Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Dodd urges tough stance against predatory lending By FRED LOVE

October 7, 2007

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Nye Lavalle
HOw about your fricking sevicer and Wall St dealers DoDo bird? I mean, that;s like going after the street dealers dealing cocaine and not the Calil Cartel or drug lords. You have to get at the source!
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4 justice now
Nye is right!  What about the damn corrupt Servicers and the Wall Street jackals, etc?


He advocated hefty fines or even jail time for lenders who exploit homeowners through adjustable interest rates, high-cost loans and inflated appraisals.


Give me a F’N break… most non-wealthy Americans could receive such a sentence for simply stealing a loaf of bread from the local grocery store, if they happen to anger the wrong people.
The prison time should fit the crime:
It should be a mandatory 20-30 year prison sentence (minimum) for all involved, plus they must provide complete restitution for all their victims. If they can’t find the money they stay in prison until they do.


My opinion only,



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Your right on Nye, Dodd is not going to draft a bill that would put his $5 million dollar contributers at risk!
Now that would be bill us victims could back!
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I came across this About Dobb it was posted in sept

Leading The News   
Contributors, hopes for ’08, pull at Dodd
September 26, 2007

Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, is facing a fight with corporate executives who have donated millions of dollars to his presidential campaign. 

Dodd is under growing pressure from Sens. Barack Obama (D-Ill.) and Hillary Rodham Clinton (D-N.Y.), his rivals for the Democratic presidential nomination, as well as Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, to write strict legislation regulating mortgage lenders at a time when nearly 2 million Americans face foreclosure on their homes.

Many economic experts blame lenders who made loans to borrowers with poor credit ratings who failed to understand that interest payments would balloon or that house prices might stall, leaving them with properties worth less than their debt.

Obama, Clinton, Frank and Sen. Charles Schumer (D-N.Y.) have called for stricter regulation of lenders who specialize in sub-prime loans to buyers who had difficulty obtaining loans at regular interest rates.

Dodd has kept quiet for much of this year on the need to pass legislation regulating mortgage lenders, an industry that has fiercely opposed past efforts by Congress to manage its business, say consumer advocates.

Dodd has been in a difficult position. He has raised millions of dollars for his presidential campaign from bankers deeply involved in the sub-prime market.

“He seemed more cautious about introducing legislation,” said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America, in reference to Dodd.

“He kept his powder dry on the need for new consumer-protection legislation until very recently,” Fishbein said.

Eleven of the 20 biggest contributors to Dodd’s presidential campaign are companies with significant financial interest in sub-prime lending and would likely fight efforts by Congress to regulate that market.

Employees at Citigroup gave Dodd’s campaign $147,000 through the first six months of the year, according to the Center for Responsive Politics, a nonpartisan group tracking presidential fundraising. Citigroup, which, according to the Center, is the second largest contributor to Dodd’s campaign, recently bought affiliates of Ameriquest Mortgage Company, a lender that consumer advocates have called one of most irresponsible contributors to the sub-prime crisis.

“Citigroup is in the process of buying the worst lender we have left: Ameriquest,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “Citigroup is buying what there is left of Ameriquest, its servicing platform. Those are the people who collect the payments from homeowners and who turn around and foreclose on you.”

Rheingold said Citigroup’s investment bank transformed many of the sub-prime loans into securities that were then bought by investors, creating the market incentive for lenders to pump out as many sub-prime loans as possible.

Dodd’s fourth-biggest contributor, the Royal Bank of Scotland, whose employees gave Dodd’s campaign $122,000 during the first half of 2007, also has a major interest in sub-prime lending. It owns Greenwich Capital Markets Inc., a prominent player in the sub-prime market.

“Greenwich has been involved at a number of levels in sub-prime lending, from extending warehouse lines of credit to buying and securitizing loans through their own shelf registrations with the SEC [Securities and Exchange Commission] for a number of [loan] originators,” said Kevin Byers, a forensic certified public accountant who specializes in transactional analysis of mortgage and real estate issues.

Bear Stearns, Dodd’s fifth-largest contributor, owns two large hedge funds in the Cayman Islands that filed for bankruptcy because of the sub-prime market meltdown. Bear Stearns employees gave Dodd’s campaign $120,000.

Goldman Sachs, American International Group, Merrill Lynch, Morgan Stanley, JP Morgan Chase & Co, UBS Americas and Bank of America are other companies that the Center for Responsive Politics has identified as Dodd’s biggest contributors and that have had big stakes in the sub-prime market.

Employees from those companies have given Dodd’s campaign $510,000 this year. He raised $2.2 million from securities and investment firms for his presidential campaign, far more than from any other industry. He has raised $750,000 from hedge funds, many of which have made a big business of selling sub-prime mortgage-backed securities.

