While a large number of “liberal” groups, ranging from the official Democratic party outlets (the Center for American Progress) to ones that sometimes cross swords with the Administration (MoveOn, the Working Families Party) praised the Tuesday evening announcement of mortgage “investigations” with Schneiderman co-chairing the effort, others who have been watching the mortgage legal fight closely were far more ambivalent about the creation of a new unit in an initiative …which has done pretty much nothing since its creation in 2009 (boldface mine):
Attorney General Eric Holder, Treasury Secretary Tim Geithner, Housing and Urban Development (HUD) Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro today announced that President Barack Obama has established by Executive Order an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime. The Department of Justice will lead the task force and the Department of Treasury, HUD and the SEC will serve on the steering committee. The task force’s leadership, along with representatives from a broad range of federal agencies, regulatory authorities and inspectors general, will work with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, address discrimination in the lending and financial markets and recover proceeds for victims.
The task force, which replaces the Corporate Fraud Task Force established in 2002, will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government’s law enforcement and regulatory apparatus. The attorney general will convene the first meeting of the Task Force in the next 30 days.
The New York Times, which has been a staunch supporter of Schneiderman when he was sticking his neck out, is taking a “yet to be convinced” stance:
There is good reason to be skeptical. To date, federal civil suits over mortgage wrongdoing have been narrowly focused and, at best, ended with settlements and fines that are a fraction of the profits made during the bubble. There have been no criminal prosecutions against major players. Justice Department officials say that it reflects the difficulty of proving fraud — and not a lack of prosecutorial zeal. That is hard to swallow, given the scale of the crisis and the evidence of wrongdoing from private litigation, academic research and other sources.
This new investigation could be the real thing…
For now, the administration is saying that the new investigation and the settlement talks will both proceed. It would be better to settle with the banks only after officials have a full picture of any and all violations.
There are reasons to be wary. Some of the federal officials who will also be involved with the investigation — including Eric Holder Jr., the United States attorney general, and Lanny Breuer, the leader of the Justice Department’s criminal division, who will be a co-chairman — have not distinguished themselves in the pursuit of mortgage fraud.
To win and retain public trust…The administration must ensure that the group has ample resources. The co-chairmen must hire a tough-as-nails prosecutor with a successful track record in financial fraud to drive the investigation forward. And the group must move quickly and vigorously, issuing subpoenas and filing cases. It is not starting from scratch; various agencies have all had separate investigations under way.
The Times identified the two red flags. First, why are the settlement talks still proceeding? This is ridiculous if the plan is to do investigations. The fact that they have not been halted calls this exercise into question. Second, if this is supposed to be a heavyweight investigation, why hasn’t Obama set up an independent prosecutor, a role much more likely to attract the sort of kick-ass litigator that the Times correctly thinks is necessary for the job?
One good sign so far is that the key attorney generals do not seem to have been deterred by Schneiderman joining the Federal effort. Note that the New York AG has made a shift in posture that has not been lost on his fellow AGs, even though the media may not have called attention to it: he has gone from being part of the opposition to now officially willing to consider a deal provided the release was narrow (this is not just my surmise; I’ve heard this from a contact in a position to know). That of course would provide cover to any of the dissenters who decided to relent. This IS meaningful win for the Administration, and I’m not certain Schneiderman understands he has traded away a major bargaining chip (his opposition) for a hope and a promise from the Obama camp.
Beau Biden, in an interview on Dylan Ratigan show, came pretty close to dissing Schneiderman by reaffirming his opposition to a settlement (he wants to pursue his outstanding litigation), praising his fellow dissenting AGs, and raising questions about what an investigation would need to have to be credible (and all those elements seem to be lacking):
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Kamala Harris has also said she is not settling (the problem with Harris is that she is still seen as less firm in her stance than the other opponents):
Calif. Atty. Gen. Kamala D. Harris’ office has called a proposed $25-billion settlement with the nation’s mortgage industry “inadequate.”
“We’ve reviewed the details of the latest settlement proposal from the banks, and we believe it is inadequate for California,” Shum Preston, a spokesman for Harris, said in a statement. “Our state has been clear about what any multistate settlement must contain: transparency, relief going to the most distressed homeowners and meaningful enforcement that ensures accountability. At this point, this deal does not suffice for California.”
