MERS’s legal authority to initiate foreclosures, and some judges have thrown out foreclosures brought in its name. On Friday, New York’s attorney general sued MERS, contending that its system led to fraudulent foreclosure filings. MERS refuted the claims and said it would fight.
Mr. Lavalle warned Fannie years ago that MERS couldn’t legally foreclose because it didn’t actually own notes underlying properties.
The report agreed. MERS’s approach of letting loan servicers foreclose in its own name, not in that of institutions owning the notes, “is not accepted legal practice in all states,” the report said. Moreover, “MERS’s counsel conceded false allegations are routinely made, and the practice should be ‘modified.’ ”
It continued: “To our knowledge, MERS has not addressed the issue of its counsels’ repeated false statements to the courts.”
Janis L. Smith, a spokeswoman for MERS, said it had not seen the Baker & Hostetler report and declined comment on its references to the false statements made on its behalf to the courts. She said that MERS’s business model is legal in all states and that as a nominee, it has the right to foreclose. MERS stopped allowing its members to foreclose in its name in all states in 2011.
Robert D. Drain, a federal bankruptcy judge in the Southern District of New York, said in court last month that the failure of the mortgage industry to deal with pervasive problems involving inaccurate documentation and improper court filings amounted to “the greatest failure of lawyering in the last 50 years.”
In an interview last week, Judge Drain said several practices have contributed to the foreclosure mess. One is that Fannie and the rest of the industry failed to ensure that MERS was operating legally in all states. Another is that the industry failed to perform due diligence on documentation.
MERS no longer participates in foreclosures. But a lot of damage has already been done, Mr. Lavalle said.
“Hundreds of thousands of foreclosures in Florida and across America were knowingly conducted unlawfully, for which there are still severe liabilities and implications to come for many years,” he said.
THERE was a time when Americans had mortgage-burning parties: When they paid off a promisory note, they celebrated by burning the release of the lien.
But they kept the canceled promissory note — and there was a reason for that. Promissory notes, like dollar bills, are negotiable currency. Whoever holds them can essentially claim them.
According to O.C.J. Case No. 5595, Fannie held roughly two million mortgage notes in its offices in Herndon, Va., in 2005 — a fraction of the 15 million loans it actually owned or guaranteed. Who had the rest? Various third parties.
At that time, Fannie typically destroyed 40 percent of the notes once the mortgages were paid off. It returned the rest to the respective lenders, only without marking the notes as canceled.
Mr. Lavalle and the internal report raised concerns that Fannie wasn’t taking enough care in handling these documents. The company lacked a centralized system for reporting lost notes, for instance. Nor did custodians or loan servicers that held notes on its behalf report missing notes to homeowners.
The potential for mayhem, the report said, was serious. Anyone who gains control of a note can, in theory, try to force the borrower to pay it, even if it has already been paid. In such a case, “the borrower would have the expensive and unenviable task of trying to collect from the custodian that was negligent in losing the note, from the servicer that accepted payments, or from others responsible for the predicament,” the report stated. Mr. Lavalle suggested that Fannie return the paid notes to borrowers after stamping them “canceled.” Impractical, the 2006 report said.
This leaves open the possibility that someone might try to force homeowners to pay the same mortgage twice. Or that loans could be improperly pledged as collateral by some other institution, even though the loans have been paid, Mr. Lavalle said. Indeed, there have been instances in the foreclosure crisis when two different institutions laid claim to the same mortgage note.
In its statement last week, Fannie said it quickly addressed questions of lost note affidavits and issued guidance to servicers that no judicial foreclosures be conducted in MERS’s name. It also said it instructed Florida foreclosure lawyers “to use specific language to assure no confusion over the identity of the ‘owner’ and the ’holder’ of the note.”
The 2006 report said Mr. Lavalle at times came across as over the top, that he was, in its words, “partial to extreme analogies that undermine his credibility.” Knowing what we know now, he looks more like one of the financial Cassandras of our time — a man whose prescient warnings went unheeded.
Now, he hopes dubious mortgage practices will be eradicated.
