Barney Frank Viciously Attacks a Fellow Democrat: How TARP Still Hangs Over Our Politics

Matt Stoller is a fellow at the Roosevelt Institute. You can follow him at

Barney frank threw a little noticed temper tantrum in early August, intervening in a California Democratic primary between two incumbents, Brad Sherman and Howard Berman. Every ten years, lines for Congressional districts are redrawn, which sometimes throws sitting Congressmen into the same district. This is the case with Berman and Sherman, who hilariously sound alike and both have a similar hawkish posture on Israel. Berman chairs the Foreign Relations Committee, and is a part of Democratic leadership. Sherman is a very senior member of the Financial Services Committee, and is generally seen as an iconoclast. The support of someone like Barney Frank can make a difference in such a primary, so his bitter attacks on Sherman suggest something more than your standard pique is at work here.

Frank, never one to mince words, said while he’d already endorsed Berman in the race, he’d planned on staying mostly uninvolved until Sherman claimed that he’d “had more to do with” the Dodd-Frank bill to regulate Wall Street “than anyone except Dodd and Frank,” and that he’d forced a major change in the Troubled Asset Relief Program.

The former Financial Services Committee chairman and author of the Dodd-Frank scoffed at both claims.

“They are both appallingly off the mark, they are fantasies. I am a great admirer of Howard Berman. I am not an admirer of Brad Sherman’s approach, I think it’s superficial and headline-hunting,” he said Tuesday afternoon. “This is unfortunately what he does — makes things up to enhance his role, and there’s no basis for it.”

Frank pointed out that Sherman had voted against TARP both times when it came on the House floor, and said he’d had little to do with the Wall Street reform regulation.

Sherman replied with a statement, arguing that this is really about Frank’s support for the bailouts in 2008, and Sherman’s opposition to them. What, exactly, happened? The backstory is that Barney and Sherman have been tussling over bailouts since 2008. Sherman is a bit of an accounting nerd, and a loner, while Barney is a pack animal who values loyalty to the Democratic leadership and its backers in the financial services industry. In 2008, while the financial system was lurching from crash to crash, Sherman led what was known as the bipartisan “skeptic’s caucus”. This was a group that successfully voted down the legislation, in a move that sent the stock market plummeting. The bill was then sent to the Senate, which passed it, and then back to the House, which, because of Obama’s intervention, then passed the bailout. Barney whipped hard for TARP, while Sherman sought to stop it and impose a set of different policies. Here’s a letter sent by Sherman convening Democratic opposition to TARP.

Democratic MEMBERS Meeting on Bailout Plan, TODAY, Room 2220, 2:30-3:30pm
From: The Honorable Brad Sherman
Date: 9/22/2008
Skeptical About the
Administration’s $700 Billion Bailout Plan?
Democratic Members Meeting
Room 2220
2:30-3:30 P.M.

Dear Democratic Colleague:

Are you skeptical about the $700 billion bailout bill? Let’s meet in Room 2220 on Monday, September 22, 2008 at 2:30 PM. Come to the first and perhaps only meeting of the Skeptics Caucus to discuss President Bush’s $700 billion bailout bill. Democratic Members and Senior Staff only.

Bring specific legislative proposals. I will be bringing legislative proposals to carry out the principles set forth in the letter below. If you have questions about this meeting, please contact me or my Legislative Director and Counsel, Gary Goldberg, at xyz.


Brad Sherman
Member of Congress

September 22, 2008
Dear Democratic Colleague:

Bush/Paulson tell us immediate action is necessary, but demand action only on their terms. If speed is necessary, Bush should agree to include Democratic priorities in any new financial rescue plan legislation.

Foreign Investment: Under the Bush proposal, the U.S. banks that get hundreds of billions are free to invest these dollars overseas. We should require that any taxpayer bailout monies are invested in America.

Foreign investors: At first glance, the Bush proposal calls for bailout payments only to banks headquartered in the United States. I agree that foreign investors should be bailed out by their own central banks and governments. However, the statutory language is loophole ridden. Under the Bush proposal, foreign banks can simply sell their mortgage assets to US banks, knowing that the US banks will then unload them on the US government. The bill should be limited to mortgage related assets owned by American investors on! September 20th, and “American investor” does not include the US subsidiary of a foreign headquartered bank.

