Jeff Connaughton: Why Romney Should Attack One of Obama’s Greatest Political Vulnerabilities

By Jeff Connaughton. Connaughton was the chief of staff to Senator Ted Kaufman during the financial reform fight in 2009-2010. He is the author of the new book The Payoff: Why Wall Street Always Wins. Connaughton was a special assistant to Senator Joe Biden, a lawyer in the Clinton White House, and a co-founder of Quinn Gillespie & Associates, one of DC’s premier lobbying firms. He’s now retired from politics and lives in Savannah, Georgia. Cross-posted from

Why has President Obama so far avoided responsibility for one of the most notorious failures of his administration, deciding not to pursue potential Wall Street crimes? Because Obama’s negative ads – and Mitt Romney’s own foibles — have successfully defined Romney as the candidate for the 1 percent. A recent Esquire/Yahoo! News poll shows that 58 percent think Romney would pursue policies that favor the wealthy, while just 23 percent say the same about Obama.

In reality, the willful failure of the Obama administration to investigate Wall Street executives is the political issue that should most frighten the Obama campaign – and I have little doubt it was the prime motivation for the unusual timing of the filing yesterday of a case against JPMorgan/Bear Stearns by New York State Attorney General Eric Schneiderman. Ignoring potential criminal wrongdoing by his largest 2008 campaign donors discredits the Obama message across the board: He hasn’t always fought the 1% on behalf of the 99%, and he’s the main reason Wall Street plays by different rules than Main Street. If an already dispirited Obama base – those who by the millions originally sympathized with the anger that drove the Occupy Wall Street movement – were constantly reminded by the Romney campaign of this odious Obama failure, some of them might stay home in November. And it might be a tipping point for independents. A recent Labaton Sucharow survey found that 61% of Americans will significantly factor a candidate’s commitment to rooting out corporate wrongdoing in their voting decision in November.

Our political system desperately needs this debate. In February 2009, before a Senate committee, then deputy FBI Director John Pistole testified that the fraud in the financial crisis “dwarfs” that of the Savings & Loan crisis of the late 1980s, when hundreds of S&L executives were jugged. Yet the Obama Justice Department didn’t indict a single Wall Street executive.

Regardless, with a brazenness that is shocking to those who are paying attention, Attorney General Eric Holder, in a February 2012 speech at Columbia University, asserted that in the last two years the department had indicted more than 2,100 people for mortgage fraud and that the administration’s “record of success has been nothing less than historic.” Trumpeting prison sentences for small-fry mortgage brokers ignores the central question: Did the Justice Department make a timely, purposeful, and concerted effort to investigate Wall Street executives? The President essentially admitted that the answer is no, when he appointed Schneiderman to co-chair a second task force to investigate Wall Street mortgage fraud.

The truth is that the department’s response during the past four years has been passive, desultory, and decentralized, when it should’ve been aggressive, systematic and creative. Moreover, in a recent speech, Assistant Attorney General Lanny Breuer admitted the department sometimes decided not to indict Wall Street banks due to “the collateral consequences” to the bank, its innocent employees and the financial markets. Breuer praised the effect of the department’s use of non-prosecution agreements on bank compliance programs. Incredibly, instead of focusing on responsible individuals for further investigation and possible indictment, Breuer is giving speeches on how bank CEOs — with their lawyers “and economists” — should make “compelling” presentations to the department about how indicting the bank would have unfortunate consequences for “the health of an industry” and innocent employees, while promising to enhance internal compliance measures.

Why hasn’t the Romney campaign exploited this vulnerability? Predictably, Mitt Romney won’t turn to President Obama during tonight’s debate and say “Your administration failed to hold specific Wall Street executive accountable. If I’m elected president, my administration will prosecute the powerful when they break the law.” That’s because, when it comes to Wall Street, we don’t have a two-party system. We have an ongoing Wall Street contribution party.

