Iowa Attorney General Tom Miller, Head of 50 State Investigation, Retreats From “Tough With Banks” Stance

We were early to warn readers that Iowa Attorney General Tom Miller, who is heading the 50 state probe into mortgage abuses, was unlikely to take as tough a stand with banks as his early sabre-rattling suggested.

Now other close observers of the 50 state AG probe, like Marcy Wheeler of FireDogLake, have pointed out that expectations for this group were probably too high, given that some of the AGs had been opposed to the effort before, and they’d hobble the effort from the inside. But even though true, that observation still gives Miller more of an out than he deserves.

The fact is that Miller had decided, before any investigation was undertaken, that his group was not going to take any action that might allow investors to recover for losses. Why? Some of the parties in a position to recover would not be Americans. This came by e-mail before the December meeting at which Miller promised to “put people in jail” as well as obtain deep principal mods and compensation for defrauded homeowners:

The homeowners off to meet Tom Miller is a setup for a photo-op to imply buy-in. I was w/ a European documentary maker this weekend who spoke to Miller a few days ago and said Miller relayed the fraud isn’t so bad, everything will be worked out .. the standard line; he’s already made up his mind. He doesn’t want those European governments demanding their money back. The meeting is a photo-op setup because the too-big-to-fail crowd is scared of put-back liability and shorts; they’re working hard to make it appear they’re doing something to quiet everybody down.

So get this: so keen is a state attorney general to protect the wallets of big banks that he’s decided there wasn’t much fraud before doing any serious forensics. And his reason was to deny payouts to investors because they are foreign (China, are you taking notes?). But to prevent that outcome, he also has to throw US investors and wronged homeowners under the bus.

Welcome to equal protection under the law, circa 2011. No wonder gun sales are skyrocketing.

Thus Miller’s retreat is entirely predictable, and we can plot its trajectory. Following his “get tough with crime” mid-December declaration, Miller took criminal investigations off the table on January 4. From Bloomberg:

The five largest loan servicers, including Bank of America Corp. and JPMorgan Chase & Co., may be the first to settle with the 50 state attorneys general probing foreclosure practices, Iowa Attorney General Tom Miller said…..The group isn’t pursuing a criminal investigation, Miller said. “Our focus is to reform the servicing process and that’s inherently civil, not criminal,” he said.

One of our readers, who is a seasoned litigator, disagreed vehemently with Miller’s “this can only be a civil investigation” and provided examples of criminal prosecutions for analogous misconduct.

The latest step backwards by Miller is a softening in his stance and a refusal to reaffirm his earlier commitments. From Iowa CCI’s press release about its meeting yesterday with Miller:

Following their December 14th meeting with Iowa Attorney General Tom Miller, who is leading the 50-state investigation of the “foreclosure-gate” scandal, 200 members of Iowa CCI met with him again on Tuesday to continue the push for a settlement that will help millions of Americans stay in their homes. Iowa CCI is part of a coalition of community groups across the country fighting to end the foreclosure crisis.

“Tuesday’s meeting felt a lot different than the meeting in December,” said Iowa CCI Director Hugh Espey, “In our first meeting with Attorney General Miller we felt like we had a champion that was ready to go toe to toe with the big banks. We left this meeting wondering if the big banks had knocked the wind out of our state’s top law enforcer.”

“In many cases a loan modification is in everybody’s best interest – the homeowner, the investor, servicer and the national economy,” Miller had said in a statement following the December meeting. “… I know it’s worth our best efforts to save as many homes as we can.”

In Tuesday’s meeting The Attorney General was less forthcoming about the intended outcome of the settlement. He did not repeat previous commitments to aim for a settlement that would keep people in their homes, nor to press criminal charges against bank officials where evidence of fraud and criminal wrongdoing is found. The Financial Crisis Commission has recently referred several cases to the states for further criminal investigation.

As more aggressive AGs, like the ones in Arizona and Nevada, file suits against banks, perhaps their complacent peers like Miller will be embarrassed into acting. But until then, this “see no evil, hear no evil, speak no evil” by top enforcement officials appears likely to remain the norm.

