Tuesday, May 8, 2012

Baggers of tea and fire join forces on financial fraud task force

You're likely to be hearing about an article published today by Newsweek/The Daily Beast suggesting that the Obama administration isn't going after Wall Street and claiming to know why.

Their opening salvo is to bring up all the old canards about campaign donations - although, at one point they have to admit that Wall Street has abandoned the Obama campaign and is "all in" for Romney.

But perhaps where they really grab the tea baggers and join forces with the fire baggers is in going after Attorney General Eric Holder - suggesting that he is merely in the pocket of Wall Street because he was at one point employed by Covington & Burling, a DC law firm that includes a white collar defense unit.

There are two authors who contributed to the article. One is Peter Boyer, who seems to have had a pretty standard career as a journalist. The other is Peter Schweitzer, who is a fellow at the conservative/libertarian think tank the Hoover Institute. Interestingly enough, the Breitbart crew (warning: wingnut link) claim him as a "contributing editor" in their article highlighting this story.

Overall I'd say that this recent piece has nothing to add to a story that is still unfolding. In order to make their case, the authors have to completely dismiss the recently created Mortgage Fraud Working Group chaired by NY Attorney General Eric Schneiderman. To try to accomplish that, they join the fire baggers is claiming that Schneiderman sold out.
Schneiderman, who is in the tough-guy mold of his predecessors, Eliot Spitzer and Andrew Cuomo, had been a leader of the state holdouts; now, Gecan feared, Schneiderman had been co-opted by the Chicago Way. "I'm from Chicago, I've seen this game played my whole life," he says.
Mike Gecan, who they are quoting, recently made headlines in the fire-bagging world for an article he co-authored titled: Obama's mortgage unit is AWOL. This piece quotes some of the same material from that article.
Nearly three months later, it is not clear what, if any, progress the "working group" has made. The unit was only promised 55 investigators, attorneys, and support staff--a tiny fraction of the resources afforded to similar groups investigating the S&L and Enron/WorldCom scandals--and it is not clear that even that commitment has materialized. "I think what happened is what usually happens: the administration rope-a-doped," says Gecan. "There's no office, there's no director, there's no staff, there's no space, there's no phone."
I guess Mr. Gecan never noticed that AG Schneiderman's office had totally refuted those charges the first time he made them.
I reached out to Schneiderman’s office in New York for a response, and it strongly disputed the notion the task force wasn’t active. “Given most investigatory matters are privileged and confidential, it is simply premature to draw conclusions about the Working Group’s scope and scale of inquiry,” said Danny Kanner, Schneiderman’s spokesman. “Op-eds and e-mail appeals from activists, while important contributions to the dialogue, do not constitute fact.”

Kanner said fifty attorneys, investigators and analysts across the country are already working on the task force and that hiring would continue as investigations progressed. He added that the offices of several state attorneys general are also coordinating with the working group.

A Department of Justice official confirmed those staffing numbers, and said that ten US Attorney offices were part of the effort and that more were expected to join as the investigations progress. The Department of Justice has also asked Congress for $55 million to expand staffing.

Finally, both Kanner and the Department of Justice said that the five co-chairs of the task force meet formally on a weekly basis and talk daily. This squares with what Richard Cordray, head of the Consumer Financial Protection Bureau told me last month—he said he “talks frequently” with Schneiderman about the investigation. Cordray is not a co-chair, though the CFPB is expected to play a potentially large role in the investigation.
So overall this recent article has nothing new to say and/or contribute. But it does once again demonstrate that what unites the baggers of tea and fire is their Obama Derangement Syndrome (ODS).

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