Regardless, Romney should attack the Obama administration’s inaction against individual wrongdoing as unconscionable, a stain on the American justice system and a sell-out of Main Street for the interests of the privileged few. He should make Obama defend the timing of the Schneiderman announcement, as it has lead observers to suspect whether political motivations are now driving the president’s task force. Another round of civil charges against the major banks, this time lead by Schneiderman (which can be settled using shareholder money after Election Day), will not deter financial fraud. Even Romney’s Wall Street supporters should understand that by leaving culpable individuals unpunished, our financial markets have lost credibility. If Romney doesn’t remind voters and Wall Street of these facts, America will be worse off for it.

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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. Tom

    He isn’t really a big time crook unless you must let him alone to prevent the loss of public confidence.

  2. jake chase

    Perhaps Rom ney’s reluctance is co nnec ted to his own life of fin ancial pre dation? His entire business model has been a cri me which the rig ged leg al sys tem has chosen to whit ewash. Oba ma is a Wall Street erra ndb oy and Rom ney is a stri pmi ning loo ter. Some choice.

  3. Tom

    Department: Hey, you guys are really stealing money from our citizens.

    Banks: What are you going to do about it?

    Department: We were thinking of going after some prison time for you guys

    Banks: Well, I would advise against that. I am not saying that we would or anything but, well…. lets just say we can make things a bit more unpleasant….

    Department: What?

    Banks: Well, I’ll deny saying it if you make it public but, we are still holding the country hostage at gunpoint and, since we are doing god’s work (he ain’t paying taxes by the way), you make one of our guys pay prison time…we make John Q Public put up 50 million destroyed lives – get it…good. An eye for an eye type of thing –

    Department: Thank you, thats very fair and just of you. Sorry to bother you…thanks.

    Banks: No problem then.

    1. Chauncey Gardiner

      You’re not suggesting that nice elderly gentleman in Omaha who mentioned that derivatives are financial WMDs was alluding to something, are you?

    2. just me

      we are doing god’s work (he ain’t paying taxes by the way)

      “Who is the landlord, the sun and the sand lord?” — Godspell

      bug eyes

  4. craazyman

    Two Out of Three Ain’t Bad

    I would have more respect for Mr. Romney for keeping his mouth shut. At least he would not be not guilty of hypocrisy along with vain ambition and blockheadedness.

    I can live with two out of three. And he might even be a pragmatic and competent president.

    But if stoops to such a cynically debauched ploy as this, then I would fault him more for his ambition and give him less credit for his pragmatism, which must be founded on integrity if nothing else. And he would only sink in my regard, not rise.

    Well, what I think doesn’t matter anyway. I’m not voting, or watching. It’s the NFL highlight reel for me tonight!

    1. Bert_S

      Would be hard to believe wouldn’t it. Then he still may have to explain his pick of Ryan for VP.

      Just saw a headline that, in the debate, Mitt accused O of trickle down economics. I guess I’ll never understand politics.

      What if we find out Romney was for single payer RepubliCare?

      What if Romney denies he’s a Republican? (could happen)

      “I am NOT a Republican and the Democrats still accuse me of that….and Ryan is NOT a supply sider…MORE toxic BS from the democrats….”

      We’ll have to wait for the highlights to be on the news tomorrow.

      1. Fiesty

        yeah, and what if he says he really likes the 47% and the other 99-47=52% need to take care of them?

  5. Mark P.

    I nourish no hopes that Romney will prove a class traitor.

    Still, the fact that a candidate as rich as Romney — and that’s saying something, since he’s richer than all eight of the last US presidents put together and this includes two Bushes — couldn’t be bought off by Wall Street was the only real leverage that he had in terms of an election strategy.

  6. Jill

    Black Agenda Report has 15 things you won’t hear asked about in the debates. These 15 things are what both candidates agree about. I would consider non-prosecution for openly criminal activity in the financial industry to be something both men also agree about.

