Campaign Cash: Tea Party Vows to Block Campaign Finance Reform

by Zach Carter, Media Consortium blogger

Welcome to the final edition of Campaign Cash, which tracked political spending during this year’s midterm elections. Stay tuned for more reporting on money in politics from members of The Media Consortium. To see more stories on campaign funding, follow the Twitter hashtag #campaigncash.

Anonymous millionaires just helped elect dozens of ultraconservative congressional candidates, by pumping millions of dollars into national Tea Party organizations. And guess what’s at the top of the legislative to-do list for those same Tea Party groups? Blocking campaign finance reform legislation.

As Stephanie Mencimer explains for Mother Jones, one of the nation’s largest Tea Party organizations, the Tea Party Patriots, is already coming out guns-a-blazing against any lame duck effort to crack down on secret corporate spending in elections.

And with good cause. The Tea Party’s appeal, after all, is based on its populist, grassroots image. If anybody knew that secret right-wing millionaires were bankrolling the entire operation, the “movement” would lose its luster.

But whether reformers are able to force front-groups to disclose their donors or not, the broader effort to eliminate undue corporate influence from the political process will take years.

Welcome to the plutocracy

The Supreme Court’s decision in Citizens United v. Federal Elections Commission allowed corporations and deep-pocketed elites to spend unlimited amounts electing politicians of their choosing. So long as those expenditures are funneled through a front-group, nobody has to know who is buying an ugly attack ad or why. Instead ads are sponsored by groups with a innocuous-sounding names like “Americans for Prosperity” or “Americans for Job Security.” Nobody knows who ultimately foots the bill.

In organized crime, this process is called “money laundering.” And everyone is getting in on the game, from the Tea Party to Karl Rove to U.S. Chamber of Commerce. As Bill Moyers explains in this Boston University lecture carried by Truthout, it’s ravaging American democracy.

Rove, other conservative groups and the Chamber of Commerce have in fact created a “shadow party” … We have reached what … former Labor Secretary Robert Reich calls “the perfect storm that threatens American democracy: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work. We’re losing our democracy to a different system. It’s called plutocracy.”

That, ultimately, is what is at stake with campaign finance reform. Can democracy continue to serve as a check on elite power? Or will America simply dance to the tune played by the super-rich. Citizens United made an undemocratic mess of this year’s election—but the influence of corporate cash is not going to simply melt away. Without serious reforms, the very concept of American elections will become a quaint, naive relic of the past.

Wall Street wins big

And while the plutocracy plainly organized itself against Democrats in this election, democrats have not exactly been strangers to corporate largesse. As Laura Flanders emphasizes for GRITtv, while President Barack Obama occasionally offered rhetorical rebukes against the Wall Street establishment, so far as public policy was concerned, he rarely did anything to ruffle their feathers. Obama continued the Bush bailouts, praised the executives of firms would eventually be investigated for fraud as “savvy,” and aimed pretty low on financial reform. But as Flanders notes, all those favors didn’t end up helping either Obama or his party on Nov. 2:

Having soaked up the government’s largesse, those banksters repaid Obama by pouring millions of anonymous dollars into defeating Democrats.

It worked. The most vocal Wall Street critics in the House and Senate—Rep. Alan Grayson (D-FL) and Sen. Russ Feingold (D-WI) were bombarded with attack ads courtesy of the U.S. Chamber of Commerce. Now they’re gone, along with the Democratic majority in the House.

Last-ditch effort on campaign finance reform

As Jesse Zwick emphasizes for The Washington Independent, Congress can still limit the damage in the coming months before the officials elected last night take office. A modest law that would require corporations to disclose their political expenditures and force front-groups to publicly identify their donors would help limit the damage.

After that, as Moyers emphasizes, it’s a long, hard fight.

But wait! There’s more.

This post features links to the best independent, progressive reporting about the mid-term elections and campaign financing by members of The Media Consortium. It is free to reprint. Visit The Media Consortium for more articles on these issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

Weekly Audit: Foreclosuregate Hits Home

 

by Lindsay Beyerstein, Media Consortium blogger

Earlier this month, Bank of America (BOA), the country’s largest bank, announced a moratorium on foreclosures in all 50 states.

The bank promised not to sell any foreclosed homes or take any more delinquent borrowers to court until it had reviewed its potentially defective foreclosure process. Other major lenders soon announced that they too were suspending foreclosures in dozens of states. Why are the biggest banks in the country voluntarily calling for a time-out? It’s a hint that we’re facing a huge problem: The banks aren’t sure if they have the legal right to foreclose on millions of homes.

Here’s what’s new in foreclosuregate since the Audit took up the story last week. The Bank of America announced that it would resume some foreclosures on Oct. 25, having deemed its own methods sound. The stock market begged to differ. BOA’s stock fell over 5% on Thursday and other bank stocks also took a beating, as did mortgage bonds. This pattern indicates that investors are very worried about the effect of the foreclosure crisis on the health of the banks.