“Any attorney general, lawyer, bank director, judge, regulator or member of Congress who does not open their eyes to the abuse, ask pertinent questions and allow proper investigation and discovery,” he said, “is only assisting in the concealment of what may be the fraud of our lifetime.”
*Obama's Wall Street cabinet
6 April 2009
A series of articles published over the weekend, based on financial disclosure reports released by the Obama administration last Friday concerning top White House officials, documents the extent to which the administration, in both its personnel and policies, is a political instrument of Wall Street.
Policies that are extraordinarily favorable to the financial elite that were put in place over the past month by the Obama administration have fed a surge in share values on Wall Street. These include the scheme to use hundreds of billions of dollars in public funds to pay hedge funds to buy up the banks’ toxic assets at inflated prices, the Auto Task Force’s rejection of the recovery plans of Chrysler and General Motors and its demand for even more brutal layoffs, wage cuts and attacks on workers’ health benefits and pensions, and the decision by the Financial Accounting Standards Board (FASB) to weaken “mark-to-market” accounting rules and permit banks to inflate the value of their toxic assets.
At the same time, Obama has campaigned against restrictions on bonuses paid to executives at insurance giant American International Group (AIG) and other bailed-out firms, and repeatedly assured Wall Street that he will slash social spending, including Medicare, Medicaid and Social Security.
The new financial disclosures reveal that top Obama advisors directly involved in setting these policies have received millions from Wall Street firms, including those that have received huge taxpayer bailouts.
The case of Lawrence Summers, director of the National Economic Council and Obama’s top economic adviser, highlights the politically incestuous character of relations between the Obama administration and the American financial elite.
Last year, Summers pocketed $5 million as a managing director of D.E. Shaw, one of the biggest hedge funds in the world, and another $2.7 million for speeches delivered to Wall Street firms that have received government bailout money. This includes $45,000 from Citigroup and $67,500 each from JPMorgan Chase and the now-liquidated Lehman Brothers.
For a speech to Goldman Sachs executives, Summers walked away with $135,000. This is substantially more than double the earnings for an entire year of high-seniority auto workers, who have been pilloried by the Obama administration and the media for their supposedly exorbitant and “unsustainable” wages.
Alluding diplomatically to the flagrant conflict of interest revealed by these disclosures, the New York Times noted on Saturday: “Mr. Summers, the director of the National Economic Council, wields important influence over Mr. Obama’s policy decisions for the troubled financial industry, including firms from which he recently received payments.”
Summers was a leading advocate of banking deregulation. As treasury secretary in the second Clinton administration, he oversaw the lifting of basic financial regulations dating from the 1930s. The Times article notes that among his current responsibilities is deciding “whether—and how—to tighten regulation of hedge funds.”
Summers is not an exception. He is rather typical of the Wall Street insiders who comprise a cabinet and White House team that is filled with multi-millionaires, presided over by a president who parlayed his own political career into a multi-million-dollar fortune.
Michael Froman, deputy national security adviser for international economic affairs, worked for Citigroup and received more than $7.4 million from the bank from January of 2008 until he entered the Obama administration this year. This included a $2.25 million year-end bonus handed him this past January, within weeks of his joining the Obama administration.
Citigroup has thus far been the beneficiary of $45 billion in cash and over $300 billion in government guarantees of its bad debts.
David Axelrod, the Obama campaign’s top strategist and now senior adviser to the president, was paid $1.55 million last year from two consulting firms he controls. He has agreed to buyouts that will garner him another $3 million over the next five years. His disclosure claims personal assets of between $7 and $10 million.
Obama’s deputy national security adviser, Thomas E. Donilon, was paid $3.9 million by a Washington law firm whose major clients include Citigroup, Goldman Sachs and the private equity firm Apollo Management.
Louis Caldera, director of the White House Military Office, made $227,155 last year from IndyMac Bancorp, the California bank that heavily promoted subprime mortgages. It collapsed last summer and was placed under federal receivership.
The presence of multi-millionaire Wall Street insiders extends to second- and third-tier positions in the Obama administration as well. David Stevens, who has been tapped by Obama to head the Federal Housing Administration, is the president and chief operating officer of Long and Foster Cos., a real estate brokerage firm. From 1999 to 2005, Stevens served as a top executive for Freddie Mac, the federally-backed mortgage lending giant that was bailed out and seized by federal regulators in September.