So the Obama camp has not yet scored a decisive victory, and it seems almost desperate to put out any bit of progressive-seducing information it can put out (Geithner’s “the President won’t invite me back” statement today was another clever bit of PR, since it was Geithner who said he wanted out more than a year ago, and it was Mr. Market, not Obama, that objected. And remember, this wicked witch is not dead, and can do a lot of damage, particularly if he is in the saddle when a Eurocrisis hits). But this was an extremely clever tactical move. Too bad Obama can’t seem to muster the same level of interest in solving problems as he can in managing optics.
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Did Schneiderman go to the dark side? I think so. Anyone who is willing to work with 3 co-chairs who are corrupt is going to the dark side.
Here in this smaller southern city, federal prosecutors, FBI and other law enforcement have no difficulties in investigating, prosecuting, and convicting smaller players.
Have a Beazer anyone ?
However when the 13 bankers are involved not a hint of an investigation.
So clearly we have a two tier law enforcement system in which there is equal justice for all (with some being more equal than others}. And not that a recent report shows that not only is justice skewed in the banking / investment world but the IRS also seems to have a bias towards the more equal too.
Could we begin a petition / collection to change the inscription of the facade of the Supreme Court to read “Equal Justice for All – Cash Only”
The Times should have said: “Until there is creditable evidence to the contrary, NYT will refer to this as The Schneiderman Defection.”
I have to say, I preferred Stan Lee’s original “Amazing Schneiderman” to Barack Obama’s “Spectacular Schneiderman”. This whole clone saga is just lame. :-(
For the win!
Too bad Obama can’t seem to muster the same level of interest in solving problems as he can in managing optics.
Exactly so. The world is divided into two sorts or people, ‘courtiers’ and ‘engineers’. The former see the world through a distorting PR lens. Absent an awareness of their blindspot and good engineeer at their elbow they are very dangerous people when in positions of power.
One of the necessary talents to be a successful ruler is an ability to recruit not only good people but people who will balance the team. On this measure Obama gets 0/10.
Naomi Klein compared Obama to a hollow corporation which owns nothing but its brand.
http://www.democracynow.org/2009/11/23/naomi_klein_on_climate_debt_why
“One of the things in this — you know, a large part what I write about in No Logo is the absorption of these political movements into the world of marketing. And, you know, the first time I saw the “Yes, We Can” video that was produced by Will.I.Am, my first thought was “Wow! You know, a politician has finally produced an ad as good as Nike, that plays on our sort of faded memories of a more idealistic era, but yet doesn’t quite say anything.” We think we hear the message we want to hear, but if you really parse it, the promises aren’t there. It’s really the emotions.
And, you know, I think that that explains, in some sense, the paralysis in progressive movements in the United States, where we think, you know, Obama stands for something, because our emotions were activated on these issues, but we don’t really have much to hold him to, because, in fact, if you look at what he said during the campaign, like any good super brand, like any good marketer, he made sure not to promise too much, so that he couldn’t be held to it.”
G3, on branding and Obama: Here are two classic expressions of emotions activated by branding in 2008, from the guy now in charge of fundraising at Daily Kos, which tells you all you need to know about that particular pillar of the Demcoratic Party. Warning: Put down your coffee and have the brain bleach handy. (The site is dormant, so there may be an error message, but click through to the link).
Bowers’ essays contain nice sounding words but don’t really convey much meaning to me (I guess I see the creative class v. working class designations but it’s not like the Dems haven’t been going this way for decades).
What’s more interesting to me is the meta story–Bowers (like Booman) are quick to come up with this road map going forward–right as they prematurely predicted Obama’s victory.
Both Booman and and Bowers are left gatekeepers. They both have nice sounding (but meaningless) rationales justifying Obama’s politics: Bowers argues for the creative class takeover and incremental PR led policy shifts–Booman argues the GOP has to be totally crushed before any liberal stuff can be done. But both are really meaningless PR exercises designed to keep potentially wayward liberals in the fold.
Plus, the Clinton/Obama divisions* in the Democratic party actually helped the Democrats because it distracted voters from the reality of their right-wing party and gave people hope to change the party from within. But these divisions were largely over meaningless personality politics.
Then Bowers goes on to gatekeeper central (Daily Kos) and poor Booman was asking readers to help him get a writing job (I suspect he does just fine and the struggling humble blogger thing is an act–but I just have speculation and I don’t know the financial reality of bloggers like this). But I don’t trust either of these guys.