Rep. Alan Grayson (D-FL) is calling for a foreclosure moratorium under the new Financial Stability Oversight Council (FSOC), as Ellen Brown reports for Truthout. The FSOC has the power to preemptively break up any large financial institution that threatens U.S. economic security. Grayson wants a moratorium on all mortgages securitized between 2005 and 2008 until the FSOC can determine which foreclosures are valid and which are bogus.

The missing link

So, what kind of “defects” in the foreclosure process are we talking about? Fraud, basically.

Zach Carter of the Campaign for America’s Future explains to Chris Hayes of the Nation why Bank of America and other major lenders are in so much trouble: They are just administering loans for other lenders. You make your check out to the Bank of America, but the bank is just babysitting after the loan for the bondholders.

The real creditors are the investors who own bonds made up of pieces of many different mortgages, including yours. The bond gives the bondholder a share of the money that you and other borrowers pay each month.  If you don’t pay, BOA initiates foreclosure. If you’re late, BOA charges you fees.

However, the bank can’t just hire a foreclosure company to take your home away on a whim. The bank must first show proof that it is entitled to foreclose because you’ve defaulted on your mortgage in the form of a mortgage note. If you hold one of those toxic asset mortgages, there’s a good chance the bank doesn’t have the note.

As Dean Baker explains in Truthout, in many, if not most, cases, “liar loans” (mortgages issued with no proof of income or assets) have become given way to “liar liens” (foreclosures with no proof of default).

According to Carter, all the big banks have been hiring foreclosure mills to rubber-stamp their claims without checking. Unscrupulous foreclosure companies are admitting to “robo-signing,” i.e., foreclosing without even checking whether the bank’s claims were legit.

Foreclosuregate

According to Andy Kroll of Mother Jones, the Bank of America stands to lose up to $70 billion over what’s come to be known as “foreclosuregate.” A mortgage starts out with an originator, typically a bank or a mortgage broker. In the heyday of mortgage-backed securities, investment banks were buying up hundreds of thousands of mortgages, making them into mortgage-backed bonds, and selling them to investors.

Unfortunately, if the bank doesn’t have the note, who does? The mortgage originator may have gone bankrupt, many were fly-by-night operators that folded when the housing bubble burst. Many mortgages were bought and resold more than once before they found their way into a mortgage-backed bond.

So, the question is whether the bank really owned the mortgages it made into mortgage backed-securities and sold to individuals, pension funds, and other institutions. If not, the banks stand could be on the hook for selling assets they didn’t actually own to investors.

Moratorium now

The scandal affects so many mortgages that some lawmakers are calling for a nationwide moratorium on foreclosures until investigators can sort out who owns what once and for all. Rep. Edolphus Towns (D-NY) told Amy Goodman of Democracy Now! that Congress needs to stop banks from putting people out on the street until there is some way to differentiate between fraudulent foreclosures and justified ones:

And so, I just think that people who are saying that this is going to hurt—I think that it’s going to help, because once people gain confidence in the fact that they’re being treated fairly and that there’s no discrepancies in the records, then people will feel very comfortable in terms of trying to move forward. But until that happens, you’re always going to have these comments about the fact that that was not done right, it was done unfairly. And, of course, I think there’s enough here for us to stop and to pause and to say, let’s take a look here before we move forward. So a moratorium is definitely in order.

The Obama administration opposes the moratorium on the grounds that it would hurt the housing market and thereby slow the economy. Towns counters that what would really be bad for the economy is letting banks take people’s homes away without any semblance of due process. If the government doesn’t act to protect the innocent, foreclosuregate could shatter the confidence of potential home buyers. Would you want to invest in a house if you were afraid the bank could just take it away from you?

In AlterNet, Mike Lux argues that fraudulent foreclosures are one more assault on poor and middle class Americans. He argues that the banks are so used to being coddled by Washington that they’re counting on legislators to retroactively change the rules to protect them from the consequences of their own devious behavior.

At this point we don’t know what percentage of foreclosed-upon homes have simply been stolen by banks to pay bondholders, but we do know the problem is vast and systemic. The Obama administration is content to let the banks seize private property first and ask questions later. We need a moratorium to take stock and restore the rule of law.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

Only 4 Hours Left

- Bumped one last time. -N

Books close tonight at midnight EDT for the FEC’s second fiscal quarter. As the third quarter is traditionally the weakest for fundraising, this is our last best shot to show progressive strength before November. That’s why MyDD features eight candidates who are Going On Offense at ActBlue. We’ve got four Senatorial candidates, two Gubernatorial candidates, and two House candidates. 5 of the 8 are running for open seats and one is challenging a Repub incumbent. Please help by donating $5 or more to at least two of them - and if that's too much to ask, you can still share this post on Facebook and Twitter with the gadgets below!