    I don’t think Romney is a real candidate. He appears to be a foil–just something to scare the Democrats into voting for Obama. If he were a real candidate, there are many things even a person as right wing as himself could attack Obama on. He isn’t making any of those attacks. If he ran on restoring the rule of law alone, I suspect Romney could win. He won’t because he agrees with Obama about that too.

    1. Doug Terpstra

      Agreed. This post presupposes that Romney actually wants to win. Beyond his inexplicable “gaffes”, his selection of Ryan as polarizer, lack of foreign travel, and the pointless convention, he never misses an opportunity to miss an opportunity. While Obama runs a vague campaign about nothing at all, a blind squirrel could certainly find more acorns than Romney’s team. Just a few examples in addition to JC’s:

      The Fast and Furious gun-running scandal and Holder’s “evasions”

      The Libyan war, subsequent embassy bombing, and Obama’s Mid East doctrine in flames

      The joint agreement by the EC-ECB-IMF to withhold reports on the Greek debt disaster until after the US selections, at the request of the Obama administration.

      Bernanke’s September surprise of unlimited money printing, zero percent interest rates and the obvious correlation to Obama’s reselection.

      The rolling disaster/quagmire in Afghanistan and Iraq.

      The Romney campaign could be hammering on these things as well as rising gas and food prices, yet it remains strangely silent. Why?

      See Occam’s razor.

      1. Hugo Stiglitz

        I find myself with a similar reaction to the Romney campaign. He seems like a patsy, not a serious contender. I can’t imagine anyone on Wall Street is truly unhappy with the Obama administration.

      2. Maximilien

        “Obama’s reselection”

        Like that. So true.

        Here’s Joan Didion (from her essay “Insider Baseball”) on why presidential candidates are now pre-selected and real elections are a thing of the past:

        “The Democratic National Convention of 1968, during which the process was put to a popular vote on the streets of Chicago and after which it was decided that what had occurred could not be allowed to recur, is generally agreed to have prompted the multiplication of primaries, and the concomitant coverage of those primaries, which led to the end of the national party convention as a more than ceremonial occasion.”

  7. amateur socialist

    See this is why the GOP really missed a gem when they didn’t nominate The Donald. Sure he’s an arrogant know-nothing blowhard, but you have to admit the guy knows how to stiff bankers.

    1. alex

      Good point. For years he’d default on loans from Citi, only to have them give him one for another stupid project.

    2. Hugo Stiglitz

      Arrogant know-nothing blowhards are the bread and butter of the modern GOP since Buckley died.

  8. RT

    I think you know that they don’t. Hey, they’re the Blob, one club with two chairs, one left, one right. Plus, seriously, would such an attack be trustworthy?

    Go read Chris Hedges @ TruthDig or Tom Engelhardt @ tomdispatch to learn about over half a dozen very good reasons for criticizing Obama, and even one reason to sue him. If that’s too leftist for your taste, at the very least go read the opinion in Judge Forrest’s final ruling on NDAA in full length. She was appointed by Obama.

    Well, sure enough, they will not (or only as a very desperate measure, in bad faith) use any one of these. And for good reason. They’re Tweedledee and Tweedledum (to borrow a notion from Galbraith out of a completely different context). If you don’t like that, go vote for a third party. If you don’t – for, say, smart strategical reasons, e.g. not wanting to “throw away the vote” – then you most likely vote for no change, you’re left with no real choice but perhaps a bet on the presumably lesser evil or even only a less overt continuation of more of the same. Good luck.

  9. emptyfull

    It’s stunning to me that the Romney campaign has not been cynical enough to exploit this. I’m sure they could get Wall St. on board with some sort of scapegoat strategy to go after Obama on some way his administration helped some unlikable Wall St. group. Let Wall St. take a flesh wound so it can get even fatter after the election.