*And these gatekeepers sowed divisions. Not only between Clinton v. Obama Democrats, but with libertarians, Dennis Kucinich supporters, and Nader supporters. Heck, I even remember Booman sort of pretending to pick fights with Bowers and hinting that Bowers was the extreme lefty while Booman was more in line with Obama policy-wise. They both pretended to pick on Daily Kos . . . . it’s all FAKE
the true believers sound like victums of spousal abuse
they so (still) want to believe
they want to go back
they look for some reason to put blame on themselves (I didn’t understand)
brian, exactly right. Where are the subpoenaes, where the warrants? When will we see the Perp Walk?
That depends on what you think the team is trying to do.
Maybe Obama is not an incompetent liberal but a stunningly competent part of the financial elite.
> Maybe Obama is not an incompetent liberal but a stunningly competent part of the financial elite.
The fact you led with the word “maybe” answers the question.
KnotRP, yes, Oreobama KNOWS who butters his bread now and forever.
“…will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government’s law enforcement and regulatory apparatus.”
“build upon efforts already underway” which had as its SOURCE- the Peoples’ Movement.
“the resources and expertise of the government’s law enforcement”: the problem being that these ‘leaders’ are the self-same co-conspirators who have thusfar, seeing all through benefit of their alleged resources & expertise’ have REMAINED MUTE satisfied to let this Nation they are sworn to, GO DOWN the TUBES!
They begin their sooper committee by cobbling the TRUE LEADERS who stuck their necks out for the People: Schneiderman & Cordray, just in case these 2 guys decide to lay bare the REAL story here.
Call me a cynic but how long before Beau Biden will be reined in thru Daddy Biden ?
to be equally cynical, if the Bidens want to build a powerbase in the Democratic Party, there’s a big vacancy for a national Teddy R-esque liberal.
And by now the Bidens have enough Rolodex contacts/name recognition to not need Establisment/Obama/Clinton fundraising.
If Beau wants to run for national office one day, crusading against the banks would be a great way to introduce himself to the public.
Yep, as I said a while ago this is simply an audition for the next generation of Democratic actors.
Harris, Biden, and Schneiderman are the 3 actors in the running. Or maybe there is more than one acting job available and this is a way to buttress the bona fides of all three of these people.
Yeah, that’s what’s going on.
I’d be curious to learn more about the Nevada AG–if there is hope that’s probably the place to look but I’ve lost hope so I don’t expect much there . . .
I guarantee you Schneiderman knows about Tom Dewey’s career. Thing is, Dewey collected some real scalps. So maybe ES won’t go into the tank as fast as Yves seems to expect – especially with the gray lady watching.
Hope springs eternal, and family members tell me I’m getting really mellow in my old age. But look: Wouldn’t a joint effort led by an AG who can reach for the Martin Act be – at least potentially – a lot more effective than one involving just the Holder DOJ?
I wish I had hope but I don’t.
The fix is in.
G3, you think Beau ain’t a shill making hay till the sun don’t shine?
Thinking about this issue would be clearer if we separate criminal and civil. The 50 AG negotiations are purely civil. They do not address criminal issues and have never considered criminal immunity.
good point;
a) we need to see Banksters (and the entire financial tewwowista underlings; Servicers, Mortgagors; Accountants, Liar-Loan originators, RoboSigner head, etc, etc,) hauled off in Cuffs (no coat), and JAILED!
b) “civil”? ..my ass. Take your Civil crap and shove it
c) where’s Eliot Spitzer when you need ’em?
Where is Eliot Spitzer? My guess: underneath some broad wielding a whip. Maybe what we need is a twosome: Spitzer and Tiger. No, wait, that would be a fivesome, at least.
enouf, where’s Eliot Ness?
But it’s the AGs job to pursue both civil and criminal cases. They may have not considered going after the big-time criminal mortgage fraud in their states, but this is in their job description.
The states HAVE pursued small time criminal fraud as well (the mortgage brokers and modification attorneys, etc.). They just haven’t gone up the chain to the big boys because of this conception that it is too difficult and a inter-agency joint task force would lead the charge.
It is a fine line between civil and criminal fraud and it is highly suspicious that there is evidently massive civil fraud liability but no criminal liability.