Regulatory, Corporate Governance, and Executive Compensation Reform: The Bush proposal will provide zero Regulatory Reform, zero Corporate Governance Reform, and no limits on executive compensation at firms receiving the bailout. Secretary Paulson suggests we defer these issues until next year – knowing full well that next year Wall Street lobbying and Republican Senate filibusters will prevent the passage of meaningful reform. Our only opportunity to pass meaningful reform is now. An alternative is to provide for fast track throughout the 111th Congress for all bills dealing with regulatory reform, corporate governance reform, and executive compensation limitation.

Help for Homeowners: In July, the Bush administration finally agreed to provide roughly $3 billion in help for homeowners, and then only as part of a bill the Administration desperately wanted. Now they want more than $700 billion for Wall Street, and nothing additional for homeowners.

High Fees Payable to Wall Street: The Bush proposal allows the Administration to pay unlimited fees to some Wall Street firms to manage the bad loans purchased from the other Wall Street firms.

Tax Reform: The Bush proposal transfers hundreds of billions to the wealthiest. Shouldn’t we consider rolling back some of the Bush tax cuts for the top 1%?

GAO Supervision: Secretary of the Treasury shall enter into no contracts or purchase agreements unless determined by the Comptroller General (head of the GAO), that such contract, agreement, or purchase is in the interest of the United States. Asset purchase agreements of less than $1 billion, and service contracts providing for fees of less than $10 million, are exempt from this requirement.

We should quickly put a bill on the President’s desk that protects working families.


Brad Sherman
Member of Congress

Sherman ended up losing this fight, but that’s not the same thing as saying he wasn’t influential. He was. Very. And Sherman remained a thorn in the pro-bailout forces led by Barney, throughout the drafting of Dodd-Frank. Another example of this was the initial formation of what would become Dodd-Frank.

In 2009, Treasury presented a draft bill to the Financial Services Committee, that would involve derivatives regulation and create the legal authority to resolve large systemically significant financial services companies. The bill had clearly been drafted by bank-friendly advocates at Treasury and the Fed, and most House Democrats thought at the time that the bailout policies were misguided. Relations with the White House were bad. The bill had absurd provisions in it, like that there would be a list of systemically significant financial institutions, but the list would be secret, known only to regulators and the big banks themselves. Or there were vaguely defined terms for bridge financing, and many other obvious loopholes for more bailout money.

Most of these were eliminated. Because while Sherman did not have a lot of language in the bill itself, he did have substantial influence on how Dodd-Frank was shaped. In one of the very first internal caucuses, just after Geithner had blundered in his initial roll-out of his plans to stabilize the banking system, Treasury presented its initial draft of what would become Dodd-Frank to the Democrats and their staffers on the Financial Services Committee. The White House made sure then Chief of Staff Rahm Emanuel – who had just left the House Democratic leadership and so was known to the assembled members as a former colleague – was babysitting Geithner, and so Rahm, Geithner, and Frank presented this plan to a very skeptical group of Financial Services Democrats.

At one point, Rahm said to the assembled group, “If you pass this bill, you’ll never have to vote on another bailout again.” It was Brad Sherman who responded by saying that fiscal matters were Constitutionally part of Congress’s mandate, and so if there were bailouts, Congress should be voting for or against them. Barney hated what Sherman had to say. Barney had been angry he had to whip for TARP, he thought anyone who didn’t support TARP was stupid, and he generally was appalled at a process in which open and public debate could disrupt the capital markets.

The original intent of Dodd-Frank was to grant power to Treasury to offer unlimited bailouts without having to vote. There were provisions in the original draft for bridge funding, and other games to allow the Federal regulators and/or Treasury itself to take fiscal measures without Congressional approval. Sherman systematically went through them and raised objections, sometimes successful and sometimes not. Much of the debate over Dodd-Frank on the House side took place in relatively obscurity, since the health care fight was in the headlines at the time. It was only later, when the Senate took up the bill, that the public took notice. But there was continuity of support for TARP, for HERA (the bazooka bill to bailout Fannie/Freddie), and Dodd-Frank on the House side, and it mattered. So did Sherman’s opposition. Barney doesn’t forget.