Print Friendly, PDF & Email


  1. Fraud Guy

    This is getting absurd.

    Is there any attorney that won’t sell out their client in order to reach an amicable settlement?

    If you’re representing the public interest, then the idea is to protect the public, not public corporations.

    1. psychohistorian

      Fraud Guy said: “If you’re representing the public interest, then the idea is to protect the public, not public corporations.”

      This was changed in the 50s when corporations were given the rights of We the people…. so they could fight godless communism. It has recently been reinforced by the Supremes so that corporations can buy “themselves” the most supportive government that their owners who also own the banks can afford.

      1. Georgann Marks

        Since the last assassination, I’ve been monitoring incendiary speech on the web – to see what might push somebody over the edge.. what ever that means.

        the above headline proves – once again – that our governors do not work for us – but against us – when push comes to shove.

        Assassination and Revolt do not require cheerleaders to become the next headlines.

        Just pick up a paper, or click on your favorite blog – and if you have nothing left to lose – you act.

        I’m actually a little fed up with Americans. I expected a Tunisian style revolt long before this headline.

        I waiting and waiting and waiting.

  2. eric anderson

    I don’t know if his opponent would have done any better, but at least I can say I didn’t vote for this utter disappointment of an AG.

    1. Tao Jonesing

      To my knowledge, all state AGs are elected, not appointed.

      The state AG with the first real shot at accomplishing anything was Andrew Cuomo, but after a lot sturm and drang in advance of his successful gubenatorial run, he has been a hole of silence.

      I wonder who wound up footing the bill for his campaign . . .

      We need more people like Bill Black in public service and in private industry. There should be a place for people who make their own self interest synonymous with the greater good. Unfortunately, Milton Friedman’s neoliberal ideal of a society of sociopaths and narcissists has been largely accomplished. I wonder if he’d be proud of the disaster that his misguided ideology has wrought. I’m actually beginning to doubt it, but that does not make his legacy any less evil.

      1. AR

        Cuomo? Are you forgetting this, from Yves’ 1/13/11 post which shredded the Third Way proposal to ‘fix’ the foreclosure fraud mess?

        Third Way is an influential think tank whose board is composed of a special Wall Street-type – the Rubin Democrat. These people sit at the nexus of politics and finance, and are conduits for big bank friendly information flow into the administration and Congress. The President of the think tank, Jonathan Cowan, was the Chief of Staff for Andrew Cuomo at HUD in the 1990s…

        There’s more about Cuomo’s tenure at HUD here:

  3. neely

    clearly the AG from iowa is a pussy. so if this fellow is leading the inquiry…why the banks are laughing all the way to the bank!

    not prosecuting = patriotism = complete and total b.s.

    gots to love crony capitalism. we are all f#*%ked if our own state AGs cannot do what is right.

    see you all in the gulag.

  4. readerOfTeaLeaves

    Given evidence that JPM screwed Ambec, then shorted them, Miller is going to end up looking really dumb, IMVHO.

    People may not understand derivatives, but they understand that you don’t bet against your own client, after setting that client up to be screwed.

    For Miller has placed himself in an awkward position.

  5. rollo

    Is this AG another part of the delaying game to get most of troubles shielded by Statute of Limitations?

  6. Doug Terpstra

    Miller’s meeting with the Euros was likely to arrange an offshore account and perhaps a small, defensible Mediterranean island on which to retire when the SHTF.

  7. Francois T

    My! My! My!

    Do these AGs come cheap these days, or what? A bit of political rhetoric, cash from settlement goes to the State, another gold star to the resume, not to much work to do and voila! Everyone (but the victims!) is happy.

    As for this quaint concept called “justice”, let’s get real here.

    This will end badly…very badly!

  8. William Benedict

    Clearly he has sold his soul to the demoniac forces of evil too. Not a man I want to trust.

  9. MinnItMan

    WFC is a large employer in Des Moines, but I don’t think that has anything to do with it. Not at all.

