David Dayen: Administration Outside Review Group on NSA Includes Co-Designer of HAMP Peter Swire

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen

The President announced his “outside experts” for reviewing NSA surveillance policies last week, and everyone had a chuckle about the fact that the “outside experts” are apparently only “outside” in the sense that they no longer work for the President. An outside group featuring former OIRA head, rumored judicial appointment, longtime Obama friend and husband of the current UN Ambassador Cass Sunstein isn’t very outside.

But one nugget of information has gotten lost in all of this. Among the names on that list of four is Peter Swire. He held a technology-related job in the Clinton Administration, where he designed policies for wiretapping in the Internet age. And he does have a history of being critical of civil liberties overreach. He’s signed on to two amicus briefs asking the Supreme Court to review rulings of the Foreign Intelligence Surveillance Court revealed by Edward Snowden, particularly those allowed under Section 215 of the Patriot Act. No less than Marcy Wheeler pronounced herself “happy Swire’s on the list.” In short, he comes with pretty good credentials to be skeptical of the policies.

But what bothers me, and what makes discussion of this appropriate for this website, is what Swire specifically did for the Obama Administration in the first term. It had nothing to do with civil liberties. It had everything to do, ultimately, with showing what a “team player” he would be for the White House.

From early 2009 to the middle of 2010, Swire worked under Larry Summers at the National Economic Council, where he served as the White House “coordinator for inter-agency housing and housing finance policy.” This was perhaps the worst backwater of the Administration in the first term. And if you’re seeing the dates correctly, you get that he basically worked on designing and refining HAMP.

It’s not like Swire didn’t know that giving servicers discretion on things like loan modifications could easily backfire. Swire was a VICTIM of predatory servicing, as his testimony before the Senate Banking Committee in 2011 makes clear. Washington Mutual bought forced-place flood insurance for Swire’s home in Bethesda, Maryland in 2006, despite already having coverage (incidentally, the home was on top of a hill and not in a flood plain). Here’s his explanation:

The basic problem, beginning in early 2006, was that WaMu bought “force placed insurance” – duplicate flood insurance on my house despite the fact
that State Farm repeatedly sent them proof of coverage. In numerous instances, WaMu would impose a “late fee” on my family. We had automatic payment each month for our mortgage payment, and so we were never late on any payment. The WaMu practice, however, was to charge us for flood insurance without telling us, and then declare us “late” for the entire monthly mortgage payment. The next month would also be “late,” and subject to additional fees, because of the second month’s duplicate flood insurance fee.

Swire then thought he had resolved the situation once, only to get more late fees, until ultimately getting them discharged in the way a former government official can with relative ease, at least compared to the general population.

This actually reflects much WORSE on Swire’s work on HAMP. He actually was very knowledgeable about the complete failures of servicing, and he nonetheless had no qualms with designing a program giving servicers every opportunity to screw their customers once again. As inter-agency coordinator he didn’t have the ultimate say over the policy, but as a special assistant to the Preisdent he was certainly the White House’s eyes and ears on the project, and he absolutely could have made a difference if he chose to do so.

To be in that position all the way to August 2010, when the horrors of how servicers used the program as a predatory lending scheme were out in the open, you would have to willingly ignore reality, and sublimate any remorse arising from your role in that debacle. It’s not like Swire quit the NEC in a fit of pique, he just went back to teaching. And he’s left no paper trail of criticism of HAMP or any other Administration housing policy, at least that I’ve encountered. The guy passes himself off as a crusader against faulty servicing while working to design one of the great failures in servicing in history.

These are qualities that will serve him well as part of the outside review group on the NSA. In fact, being a good soldier is probably the main attribute. Swire’s knowledge and experience on civil liberties and privacy issues probably matters as much in this case as his knowledge and experience on housing and consumer protection issues meant to HAMP. He may have the grounds to speak out about surveillance; in isolated circumstances on the review board he may even do it. But he appears to have internalized the concept of omerta enough to do it in such a way that won’t fundamentally change anything that the intelligence community wants to do.

Like anything else, this is a guess, though one borne of observation. Anyone who worked on HAMP and failed to provoke changes or even raise so much as a public objection isn’t my top choice to provoke changes to a review of anything else.