Byers said even though sub-prime lending doesn’t seem profitable now, the market will change and many of the banks that have given to Dodd will have a stake in what Congress does.

“Any increased regulation would have a material impact or potential material impact on their sub-prime mortgage business,” he said.
Dodd broke his silence on the need for new legislation regulating lenders when Congress returned from its August recess. He unveiled a list of proposals that consumer advocates applauded.

“My bill will end prepayment penalties — which only exist in the sub-prime market, and which penalize homeowners for trying to do the right thing by refinancing their mortgage,” said Dodd in a Sept. 5 press release. “It will prohibit brokers and lenders from ‘steering’ homebuyers to a more costly loan. And it will make brokers responsible to the people who pay them and ban them from acting as free agents who play lenders and borrowers off against each other.”

Dodd’s announcement came a month after Clinton, his rival in the presidential race, announced in Derry, N.H., a plan to address mortgage-lending abuses.

Clinton proposed requiring mortgage brokers to disclose that their compensation rises with mortgage rates and fees; requiring federal registration for mortgage brokers; eliminating prepayment penalties on mortgage products; and requiring lenders to include the cost of taxes and insurance in the assessment of high-risk mortgages.

For his part, Obama has pushed legislation curbing lending practices since the 109th Congress. He reintroduced his Stop Fraud Act in April. The bill authorizes stiff penalties for mortgage fraud and guarantees aggrieved borrowers the right to sue creditors, a harrowing prospect for the mortgage industry and the investment firms that fund it.

One Senate Republican aide observed that Clinton and Obama threatened to upstage Dodd on the hottest political issue of the year under his jurisdiction as Senate Banking Committee chairman. Consumer advocates noted that Schumer, a member of the Senate Democratic leadership and a senior member of the Banking Committee, also introduced legislation offering strict rules for lending.

Frank outlined strict regulations for mortgage lenders soon after he took over as chairman of the Financial Services panel. In the last Congress, Frank also co-sponsored legislation with North Carolina Reps. Brad Miller (D) and Mel Watt (D) that consumer advocates described as tough rules for sub-prime lenders. 

“He’s come around to where he needs to be,” said Fishbein, of the Consumer Federation of America, in reference to Dodd’s recent call for legislation to reform lending practices. “Frank has been more outspoken going back into the last Congress.”

Fishbein said the verdict on whether Dodd is a strong defender of consumer interests will come in the months ahead.

“The proof will be in the pudding,” said Fishbein. “If he introduces a strong consumer-protection measure and moves on it, he will decide the cause of consumers is paramount.”

Link to site
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Great find!!  Its right on my point!
I was looking at the AMERICAN BANKERS ASSOCIATION, where LARRY LITTON JR is on the Board!! 
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you kwon  Gary wait I was just commenting to JB about this.Who can we trust if they are all geetting ther bucks from the lenders

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Who's in Dodd's Wallet?
 Employees at Citigroup gave Dodd’s campaign $147,000 through the first six months of the year, according to the Center for Responsive Politics, a nonpartisan group tracking presidential fundraising. Citigroup, which, according to the Center, is the second largest contributor to Dodd’s campaign, recently bought affiliates of Ameriquest Mortgage Company, a lender that consumer advocates have called one of most irresponsible contributors to the sub-prime crisis.

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on Ameriquest

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YouTube - Dodd Homeownership Policy Talk

That was 2 funny Smurf! LOL
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Me2 Well he explain everything well how the market is.But I still don't hear to much what will be don't for the victim that are in this mess now. Smurf

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That's a good question Smurf. If you find out let us know Please.

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You're right Nye the servicers and high risk lenders were set up as a firewall to protect
those at the top running the scam they are expandable. Under Dodd's plan heads can roll to appease the public and yet trillions of looted assets are never recovered.

Hillary has no business even commenting on this issue not only have the Clinton's profited greatly from financial and real estate fraud and let the taxpayers foot the bill for their escapades they helped pass much of the legislation that is allowing the crooked lenders servicers and insurance companies to operate.

There is play in football where they toss the ball back and forth so no-one knows who to tackle and that just what's going on here Democrats and Republicans alike.