If you’re a fan of MyDD on Facebook, you’ve seen our recent fundraising appeals for Alan Grayson, Jack Conway, Matt Dunne, and Bill White. I've also featured White (TX-GOV) and Paul Hodes (NH-Sen) in full posts of their own. While I have personal affinities for Hodes and Dunne, my two favorite races are KY-Sen and TX-Gov. These races hold both symbolic and practical importance. Winning in KY-Sen would keep Rand Paul out of office (not to mention that Conway was my favorite primary candidate), and winning in TX-Gov would allow us to undo the corrupt redistricting legacy of Tom DeLay once the 2010 census is complete. Plus, think about the message progressive victories in Texas and Kentucky in an allegedly anti-Democratic year would send!

Other Going On Offense candidates include Robin Carnahan in MO-Sen, Russ Feingold in WI-Sen, and Tom White in NE-02. For descriptions of these candidates, visit the ActBlue page, and please pick at least two to support. Even just $5 each means a +1 in the contributor list, and that goes a long way. Please give before tonight’s deadline.

Bill White (TX-Gov) $
Matt Dunne (VT-Gov) $
Jack Conway (KY-Sen) $
Robin Carnahan (MO-Sen) $
Paul Hodes (NH-Sen) $
Russ Feingold (WI-Sen) $
Alan Grayson (FL-08) $
Tom White (NE-02) $

Support Progressive Candidates Now

The end of the second fiscal quarter is rapidly approaching – less than a week to go. This is an important deadline for showing the strength of progressive candidates, especially since the next quarter is traditionally the weakest. Things are already off to a good start this year – for example, the Democratic nominee for Idaho Governor, Keith Allred, is outraising and underspending Repub incumbent Butch Otter – but we have to keep that momentum going.

Here are the 8 candidates from MyDD’s Going on Offense Act Blue page. I hope you’ll consider supporting at least two of them.

For Governor

Bill White (Texas) - Incumbent Texas Governor Rick Perry has a 35% approval rating. Former Houston Mayor Bill White is well known for his excellent handling of Hurricanes Katrina and Ike, greening Houston, and cutting taxes. The next Governor's term will include both census-based redistricting and a presidential election. The race is a toss-up. What more incentive to give do you need?

Matt Dunne (Vermont) - Spend just ten minutes with Matt Dunne and you'll realize that he has one of the deepest commitments to service and firmest grasps on public policy of anyone you’ve ever met. Matt, an executive at Google, is the former director of Americorps-VISTA and a former state senator. His resume and his values are the right choice for Vermont and for the Democratic Party as we seek to take this statehouse back.

For Senate

Jack Conway (Kentucky) – As state Attorney General, Jack Conway has taken over 40,000 images of child pornography out of circulation, helped take 90,000 child predators off MySpace, and led the largest drug bust in state history. As a candidate, he focuses on job creation, high school drop-out rates, Wall Street reform, and repealing DADT. Oh, and his opponent? That would be one Rand Paul, who has repeatedly said he doesn't support the 1964 Civil Rights Act and considers criticism of BP "un-American."

Robin Carnahan (Missouri) – They say that as Missouri goes, so goes the nation, and in 2010, this might be the closest thing to a true toss-up anywhere on the Senate map. Secretary of State Robin Carnahan, a Missouri resident who still runs her family's farm in Rolla, has cracked down on financial predators and helped guide her office into the 21 Century. Her opponent, Roy Blount, was one of Tom DeLay's top lieutenants during the Bush administration. The choice is clear.

Paul Hodes (New Hampshire) – Paul Hodes has been an outspoken, aggressive and unwavering proponent of real health care reform since his recent election to Congress. A true progressive advocate, Hodes refused to give up when things were at their darkest after Scott Brown won the MA-Sen seat, writing on the Huffington Post, “The Washington Republican Party and their tea-party allies would take us back to the Bush years… Now is not the time for Democrats to shy away from a fight, to back down or run away from who we are. There is too much at stake.”

Russ Feingold (Wisconsin) – Though not running for an open seat, no progressive movement would be complete with Senator Russ Feingold. Feingold was the lone vote against the now-notorious Patriot Act in 2001 and has been one of the most outspoken advocates for peace and justice in Iraq and beyond.

For House

Alan Grayson (Florida Eighth) – Congressman Grayson emerged as a true progressive hero in 2009 when he led the fight for a health care public option and debunked Republican lies on the House floor. He has since turned his attention to Wall Street reform and accountability, but is a top conservative target. Only the second Democrat to ever represent this district and still new enough to be a reformer, he needs our help.

Tom White (Nebraska 2nd) – For the first time in history, a state split its Electoral College vote when NE-02, which includes Omaha, cast its vote for Barack Obama. Let’s keep this district blue and send Lee Terry packing. Help state Sen. Tom White take his record of success on education, civil rights, and workplace discrimination to Congress. White is one of the DCCC’s 13 “red to blue” candidates.

Give now! Because seriously, is there any reason to wait?

The Grayson route

Via TP, Grayson believes we will get a reconciliation amendment to put onto the current form of HRC, to pass the bill. Chris Matthews replies that Grayson lives in some other reality-- the netroots (whatever that means):

I should also note that Alan Grayson sent out an email the other day with the title "OMG" on it, which caused me to open it up.

 

Diaries

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