    But I think Romney is actually a true believer in his own magnificence (and in the magnificence of his social world). And the blob just wants to keep its corruption as secret as possible, talked about only in “quiet rooms.” So maybe not…

    1. S. D. Jeffries

      There is risk here, and bankers don’t like to accept risk. And who’s to say that Romney would be preferable in the White House? Obama has given the Wall Street whiners everything they’ve wanted, including implicit immunity from prosecution, the ability to receive unlimited funds from the Fed without any insistence that they must then lend them, and not even any re-written financial regulations to speak of. In addition, he keeps promising to “reform” Social Security, reduce the deficit and it’s been said that when Geithner leaves, Obama may just select Erskine Bowles as his replacement. If we’re going to be saddled with a Wall Street stooge for a president, at least we won’t have to deal with Obama pushing bills through congress to limit access to women’s health care or doing away with the Department of Energy and the EPA.

  10. Valissa

    “Politics, noun. A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage.” —Ambrose Bierce, The Devil’s Dictionary

    Political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind. — George Orwell

    “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.” —Groucho Marx

    “The whole aim of practical politics is to keep the populace alarmed and hence clamorous to be led to safety by menacing it with an endless series of hobgoblins, all of them imaginary.” — H.L. Mencken

    “When the doctrine of allegiance to party can utterly up-end a man’s moral constitution and make a temporary fool of him besides, what excuse are you going to offer for preaching it, teaching it, extending it, perpetuating it? Shall you say, the best good of the country demands allegiance to party? Shall you also say it demands that a man kick his truth and his conscience into the gutter, and become a mouthing lunatic, besides?” –Samuel Clemens 1887 (Mark Twain)

    The best political, social, and spiritual work we can do is to withdraw the projection of our shadow onto others. –Carl Jung

    1. jake chase

      Thanks for these. Apart from Jung (a self promoting clown, really) some of my favorite thinkers.

  11. Conscience of a Conservative

    Romney should , but can’t as he’s promised to be more hand’s off than Obama. The failure here in that is that even libertarians acknowledge a role for government in contract law. Breaking the law should be a no-brainer.

    1. alex

      Bottom line is that this has nothing to do w/ left vs. right. I know of no real person (i.e. not politicians) liberals or conservatives or whatever that are in favor of corruption, bribery and ignoring blatant criminal acts. These days I’d vote for anyone short of Attila the Hun if I thought they’d enforce the law.

  12. Tom

    Don’t think wall street wants to throw a sacrificial lamb at the legal system. They have, at all costs, got to keep their hands clean in the courtroom. They have got to wash laws away that affect the cleanliness of their hands. For if dirt is legally adjudicated to have found dirt on them – they will have let the doors open to the plethora of claims against them.
    They are still making their get away with the loot and have not entirely shut the gates behind them.
    I believe that Romney is the man sent to lock the doors and ensure the clean getaway. He proposes less regulation, less taxes (particularly less taxes on ill gotten gains). He uses tax havens to hide his loot with as little thread attached to give away it’s location. He made his loot by facilitating predatory lending. He has no plans for our country except to veto anything that would serve to bring justice down upon his lute-ocratic friends. He could care less about whom he judges to be incapable of taking care of themselves. Let the financial institutions, the banks, insurance companies distort the economy with their gambling after privatizing what the workers saved – anyone who falls into destitution or homelessness needs to learn to pick trash cans and, find some old boots for which the straps are used to pull oneself up upon.

  13. kootcoot

    Romney can’t go after this because he would be even more loathe to “persecute” the job creators. Remember that one of the Bu$h administration’s first acts was to shut down and cave on the MicroSoft monopoly prosecution. US firms only face prosecution in Europe, maybe they are more responsive to people who don’t just demonstrate, but effing well riot!

  14. Don Lowell

    There seems to be a certain amount of collusion between the partie’s. Just what we need, not.

    1. charles leseau

      Yes, exactly. The word “capture” seems to be pretty total these days.

      I’m not at all surprised that Romney wouldn’t use the idea of banker criminality and non-prosecution against Obama. Part of the systemic nature of all of this is never to admit that the banks did anything but maaaybe make a few mistakes. This message has to be broadcast to all comers of all political stripes.