So it’s payback time.

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About Matt Stoller

From 2011-2012, Matt was a fellow at the Roosevelt Institute. He contributed to Politico, Alternet, Salon, The Nation and Reuters, focusing on the intersection of foreclosures, the financial system, and political corruption. In 2012, he starred in “Brand X with Russell Brand” on the FX network, and was a writer and consultant for the show. He has also produced for MSNBC’s The Dylan Ratigan Show. From 2009-2010, he worked as Senior Policy Advisor for Congressman Alan Grayson. You can follow him on Twitter at @matthewstoller.


  1. steve from virginia

    One would wonder what our grandchildren will think about this nonsense between Barney Frank, the Bush White House, Geithner, Sherman, Bair, Paulson and the rest.

    On the other hand, our grandchildren will be too busy hunting us down like animals or murdering us in our beds …

    1. rotter

      Wow, betraying the american people on behalf of the finance oligarchy makes them feel soooo good that its almost sexual. They all look like they are on MDMA and cocaine and nancy looks like shes giving the ol’ ben wa’s a squeeze on top of that.

  2. ltr

    Barney Frank is always smilingly vicious and always supremely selfish, so no surprisae here but sadness. I am only glad Frank will be gone gone, gone from Congress.

    1. charles sereno

      “As Chicago Mayor Harold Washington said of the corrupt former Mayor Daley, “I’m not glad he’s dead, but I’m glad he’s gone.”” (Richard Stallman on Steve Jobs) Happy retirement, Barney.

  3. Paul Tioxon

    It’s good to see in the light of day the effects of political opposition is prenventing if not enacting political objectives. Sherman clearly fought for a better, if not optimal by the idealistic standards of NC, legislation. It is unfortunate that the nuanced analysis of politics is not as evident as the the nuanced deconstruction of finance. But this is a good start. Politics is NOT business. More than insinuating itself in a clever manner, business has battered the nation state system into submission, to the geo-political concern of politicians, military and humanist intellectuals. The battle for the continued survival of a social order predicated on the consent of willingly governed citizens over a new world order of government by market mechanisms for debt and money, is not going well.

    Despite the prevailing decadent attitude of willful denial of any difference what so ever between political candidates, the crowning of a revolutionary investment banker as the commander in chief of the military and head of state is a difference so large as not to be denied. To capitualte in the face of this choice is to admit nihilistic failure, to desire anihilation and be happy in in making world weary knowing bon mots. Quelle surprise!!

    As Stoller labors to point out, but not in a fear and loathing and sickness unto death nausea inducing attack against arch radicals everywhere, without winning even a battle, political opposition can have a history making consequence, even if you go nameless in the shadows of media coverage. Political opposition, even within the very same party, at least by name, between Dems!!! Another Quelle!! Standard political campaingning regularly comes from very old, well worn playbooks. All the back to “THE PRINCE’ by Old Nick. You must be a young (FILL IN THE BLANK) for change. You must be the new (FILL IN THE BLANK) for reform. Young and new for change and reform, you must offer hope. You may have heard in last night’s speech that good and can still triumph over evil. Yves and McCain on the same page here. The failures need to be replaced with success. The lies must be banished with the truth. What, you expected to hear that you are permanently relegated to menial labor with a standard of living commensurate with the whims of the wealthy and powerful? “SLAVERY FOR ALL” is not a good slogan to get you elected or aid a long tenured sinecure within the poltical elite.


  4. Hugh

    Dodd and Frank competed as to who was the biggest whore for the banks and Wall Street in Congress. I always considered it a toss up. The Dodd-Frank bill was Potemkin reform. It missed all the major points (like a return of Glass-Steagall) and what little it purported to do was deferred to later rule making where it could be delayed and rewritten by the banking industry. So while Sherman was not as culpable as Frank, he was still participating in and treating as serious an excercise that was a farce.