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 Greg Collins I agree withyou.Smurf

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I don't think it would hurt to start with the employees that are telling us lies to keep us in arrears. They need to start arresting them for fraud. Maybe then they would think twice about lying to us and withholding information. I found out that in order to get information you need to write a Qualified Written Request. By law they have to answer within 60 days. That way if you do not get an answer they will at the very least be fined. Our BK lawyer told us that they are trying to get an amendment in the bankruptcy laws to help stop the bogus fees that they try to implement on us. He told us that they are all aware of the problem but the judges are reluctant to listen. They are making some headway. I live in Illinois and the process is slow but they have a meeting with the judge coming up in about 2 weeks. I so much hope they are starting to listen to us. I told the BK lawyer that I would be glad to sit in and speak for all of us that are going through this mess. He made a note of it and was going to ask the trustee if it would be of benefit for me to sit in. I am more than willing. Good luck to everyone going through this mess. I will keep reading and posting anything I know.

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I agree with you Vicki most of ms fraud is criminal and we shouldn't even be in civil court except for damages. For thousands of years the governments primary responsibility was to provide protection even feudal lords, kings and dictators at least did that for it's citizens against vandals, invaders and looters. Our government was the first to truly grant property rights for common citizens in the U.S. more than any other country protecting the citizens property should be job 1.
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Fundraiser's Legal Woes Dog Clinton Camp

Saturday, September 15, 2007

(09-15) 02:56 PDT WASHINGTON (AP) --

Norman Hsu was politician's dream who became a nightmare. He knew people, hosted fundraisers, solicited donations. And he was an unabashed fan of Hillary Rodham Clinton.

Now in disgrace, his role as one of Clinton's top money bundlers will dog him and her presidential campaign while law enforcement authorities investigate his business and political dealings.

Eager to sever her links to Hsu, the Clinton campaign this week returned $850,000 in contributions linked to his fundraising activities. But Hsu's troubles aren't over and the spotlight on his political connections won't recede easily.

Hsu is the latest poster boy for rogue fundraising, a man whose political shoulder rubbing reinvented him and then did him in. For Clinton, Hsu threatens to be an unwelcome reminder of the fundraising scandals that pursued her husband and the Democratic Party in the 1990s.

Joseph Birkenstock, a former chief counsel for the Democratic National Committee, said it would be unfair to link her presidential campaign to 12-year-old instances of money laundering and Lincoln Bedroom sleepovers for major Democratic donors.

"But given her last name," he said, "the bar is somewhat higher for her politically than it would be for others."

Though Clinton was by far the biggest beneficiary of his fundraising, Hsu touched many with his largesse. Even Manhattan District Attorney Robert Morgenthau, who is leading one investigation of Hsu, received $2,000 from Hsu during his last re-election campaign. His spokeswoman says the district attorney has put the money into an escrow account pending the outcome of the investigation.

Hsu sat on the board of trustees of The New School, whose president is former Sen. Bob Kerrey, D-Neb. He was co-chairman of a gala New York benefit last October in honor of the late Robert F. Kennedy. Bill Clinton, there to receive an award, thanked the evening's benefactors, "especially our friend Norman Hsu."

Now, the Manhattan prosecutor is investigating whether Hsu used a financing scheme to steal $40 million from Source Financing, an investment fund founded by one of the organizers of the 1969 Woodstock rock festival.

Law enforcement authorities say the FBI also is investigating whether Hsu used straw donors to contribute to political candidates, reimbursing them for their donations in violation of federal law.

Meanwhile, Hsu is in a Colorado county jail, held for skipping a court appearance in California on an outstanding fugitive warrant. Hsu pleaded no contest in 1992 to a felony charge stemming from what prosecutors said was a $1 million Ponzi scheme. He was expected to serve up to three years in prison, but fled California before he was sentenced and seemingly disappeared.

The Los Angeles Times revealed his fugitive status last month after The Wall Street Journal raised questions about his fundraising practices.

Hsu turned himself in on Aug. 31 in Redwood City, Calif., and posted the $2 million bail with a cashier's check. But he failed to show up in court for a Sept. 5 appearance. The following day he was discovered ailing in an Amtrak train, while worried acquaintances in New York fretted over a suicide note that bore his name.

The note arrived last week in the office of the Innocence Project, a legal group that helps prove prisoners' innocence through DNA testing. Innocence Project officials were so alarmed by the note — sent by FedEx — that they promptly notified the authorities.

With its dramatic twists and multiple prongs, Hsu's case has provided a steady diet of news stories over the past three weeks.

That the Clinton campaign — and other Democratic candidates — had failed to detect his status as a fugitive has prompted Clinton and her rival John Edwards to announce that they will now conduct criminal background checks on their fundraisers.

Federal law permits donors to give only $2,300 to candidates for each election. But in a presidential campaign where candidates are raising millions and forgoing public financing, fundraisers who can solicit and bundle money for candidates are highly prized.

"It is surprising to me, given the fact that cumulatively the presidential campaigns have raised in excess of $250 million dollars, to have only one individual rise to the top as a problem," said Paul W. Houghtaling, a political finance expert who was hired by the DNC to set up a compliance system after the 1996 scandals.