Walter, the way is RICO, RICO, RICO, RICO. But who will bring it?
Yeah, a federal prosecutions using all available weapons is preferable. But it’s not the only route.
Heck, one state prosecutor can do a lot of damage.
That’s all I’m saying. Yeah, it would be great to get an inter-agency joint task force commission panel to investigate . . . but we aren’t going to get that comprehensive approach (nor is it even preferable, imho) . . . so let’s just start small.
Indict the individual robo signers and move up the chain, for instance. There are a number of legal theories that could be pursued by indicting the junior people. A county prosecutor could start doing this immediately.
“Beau Biden, in an interview on Dylan Ratigan show, came pretty close to dissing Schneiderman by reaffirming his opposition to a settlement”
Is it a staged gradual cave-in, gradually wear down public opposition? How can Beau Biden not be in the Obama camp?
Oedipal issues?
Not likely, since he keeps the given name, “Beau.”
Is there really a Beau Biden? Sounds more like a cologne.
Why don’t you wait for it to fail before it fails?
Because that’s how the can gets kicked down the road. Also, the statute of limitations. And how’d the “He’s only been in office ___ months!” talking point work out with Obama? Not well.
I’m with Ralph Nader on this one:
http://www.democracynow.org/2012/1/25/he_says_one_thing_and_does
Context
They hobbled the 9-11 Commission with an absurd deadline, perhaps this effort will do the same, and surprise!, it already has with the Statute of Limitations.
I’m sure I’m not the only one to think it not possible to match the outrage of the Kissinger appointment, but look at this cast of characters.
“Justice Department officials say that it reflects the difficulty of proving fraud — and not a lack of prosecutorial zeal. .. given the scale of the crisis and the evidence of wrongdoing ..”
It might just be posturing but Jamie Dimon came out today saying that if the investigation goes forward it will likely derail the settlement negotiations.
http://www.msnbc.msn.com/id/46145731/ns/business-real_estate/
Anything that Dimon’s against, I’m for, just on principle.
Having the connection made in public by one of the involved elite is new, I think. The just-announced committee is supposedly focused on fraud in mortgage origination and securitization but the settlement was started to deal with fraud at foreclosure, including robosigning. Readers here all realize they’re intrinsically linked but I don’t recall having seen them explictly addressed together by any of TPTB – either in the AG negotiation or the new Schneiderman investigation.
“It will likely derail the settlement negotiations” – ? No sugar. Duh.
Sometimes having to ask the question answers the question, “is this a sham process?”
So do something about it. Write in William K. Black for President. And call your AG and tell them “Prosecute, Don’t Settle.”
Blurtman, we must DRAFT William K. Black as President.
Occupy Charlotte 2012:
BILL BLACK/YVES SMITH 2012: NOW OR NEVER
Chris Hedges: Secretary of State
“a role much more likely to attract the sort of kick-ass litigator that the Times correctly thinks is necessary for the job”
Reminds me:
This has an interesting bit about William J. Stuntz’ argument that US law emphasizes process and procedure rather than principles – sentencing guidelines anyone?
http://www.newyorker.com/arts/critics/atlarge/2012/01/30/120130crat_atlarge_gopnik
Which brings me to EW on Kiriakou
http://www.emptywheel.net/2012/01/24/how-did-doj-find-jon-kiriakou/
mentioning in passing that another Former Hero Of The Progressive Republic, Patrick Fitzgerald, has headed this investigation.
Fitzgerald is an interesting character. If he is not just another ad-Libbying kabukiator, he seems to be the very embodiment of procedure over principles. That would make him indeed a perfect choice for investigating Wall Street.
But of course, the Principle Of Disqualification By Voluntary Association holds – if Mukasey/Lederman/Warren/Johnsen accepted an apointment with Bush/Obama/Clinton, they just conclusively showed they are the wrong person for the job. So maybe Fitzgerald is indeed not interested in kabuki, and hence will continue to exterminate unsanctioned government leaks – due process, proportionality and priority be damned.
I don’t know anything about Patrick Fitzgerald’s
intentions. But at least, during the
indictment announcement press conference
for Cheney’s #1 Assistant Libby, Fitzgerald was
absolutely clear and I liked his expression:
“we’re just alleging what you’ll find between
the four corners of the page of this
indictment; no more, no less.”