Neal Wolin, Obama’s selection for deputy counsel to the president for economic policy, is a top executive at the insurance giant Hartford Financial Services, where his salary was $4.5 million.
Obama’s Auto Task Force has as its top advisers two investment bankers with a long resume in corporate downsizing and asset-stripping.
It is not new for leading figures from finance to be named to high posts in a US administration. However, there has traditionally been an effort to demonstrate a degree of independence from Wall Street in the selection of cabinet officials and high-ranking presidential aides, often through the appointment of figures from academia or the public sector. In previous decades, moreover, representatives of the corporate elite were more likely to come from industry than from finance.
In the Obama administration such considerations have largely been abandoned.
This will not come as a surprise to those who critically followed Obama’s election campaign. While he postured before the electorate as a critic of the war in Iraq and a quasi-populist force for “change,” he was from the first heavily dependent on the financial and political backing of powerful financiers in Chicago. Banks, hedge funds and other financial firms lavishly backed his presidential bid, giving him considerably more than they gave to his Republican opponent, Senator John McCain.
Alongside Wall Street, the Obama cabinet is dominated by the military, including three recently retired four-star military officers: former Marine General James Jones as national security adviser; Admiral Dennis Blair as director of national intelligence, and former Army Chief of Staff Erik Shinseki as secretary of veterans’ affairs.
These are the deeply reactionary political and class interests that are represented by the Obama administration.
Friday’s financial disclosures further expose the bankruptcy of American democracy. Elections have no real effect on government policy, which is determined by the interests of the financial aristocracy that dominates both political parties. The working class can fight for its own interests—for jobs, decent living standards, health care, education, housing and an end to war—only through a break with the two parties of American capitalism and the development of a mass, independent socialist movement.
Tom Eley and Barry Grey
Obama’s Economic Advisers: International Socialists, Union Thugs, NBC Execs, Soros Scholars, Subprime Lenders, Amnesty Shills, and Campaign Cronies
Posted on February 24, 2011 by Ben Johnson
Article Link:GET THIS BOOK!
Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses
BY TIMOTHY P CARNEY
Obama Is Making You Poorer—But Who’s Getting Rich?
Goldman Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack Obama was supposed to chase from the temple—are profiting handsomely from Obama’s Big Government policies that crush taxpayers, small businesses, and consumers. In Obamanomics, investigative reporter Timothy P. Carney digs up the dirt the mainstream media ignores and the White House wishes you wouldn’t see. Rather than Hope and Change, Obama is delivering corporate socialism to America, all while claiming he’s battling corporate America. It’s corporate welfare and regulatory robbery—it’s Obamanomics.
*Obama Is Making You Poorer—But Who’s Getting Rich?
Goldman Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack Obama was supposed to chase from the temple—are profiting handsomely from Obama’s Big Government policies that crush taxpayers, small businesses, and consumers.
WHAT DID THE BANKSTERS KNOW ABOUT OUR ACTOR OBAMA THAT WE DIDN’T KNOW?
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
BARACK OBAMA HAS COLLECTED NEARLY TWICE AS MUCH MONEY AS JOHN McCAIN
BY DAVID SALTONSTALL
DAILY NEWS SENIOR CORRESPONDENT
July 1st 2008
Wall Street firms have chipped in more than $9 million to Barack Obama. Zurga/Bloomberg
Wall Street is investing heavily in Barack Obama.
Although the Democratic presidential hopeful has vowed to raise capital gains and corporate taxes, financial industry bigs have contributed almost twice as much to Obama as to GOP rival John McCain, a Daily News analysis of campaign records shows.
“The administration has been pushing hard for a settlement among state attorneys general, the nation's five largest mortgage servicers — Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. — and certain federal agencies.”
OBAMA’S CRONY CAPITALISM, A LOVE STORY BETWEEN THE ACTOR PRESIDENT, AND HIS BANKSTER DONORS!
Records show that four out of Obama's top five contributors are employees of financial industry giants -Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).