    What we need to keep in mind with Frank, Sherman, and Berman is that there are no white hats here. Every Democrat, just like every Republican, in Congress works for the 1%. They often disagree with each other, but their work product is always anti-99%.

  5. Garrett Pace

    “At one point, Rahm said to the assembled group, “If you pass this bill, you’ll never have to vote on another bailout again.” It was Brad Sherman who responded by saying that fiscal matters were Constitutionally part of Congress’s mandate, and so if there were bailouts, Congress should be voting for or against them.”

    WOW. What’s the source on that?

  6. Susan the other

    Thank you. Interesting account of those days. It explains why Paulson and Bernanke’s appearance bef the Senate Banking Committee was so understated and bizarre. Letting even a tiny bit of truth hit the wires threatened a defeat so enormous for the USA it was unthinkable. Never tell the people. It is also a tribute to our near-total control of not just information, but the presentation of information. And to think this whole mess was caused by bankster fraud and incompetence and a world so full of crap (products) – both financial and manufactured – it amounted to nothing more that one big risky contradiction. The worst part is that it is still going on.

  7. different clue

    I gather from all this that Matt Stoller feels that one Democratic politician can make a particular difference on a particular subject in a particular setting as against another.

    Is he prepared to think about the possibility of such a difference existing between Hillary Clinton and Barack Obama? If not, why not? If so, shouldn’t he say so in the few days remaining before DemCon 2012 so as to sway his fanbase towards the cause of purging Obama off the 2012 ticket and putting the actual winner of the 2008 nomination
    in the place she actually earned before the massive Shitocrat Leader fraud which installed Obama in her place?
    There is still time to purge Obama from the ticket and begin the process of exterminating the Yersinia Obamapestis Shitocrats from the party.

    1. LucyLulu

      What has been happening in the GOP party clearly shows that factions within parties can have an influence. Look at the effect the Tea Party members had on debt ceiling negotiations and general legislative gridlock. “Severely conservative” factions have also pushed Romney to adopt positions farther to the right than he’s traditionally supported. Apparently Sherman wasn’t able to muster up enough support to gain traction.

      My understanding is that few members of Congress understand the world of finance or could tell you what a CDS or a MBS is. Even not all on the Financial Services Committee are necessarily financially fluent. So when Paulson and Bush approached Congress with their meme of “tanks in the streets” absent a bailout, they had little choice but to accept on faith that they were being told the truth. Not that most wouldn’t have been already biased towards helping the banks anyways….. esp. those on the Financial Services Committee. The biggest banking whores in Congress served on that committee. Schumer is another one that turns my stomach.

    2. LucyLulu

      Different clue,
      I don’t believe most NC readers would find Clinton a significant improvement over Obama. Personally, I have a lot of respect for Hilary, she’s done a fabulous job of implementing Obama’s foreign policy, and is obviously very talented. However, her husband was/is a corrupt politician who signed the deregulating legislation that set the GFC in motion, and I think Hilary is philosophically aligned with her husband to support the elite remaining in positions of power.

      She’s also more hawkish on Iran. A war with Iran would be catastrophic right now. If a backward desert country like Iraq cost us $1 trillion, can you imagine what a technologically sophisticated, more populated, and geographically diverse Iran would cost? Congress will be cutting entitlements all the more in the name of fiscal responsibility. As it is, Reid and Boehner have agreed to make the defense sequestrations a moot point (and of course Obama will sign, the last thing he wants is another debt ceiling debacle, he has an election in November!).

      1. different clue

        I used to believe the same thing till recently. Now I wonder.
        I recently stumbled across a blog called The Confluence by Riverdaughter. It makes some seemingly well-supported claims that HClinton openly said SS was NOT in crisis where Obama claimed it WAS, that she favored a kind of latter-day HOLC for mortgagee-relief, etc. The blog also notes that the Gang Bankers’ massive funding support of Obama as against HClinton would seem to indicate that they expected more favorable class-privilege treatment from a President Obama than from a President HClinton. The support Obama as-against-HClinton got from privileged Inner-Party filth like Reid and Nancy “Impeachment is off the table” Pelosi also makes me wonder just how totally similar to Obama she really would have been. Clearly Reid and Pelosi were afraid to take that chance. I am beginning to wonder just how much upper-class-privilege sentiment she really shared with her Free-Trade-loving economic-treason-committing husband.