[in substance, not a literal quotation.]
And by “cross swords with the Administration” we mean “cross their wooden, painted toy swords with the Administration.”
Fixed it for ya.
A good cartoonist could show Eric Holder and his posse bursting into an empty barn while sleek horses fade into the sunset.
“Progressive-seducing“?! See Byron, Don Juan:
Excellent.
MA Register of Deeds John O’Brien sent Holder 31,897 fraudulent foreclosure docs, and asked for a criminal prosecution.
So what’s Holder’s response?
One would also think that O’Brien’s request would be a good for Obama’s FU (Fraud Unit) to start.
Perhaps more country officials could do this; after all, they are the ones whose fees the banksters ripped off.
Seems like there are similar stories of other state officials that are asking for these crimes to be investigated/prosecuted:
http://cnsnews.com/news/article/robo-signed-mortgage-docs-date-back-late-1990s
And really, what’s to investigate? We have the names of the robo-singers. Indict them. Subpoena them and their records. Start going up the chain. It’s not difficult.
If this was a poor 19 year old black man accused of drug crimes a prosecutor would know what to do. You slam the shit out of him and his associates, threaten to ruin his life and throw the book at him unless he snitches.
And since it’s such a low priority for prosecutor offices maybe they can just put a junior lawyer on the case simply for practice. What’s the harm?
Really, FU stands for Obama’s Fraud Unit? It’s a *tell*.
Nope, made that up, hope to propagate it ;-)
Folks, from the earlier days, Schneiderman’s interests seem to have been on the side of the investor, rather than the home occupant (owner seems the wrong word). So he’s looking into how banks screwed investors, not Main Street. No one cares either about, or how, consumers are getting screwed over. Look back into what he’s said – it’s the investors he’s for. Not the consumers.
AG Biden didn’t come close to dissing Schneiderman. He was there. He didn’t name check him in listing people doing their jobs, and he put the exact right issues on the table: how many FBI agents? How many investigators? Show us it’s real.
I applaud this. If we do not send politicians an attaboy when they actually do something admirable, we are missing an opportunity to reward/reinforce good behavior, and increase our chances of getting more of it.
I see that there are a lot of cynical comments regarding Oedipus, etc. Maybe those commenters will be proven right, but I want to defend him instead.
I spent a morning with the AG back in the 2007 campaign, and he comes across as decent, earnest, and not even slightly smarmy. He is not a backslapper like Joe, but a good politician nonetheless. He listens to people, and answers their questions with real answers, not BS talking points. He pretty much charmed a roomful of rural farmers and blue collar folks by being straight with them.
If he has ambitions, so what? He appears to think that the path to advancement includes doing his job well. I have written to thank him, and suggest that others could do likewise. If he caves, he’ll hear from me on that as well. But this is one AG who actually sued somebody, i.e. the fraud machine known as MERS. We need more of that. Lot’s more.
The Oedipus comment was optimistic. Oedipus (Beau)… well, let’s say “rebelled against” his father (Joe).
Beau has to *show us the money-shot* – the subpoenaes, the warrants, the PROOF of his alleged intentions.
” Too bad Obama can’t seem to muster the same level of interest in solving problems as he can in managing optics.”
Indeed. But then, solving problems doesn’t seem to be a skill he possesses.
Just before Schneiderman was co-opted he made the announcement that his investigation had revealed several instances of “wrongdoing” (by the banks/servicers?). This terse statement after reassuring the public that he would release the results of his investigation by the end of 2011? So maybe that is why he was persuaded to join the DOJ – to put a sock in it. This is a stall tactic. Dimon calling for BK for the TBTFs? What happens if the culprits go for Chapter 7 before the results of these investigations are released? This could turn into a mad dash.
For him to say “wrongdoing” and not “fraud” is a *tell* of his intentions.
“attorneys general” not “attorney generals”
Newspeak connoisseurs will enjoy this from DOJ:
McClatchy, annotations mine.
There’s really only one question, and I believe Yves already asked it: Why no Special Prosecutor? A question that answers itself, once asked. Obama has served his owners very well.
UPDATE Oh, and the Rs aren’t calling for a Special Prosecutor either. That’s odd, especially considering their history in the Lewinsky Matter. Or maybe it’s not odd.