  15. Strangely Enough

    Difficult to out-flank someone equally cynical/corrupt/dishonest, especially when your fortune depends upon it.

  16. steelhead23

    I doubt Romney is going to thank you for this advice Jeff. In fact, given the difficulties Ann Romney is having with all this prying into their private lives, I suspect she, if not he, hopes he loses the election.

    But, your suggestion does open an avenue of inquiry, I would love to pursue. What is the real reason for this “reluctance” to prosecute. Some have suggested that it is because Obama is corrupt – a sycophant to billionaires, hoping to cash-in after he leaves office. My suspicion is more pedestrian – he is afraid. He is afraid that if he prosecuted these criminals, the wheels would indeed come off. And I suspect those fears are fed by players inside and outside of Washington. Inside, its Geithner and his cronies, up to and including Ben Bernanke. Outside it is Dimon and company. Plus, I happen to believe that the U.S. Government has been involved in certain types of financial shenanigans (e.g. laundering drug money for covert aid, LIBOR rate setting, etc.) and if Obama pushed the big dogs into the corner, ungodly things would come out. And finally, I suspect Obama, who exudes extreme self-confidence is afraid because he really doesn’t understand finance very well and believes that coddling the criminals is better than prosecuting them and then trying to reconstruct a working financial system from their ashes.

    Perhaps such casting for motivations is a waste of time, for it hardly makes a difference – but, truth be told, knowing that the prez. is too scared to do the right thing would be useful information. It would suggest that we need to do more Occupying.

    1. YouDon'tSay?

      Well, there’s LOTS of reasons to be afraid, even for a Prez named Obama. Let me not be the first to suggest that some of them might even be of the good old-fashioned skullduggery type.

      Regardless. Occupy as solution? PLEASE! Gonna take a WHOLE lot more horsepower than that to overcome such an existential evil.

      In the end, I’m not sympathetic in the least to Obama’s plight. He’s a full grown rich boy who can take care of himself and his. Whatever cozy feather bed he made, I damn sure hope he’s comfortable. Cause the noose is definitely tightening either way.

    2. Susan the other

      I don’t think Romney has the stomach for this. But maybe he could enjoy an OBL snuff video as much as Hill and Barack. We are in full cold war mode. All the financiers and banksters are just apparatchiks. Romney is merely another entitled freeloader by comparison to the real goals of making NYC, London and Hong Kong the financial centers of the world; the US oil commissioner of the world; and all the big plans to make the planet safe for elite tax-free capitalism. And not much else. I don’t think Romney knows his butt from a hot rock. But that never stopped a presidential contender. I’d like to hear them both talk environmental clean-up. But that’s not on anybody’s agenda. These “debates” are a farce.

  17. YouDon'tSay?

    Perhaps sometime during the “debate” we’ll detect a gentlemen’s wink between the two “contenders,” seemingly innocuous, that will in fact be a somewhat less than covert acknowledgement between the two “men of ways and means” that it’s all in good fun. As in, the fix is in, and we both stand to win either way. As opposed to the 300 some odd million actual citizens who don’t. Never mind the several BILLION “others,” who by definition simply don’t count, who for sure won’t either. Power has it’s privileges.

  18. abelenkpe

    If Romney were to say he intends to prosecute wall street and protect main street everyone would just laugh. Romney IS Rich Uncle Pennybags from Monopoly the literal poster boy for predatory finance and disaster capitalism.

  19. YouDon'tSay?

    Romney should no doubt say a lot of things tonight, almost all of which he quite predictably won’t. No surprise there. What’s surprising is that anyone would post something on the internet that suggests otherwise.

    Prediction: Both “candidates” will stick to talking points, totally ignoring what the other has to say, and drift almost instantly into well rehearsed “messaging.” Neither will address anything of “substance” specifically – indeed, both will avoid it like the plague! – and in the end, both sides will declare clear, one-sided, “victory” across the board. Might as well any episode of AMC’s Mad Men for actual substance. Matter of fact, Knute IS Don Draper! Epiphany! Could THAT be where that series is heading? FUCK ME!