        I think an emergency Candidate Transplant is an experiment which deserves to be run and I hope the DParty performs it. I certainly won’t be voting for a ticket with Obama anywhere on it . . . even if that means Romney winning.

  8. Middle Seaman

    The constant attacks by Stoller on Frank and Bill Clinton are par for the course for Democratic hate mongers. In this post, all one sees is Frank disagreeing with Sherman. I guess that’s a vicious attack. Disagreement even vehement is an important and necessary part of any open discourse. People having problems with that can always try and stage a coup.

    How is Israel connected? Or is Stoller trying to curry favor with the anti-Semitic branch of the Democratic party. Also, all three congressmen mentioned happen to be Jewish, as if it matters.

    1. LucyLulu

      anti-Semitic branch of the Democratic party

      I’m guessing I’d be put into this category and dispute that I’m “anti-Semitic”. I am not. However I resent the level of influence that AIPAC, as I would any other group, has had on our foreign policy. I also resent the pressure from Netanyahu and pro-Israeli factions to take a hawkish attitude towards war with Iran. I am opposed to going to war with Iran. Iran poses no threat to the US, which should be the sole grounds for war. And surely you aren’t defending how the Israelis have handled their conflicts with the Palestinians?

      That doesn’t make me anti-Semitic. I know Jewish people who are equally anti-war. According to a friend’s daughter who just returned from Israel, many in Israel object to war with Iran. It has nothing to do with the religion being practiced. I disagree equally with our Mormon candidate. And McCain. It’s a political and foreign policy disagreement and correlating it to religion is a false equivalence. Is there a Semitic race card now?

    2. different clue

      Congressman Grayson, whom Matt Stoller staff-worked for, is also Jewish. I haven’t read of Matt Stoller expressing any regret for having staffworked for Grayson, nor any after-the-fact objections to Grayson’s positions on policies. So I suspect that . . . isn’t it.

    3. different clue

      Well . . . I think Clinton has earned his share of attacks for NAFTA, WTO, MFN for China, the TelCom Reform Act of 1996(?), his refusal to veto the Glass-Steagall Repeal, the Commodities Trading Modernization Act, etc.

      Don’t you?

  9. Skeptical

    Who is projecting his pettiness on to whom? It’s hard to tell in the selective recitation of a pissing match.

  10. grayslady

    Brad Sherman is one of the brightest individuals ever elected to Congress. If you ever watch him on C-Span, you can tell immediately that he’s the only one on the finance sub-committee who actually understands the issues. Unlike most members of Congress, he had a real job before he was elected–he was with one of the big four accounting firms; and with his Harvard Law degree (Magna Cum Laude) and his CPA, he doesn’t need to schmooze the banks to ever find future employment. That’s what makes him so dangerous to blowhards like Barney Frank. He and Berman are both over-the-top when it comes to Israel, but, these days, that seems to be the norm for everyone except Ron Paul.

  11. MacCruiskeen

    As much as I never really mind anyone talking trash about Barney Frank, I’m not convinced that the quoted story represents a “vicious” “Bitter” “temper tantrum.” It may be Barney Frank’s highly biased version of reality, but “politician takes sides and spews baloney in the process” isn’t much a headline, I suppose. Or even much of a story; it’s more or less par for the course these days.

    Not everything needs to be ramped up to 11.

  12. we're going to put their heads on sticks

    Thanks for reminding us that there are still honorable men and women in Congress despite the unremitting efforts of the parties to purge them. Sherman should take a leading role in a parallel government when congress has pissed away its last driblets of legitimacy and gets supplanted by a state that will honor its obligations and commitments.

    1. Mary

      Hear hear. Sherman is a patriot. This retelling makes me nauseous. I remember well the sweaty breathlessness of all who were pushing through this heist. No wonder their BP was elevated. The spectre of all that money ahead in one form or another. Such an exodus of “retirement” after that episode. It’s so depressing to even contemplate what has transpired since then.

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