Well, off-label use of a cigar is far more critical to the people’s business than sandbagging any and all criminal investigations into housing bubble fraud. Panem and Circenses, at least until the angry hordes show up.
Why do we even need a special prosecutor?
Why not a good old-fashioned grand jury? Why can’t the AGs and regulators simply do their jobs? Schneiderman or Holder could have begun this process years ago and slowly built a case.
Special prosecutors are useful when the normal prosecutors have a conflict of interest. I agree that Holder appears to have a conflict, but the problem with the other agencies and state AGs is a lack of will rather than a conflict.
The system is corrupt. The AGs are already supposed to be independent and prosecute the laws fairly. They aren’t.
That would be great if there were a special prosecutor here–but it won’t happen, and it’s too late. The political elite in this country have already convicted themselves in my mind. They are guilty. I don’t want to give them any more chances. They should be fired, impeached, and imprisoned. No more negotiating with our oppressors. No more giving them credit for sort of pretending to do their job (Schneidermaen, Biden, Harris).
Exactly, enough with the “investigation.” Let the prosecutions begin.
I’ll believe them when they hire William K. Black as Special Prosecutor.
Hold the cynicism for awhile. The “rebel” AG’s can continue what they were doing. At least we stopped the “deal” that we knew was bad. Yves alerted us to the “investor” paying the price if they modified the value of the loan so the “investor” took the loss. Obama said the banks could pay for the loss. That is a step in the right direction. In spring OWS hitting foreclosures will help. The question is who will pay, how much, the terms and can Wall Street continue to do an end-run around state mortgage laws using robo-signing and lack of documentation?
“Cynicism”? Realism. Fixed it for ya. That said, I agree with what you say, and Occupy moving into foreclosures shows even a distributed leaderful organization can play where the puck is going to be. I believe that the Spanish indignados melted into the neighborhoods, and I would really like to know outcomes there….
This is a strategy of “divide and conquer” by the Obama administration which itself is so ass-deep in the foreclosure fraud that it cannot afford a true investigation.
If Obama truly wanted to get to the bottom of who, what, when and how, he would appoint Bill Black as a special independent prosecutor and let the chips fall where they may. Again, he’ll not do that because it will bring into question why this wasn’t done at the onset of his administration…..not something you want aired if you’re running for re-election.
Here’s an amazing story and cautionary tale I just discovered.
The wife of the Attorney General of the U.S. claimed goons kidnapped her and injected her with something–she died a few years later from cancer:
http://www.newsmakingnews.com/mbwhywasmartha.htm
“This article was completed for The Realist on July 11, 1972, the same day that Richard Nixon and John Mitchell wanted to put off investigation of the Watergate Affair. According to Associated Press: “The Committee for the Re-Election of the President is worried that a hearing on a suit involved in the break-in and bugging attempt could cause ‘incalculable damage’ to president Nixon’s campaign. The Committee asked U.S. District Court to postpone suit against [them] until after the November 7 election. To hear the suit before the election, the Committee said, could deter campaign workers and contributions, force disclosure of confidential information and provide the Democrats with a reason to hold a news conference.”
President Lyndon Johnson passed the Civil Rights Act in 1964. Parts of that Act were violated at the time of Martha Mitchell’s abduction, and in the way she was handled.
Her telephone was pulled from the wall, five men silenced her, and an unknown substance was injected into her body against her will.
As a friend of the court and a citizen, I have a right to charge that there has been a violation of her civil rights by those in responsible positions. It is in the national interest that she be permitted to talk freely before a responsible group.
We want to know what she saw. Martha Mitchell is the wife of one of the most responsible men in this nation. When she is treated in this manner, all of us are involved in having a right to know who is doing these things.
What happened to her could happen to any of us.
Those guilty of making her a prisoner are subject to $10,000 fine and 10 years in prison If a conspiracy is proven, each and every person involved is subject to the same penalties. Free Martha Mitchell!!”
It looks like she was given the “crazy” label–she divorced from her husband, was maligned in the press, and was abandoned by her family.
And evidently few took her story seriously.
Society will be on the road to recovery when the importance of the utility of envy is realized.
Envy as an unharnessed instinct can crush societies.
Envy that is frustrated and denied will keep people from taking risks in the market.