  10. Norman

    Interesting read & comments. One should look to the past to see the future; Lawyers, like used car salesmen, politicians, flimflam artists, are just cynical beings, so why should anyone trust them to do what’s right for the good of all? Considering that they all require $$$$’s to represent clients, along with the perks that go with the office, regardless what office they choose, then the people have to expect to only crumbs after being represented in maters such as these. After all, what is a Lawyer, but someone who lies for money, has no loyalty even to those that pay his way, save for the Mafia, who have a code of justice all their own.

  11. AR

    Is there any doubt now that Wall Street and the MISC have total control, and we are an occupied country? I view the ‘caving’ of all authority, lack of rule of law, blatant kleptocracy, outright thievery, and treatment of Bradley Manning as proof.

    It’s clear that force and repressive dominance rule.

  12. JS

    Tom Miller’s purpose was never to help homeowners. He testified as follows:

    “To be clear, the States do not believe that every foreclosure is a tragedy that must be avoided. To the contrary, we have consistently stated over the last three years that we are only interested in modifications where the cash flow from the modification exceeds the expected proceeds from a foreclosure sale.”

    So, Mr. Miller is saying if a foreclosure is profitable the banks should NOT give a modification! Does this sound like someone who is interested in homeowners or in protecting investors in mortgage backed securities?

    Following Mr. Millers guidelines, struggling homeowners with equity are to be categorically denied a modification and driven instead, to foreclosure!

    For those homeowners whose foreclosure is NOT more profitable for the mortgage INVESTOR Mr. Miller would perhaps push for a modification, and then tell the world how he helped homeowners!

    You have to inspect every word from these guys carefully to understand their true intent.

    The FDIC HAMP guidelines have a similar statement on page 3, stating that the program

    “mandates that the cost of the modification must be less than the estimated foreclosure loss.”

    This means struggling homeowners with equity in their homes are categorically denied a modification because the banks can tap into that equity through foreclosure and reap a big profit at the homewoners expense.

    Compare this with the govenment’s Home Owners Loan Corporation of the 1930’s which directly saved millions of homeowners by offering market rate mortgages, and those with equity proved to be the least likely to redefault.

    HAMP and all it’s proponents are con men, as is Tom Miller!

  13. MichaelC

    The cost of foreclosing and passing good title is suddenly a more material consideration in the modification cost/benefit decision.

    If these judicial decisions continue on the Ibanez path we won’t need the AGs imposing modification requirements. Investors should want to exit as quickly as possible once its clear the courts can’t be counted on to enable dodgy foreclosures

  14. deepsouthdoug

    Amazing the banksters can get 50 state AGs to fall in line. One would think that at least one of the AGs would figure out that throwing some of the banksters in jail for a loooooooooooooog time would the the way to achieve higher political office.

    The banksters seem to have bought off the entire Federal and state political classes.

  15. indio007

    This is just randomness. The banks have a plan here to fix the title issues and all that. The music is playing and they are planning to have a chair before titles a reset. There’s is an interview with Lee County Clerk of Court’s (Florida Rocket Docket Inventor))on
    He let’s the cat out of the bag on what the plan is to fix title issues. Here’s the quote.
    You say the judge has the right to take the papers at face value and, initially, that’s surely true. But what after issues have been raised with the papers? And you say it’s a “technical glitch,” but standing issues create title problems, and that’s not just a technical glitch.

    That’s right, it’s a huge problem. Look, in the 1920s Florida had a land rush that ended up messing up many titles, so much that the legislature passed a law saying from here on out you can rely on the titles. We may have to do something like that again. Government should be able to come in and fix this problem.

    there’s the plan folks . The plan is to legalize the great land grab fraud of 2010-2011.

  16. TC

    FIRST flank the cowards with Glass-Steagall, THEN the perp walks naturally will follow. Forget about any meaningful action being initiated by weak personalities well-groomed in the manner of acceptable conduct in a fascist chain of command.

  17. Ron

    So Miller turns out to be a typical attorney, All talk and a wuss in reality. Probably found that his brother in law works for one of the banks or a mortgage guy somewhere.

    Hey, I cannot even get the new AG here in KS to respond at all. Who knows what his thought is, but if he is typical Kansas, he is a wuss on this too. All they usually care about out here is abortion and bible reading.

Comments are closed.