  20. ifthethunderdontgetya™³²®©

    It’s more important to the people who control the Republican party (and also control the Democratic party) that the notion of “Obama the Socialist” be claimed by the right, than to let the truth be told and possibly see Romney become President.

    Heads they win, tails they win bigger.

  21. LeonovaBalletRusse

    Jill Stein has been the Most Presidential tonight, when given the chance to speak as one of the Third Party candidates speaking in the Presidential Debate at – livestream – a first!

    Jill Stein gets better and better, she has what it takes. If Money With Guts were smart enough to back Jill Stein for President 2012, we’d see a Dark Horse win this race. Now THAT would be “Making History.”

    DR. JILL STEIN 2012: TO WIN!

    (Mr. Smart Money, Get Smarter.)

    1. Aquifer

      Yup – if only folks could get over their addiction to those blue jerseys …..

      Keep trying interventions …..

  22. Hugh

    Romney is as likely to go after Wall Street as pigs are to fly over frozen lakes in hell on a blue moon. It is as vanishingly small a possibility as Obama creating jobs, helping homeowners, and defending Social Security and Medicare. Nagunnahappen.

  23. jonboinAR

    Post debate remark: I think Obama got worked. Romney was the aggressor without coming off as a hot-head like McCain did in ’08. When Obama attacked, Romney accused him of lying. When Romney attacked, Obama looked at his shoes. Oh, dear.

  24. Timothy Gawne


    Both Romney and Obama are corrupt. Obama is a vile and disgusting whore to the rich and powerful. Romney is what Obama wants to be when he grows up. NEITHER OF THEM CARE. THE POINT IS THAT THEY ARE IN THE GAME. WIN OR LOSE, BOTH WILL WALK AWAY BILLIONAIRES. THEY DON’T REALLY CARE ABOUT WINNING! THEY JUST WANT TO STAY IN THE GAME.. DUH!!!!!!

  25. Shelly

    Add this RINO to the list duped voting for “change.”

    The Big-O lost his second term before the first began by rolling out the red carpet to the same economic stooges that got us into this mess.

    The collateral damage is many folks, especially the Gen Y’s and Milli’s, do not have any respect for justice, nor the rule of law. Tragic on many levels, not limited to politics as these same groups are so cynical they don’t participate in the political process. The system is nowhere more broke than failing to sustain itself.

    1. Tony Butka

      I just finished Connaughton’s THE PAYOFF in time for the debate. When it was over I reread his Epilogue, read this post, and reread his Epilogue.

      I felt like the debate was an award show for best acting in a Science Fiction movie. Game over, until this house of cards tanks again.


      1. Shelly

        Admittedly, I was remarking off the cuff out of personal experience and only just read a snippet of Connaughton’s epilogue from Amazon.

        One thing for sure is the breakdown is there – it is pervasive and worrisome among the aforementioned groups.

        Although it sounds dramatic, I can’t even think of Romney without the silver spoon, and how he got paid ten generations deep along with the rest of the Street selling everyone else’s kids to China and Mexico or killing the rest in the Middle East..

        Again, unsustainable.

  26. John

    Someone else said it best:

    There’s no way the Obama administration was going to send anyone to jail after bailing them out with trillions of dollars.

  27. brian

    The only person who could not make an “Obama is in the pocket of Wall Street” attack stick is Romney — a Wall Street outsouring, levergaed buy out, money grubber himself. I said a year ago that Obama must be hoping that Romney would get the nomination. Wall Street has insulated itself by playing both sides. And it’s all legal — Citizens United is just the whipped cream on the shit pie of corruption of our political system by money.

  28. different clue

    Since Romney, if elected, would continue Obama’s policy of refusing to prosecute or even investigate bad actors in the gang banker community, why would Romney make an issue out of Obama’s refusal to do so during the campaign?

    Or am I wrong about Romney?

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