Policies that respond to envy may be in the offing eventually, when things have sunk to terrifying lows – they will likely be justified by other, prettier-sounding reasoning, as they usually are.
But if we could face up to the importance of harnessing envy in society – the real benefit of showing 10 people making $20,000 that one person making $200,000 won’t have it quite as easy as he or she might – we could probably craft policy with much more immediate effects.
Really, what this means is that the left must do away with its fairy tales.
No one making policy on the right anymore believes that the free market’s benefits accrue from the virtue of hard work and its incentives.
The left could stand to accept that “social justice” works, at least in part, by convincing the non-wealthy that the wealthy can and will be brought low.
I think I found one of the problems. The State-Federal Task Force on Mortgage Enforcement Co-chair (2009-present) is Washington AG Rob McKenna (R) currently running for Washington State’s governor position. Here is an email chain from his staff to me. I’m deeply disappointed in their responses and McKenna just lost my vote for AG.
Mr. Purpura:
Thank you for your continuing correspondence related to the ongoing financial services negotiations. I hope you can appreciate that the many interests at the table make this particular negotiation complex, fluid and time consuming. Alas, status reports of ongoing negotiations are not practical but comprehensive and accurate descriptions of any resolution will be timely produced. Should a resolution be attained, it will reflect our best efforts to fulfill the purposes of the Consumer Protection Act (and other related laws and regulations) and reflect our best efforts to vindicate the public interest of the residents of Washington. I fully acknowledge that you feel strongly about this issue. We appreciate your taking the time to share your strong views with us, even the ones that are critical of our effort. We will act in and we hope that, in time, you will come to see our efforts in that context.
Yours in service,
Michelle Ferazza
Legal Assistant
Consumer Protection Division
‘206.464.6491
Cc: Doug Walsh, Chief, Consumer Protection Division
From: Stephen Purpura
Sent: Thursday, January 26, 2012 4:53 PM
To: Ferazza, Michelle (ATG)
Subject: Re: 229522cctn: Contact AGO – Opposition to the multi-stateforeclosure fraud settlement
Dear Ms. Ferazza,
In the past, I’ve had good experiences with the Washington State Attorney General’s office. But your email does not inspire me that your office will achieve a valuable settlement for consumers. An estimate of a final settlement amount in the tens of billions of dollars in net present value is not even in the ballpark for a reasonable settlement unless all of this money is going to Washington State. If a final settlement is on the order of magnitude of tens of billions of dollars for all 50 states, It is mathematically impossible for such a settlement to have a meaningful effect, either as a disincentive to predatory action by the industry or as a disincentive to prevent future abuses. While more regulatory control of the industry may seem possible to you, when your office pursues financial penalties that are meaningless to the industry, it does not give me reason to have confidence in your ability to control industry behavior.
To put your proposed settlement in perspective, Bank of America alone paid more money in employee bonuses in 2009 than their share of a proposed mortgage settlement. How one participates in running a company that systemically damaged the United States and still authorizes the payment of billions of dollars in employee bonuses is mind boggling to most Americans. For the rest of us, if we make such a catastrophic failure in judgment, our employment ceases to exist.
The most alarming aspect of bank behavior is the brazenness of their disregard for the rule of law. I’ve bought and sold a number of homes, and I’ve seen it up close. Our experience with banks, mortgage servicing agents, and Washington State escrow companies is that they believe they can do anything and they apparently do! Continued public disclosure and investigation of their practices is needed to allow citizens to discuss these failings and act upon them. Your characterization of citizen engagement in Internet discussions about a settlement is deeply concerning to me and my family. We are well educated and can understand the discussions in enough detail to make an informed opinion. However, it does not appear that your office shares our opinion of the value of citizen discussion nor of what will be a reasonable remedy for past mortgage industry actions. That is unfortunate.
Sincerely,
Stephen Purpura
On Jan 26, 2012, at 4:04 PM, Ferazza, Michelle (ATG) wrote:
Dear Mr. Purpura:
Thank you for your inquiry about our ongoing settlement negotiations with the big banks over robo-signing and other foreclosure and loan servicing practices. There has been a lot in the news and in the blogosphere lately about these negotiations between the country’s largest mortgage loan servicers and a group of state attorneys general and a number of federal agencies. Our Attorney General and staff are among the longtime leaders in the fight to protect consumers from unfair or deceptive lending practices. From that perspective, let me give you our perspective on the negotiations and the potential settlement.
Beware the misrepresentations, distortions and outright falsehoods being circulated by those who don’t know the substance of the settlement negotiations. The truth is that the settlement is still being negotiated and criticism of it at this point is rank speculation. Nevertheless, it is not too early to make a few observations as negotiations continue.
A settlement promises significant benefits for distressed homeowners. We estimate the final settlement amount will be in the tens of billions of dollars in total value – unless it is allowed to be indefinitely stopped by critics who insist on diverting our focus away from the needs of homeowners. Those harmed by the mortgage meltdown need relief now, not months or years down the road. Every day we delay, more homeowners face losing their homes to foreclosure.
A settlement promises new approaches to the problems. For example, principal reduction for “under water” borrowers is very much on the table and will likely be part of any settlement. The settlement will also set new and stronger standards for loan servicing, including provisions that will ensure greater accuracy, timeliness and greater responsiveness to borrowers.
A settlement will not give the banks “total immunity” or a “blanket” or other broad release of matters not covered by the settlement. As is typical of all multistate settlements, the States will provide the servicers with a release appropriate to the relief they provide homeowners, including increased loss mitigation efforts and reformed systems to ensure that these servicing problems do not reoccur. Moreover, there will be no amnesty from criminal prosecution. This is a civilinvestigation not a criminal one. The states have never contemplated doing anything that would interfere with any criminal prosecution. While some state attorneys general have criminal jurisdiction, many are like Washington State, where the Attorney General does not have original criminal jurisdiction. If you have concerns regarding criminal prosecutions, you should address those to criminal prosecutors such as the U.S. Attorney’s Office or local county prosecutors. But you should also understand that over a decade ago, Congress deregulated the financial services industry. That meant there were a lot fewer rules to accuse bankers of violating.
A settlement will not interfere with the work of other state or federal agencies or of attorneys general who elect not to join the settlement nor will it waive any rights of individuals without their consent. The settling states may only release the claims of their own states. They cannot release the claims of states that do not choose to settle or the claims of individuals without their consent. If a state is unhappy with the settlement, they are not required to join it. The settlement will thus have no effect on that state or its citizens.
The attorneys generals involved in multistate negations with the banks maintain a laser-like focus on bringing as much help to distressed homeowners as soon as we can. The interests of homeowners are not the same as those of the hedge funds and other Wall Street investors he seeks to include in our negotiations. Diverting our energy and losing precious time while investigating the securities industry will only delay relief to homeowners and could blow up our whole effort.
Contrary to what some have alleged, this settlement will give us more, not less, leverage with the servicers to ensure that the home mortgage servicing industry serves the needs of America’s homeowners, and puts in place national servicing standards they will have to adhere to. We are at a critical juncture in our settlement talks. These negotiations are being handled by a savvy and experienced group of consumer protection professionals who have a long track record of bringing real relief to defrauded mortgage borrowers. If they agree to a settlement, it will be because they believe the terms are in the best interests of America’s homeowners. Combining the claims of private institutional investors with the claims of investors puts homeowners’ interests on the back burner at a crucial time. We believe the settlement holds the prospect of significant and immediate relief to distressed homeowners, which is good for homeowners, good for the real estate marketplace and good for the economy.
In closing, we recognize that there is much conversation in the blogosphere and that emails from various interest groups are being circulated. However, what I’ve offered here is the view from one of the states actually leading the settlement talks. These remarks are based on factual information about the actual substance of the negotiations. Please take accusations from those not involved in the talks with a healthy dose of skepticism.
MICHELLE FERAZZA LEGAL ASSISTANT
‘206-464-6491 |7 206-587-5636 |* michellef@atg.wa.gov
WA State Attorney General’s Office, Consumer Protection Division
800 Fifth Avenue Suite 2000, Seattle, WA 98104-3188
From: ATG MI CPR Contact AGO
Sent: Monday, January 23, 2012 10:45 AM
To: Ferazza, Michelle (ATG)
Subject: FW: Contact AGO – Opposition to the multi-state foreclosure fraud settlement
From: ATG WWW Email AGO
Sent: Friday, January 20, 2012 11:05 AM
To: ATG MI CPR Contact AGO
Subject: FW: Contact AGO – Opposition to the multi-state foreclosure fraud settlement