Jenny Backus, a Democratic consultant not affiliated with any campaign, predicted more campaigns would encounter their own fundraising troubles.

"This campaign cycle is so awash in money and people are raising money at such a rapid pace, I don't think that there is just one Norman Hsu out there and I don't think this is going to be an issue that hits just one party," she said.

In returning the money to donors, the Clinton campaign said donors could contribute again if they demonstrate that the money is coming from their own funds. This week, Clinton told reporters, "I believe that the vast majority of those 200-plus donors are perfectly capable of making up their own minds about what they will or won't do going forward."

How much of the money Clinton can recoup remains to be seen.

"I'd be surprised if they get much of that money back," said Birkenstock, the former DNC counsel. "The feeling is, if it was not good enough before, why is it good enough now?"

Houghtaling predicted only 10 percent of the donors would contribute again. He said the Clinton camp could have simply sent letters to donors asking them to verify that the money came from their own funds, returning money that could not be justified.

"But they created more of a controversy by summarily returning $850,000 without asking any questions," he said.

John Catsimatidis, a longtime Clinton fundraiser, said many of Hsu's donors are probably legitimate contributors and said he would not have returned the money.

"I would have probably put it in escrow someplace."


Associated Press Writers Pat Milton in New York and Paul Elias in San Francisco contributed to this report.

(This version CORRECTS Joseph Birkenstock's title to former chief counsel for the Democratic National Committee)
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The Nation" editors continued to observe "There is nothing evenhanded about our presidential selection process. The system generally regards as most 'serious' those candidates who can raise the most money, while it excludes those who offer radical alternatives, even if they hold views that more accurately reflect those of the American people. ... Perhaps the congressman is too idealistic to match our strangled definitions of a nominee or a President."

Speaking of our misplaced emphasis on money-raising to indicate viable presidential candidacy, did you miss, as I did, the report by "Business Week" magazine that an extraordinary presidential primary of another kind has been continuing in recent weeks in an important venue that isn't even a state? Yep, you guessed it -- Wall Street. Big surprise, right?

According to the respected business journal, Wall Street bigwigs have been meeting with top presidential candidates from both parties "to measure the candidates' ability to make smart decisions in times of uncertainty, a trait bankers and traders prize in themselves."

These are closed-door sessions without any media present inside huge investment banks, finance houses, hedge funds and other powerful monetary institutions in Manhattan.

Bear Stearns, for instance, has already "summoned seven major candidates" from both parties, including Mitt Romney, Hillary Clinton, Rudy Giuliani, Barack Obama and Fred Thompson, to its midtown headquarters "for Q & A sessions with its managing partners."

One can only imagine the questions ... and the answers.

And the promises.

As "The Hightower Lowdown" -- one of my favorite political newsletters -- presciently asks, "Aren't these the same people who brought us Enron, NAFTA, offshoring, exorbitant credit card fees, oil dependency, pension collapses, and other 'smart decisions'? Indeed, isn't Bear Stearns itself butt-deep in the ongoing subprime mortgage disaster? Why should anyone listen to them?"

Yes, yes, I know -- it is extremely unreasonable to expect any viable candidate for president of the United States to compete without serious financial backing, including such support from portions of Wall Street. But there is something quietly alarming about learning many of the people we're considering elevating to the nation's chief executive position are sneaking off to the posh executive chambers of lower Manhattan to plead for money and at the same time make who-knows-what secret promises about how they will "make smart decisions in times of uncertainty" as "Business Week" so calmly puts it.

Aren't our "times of uncertainty" in this national era pretty much 24-7 and unlikely to depart from that description anytime soon? I can't help thinking the real underlying question for candidates down on Wall Street -- spoken or unspoken -- was "Will you do our bidding?" on issues that involve enrichment of the Already Rich.

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News Sunday, Oct 28, 2007

Posted on Sun, Oct. 28, 2007

Payday lenders fill war chests



Industry fighting increased regulation, economic downturn:

• Advance America, the Spartanburg-based payday lending leader, announced this week it is preparing for legislative fights in several states, including South Carolina, and that it is growing at a slower rate than in 2006.

• This year, the company announced it was closing 103 branches nationally.

• The company has pulled out entirely from Georgia and North Carolina, and is considering the same move in Pennsylvania.

• Eleven states enacted payday lending legislation this year, in many cases lowering the interest rates or fees lenders can charge.

SOURCES: The State;; National Conference of State Legislatures

Donations plentiful to candidates in midst of possible predatory lending regulation

Payday lenders have given nearly $64,000 to the 2008 candidates for president, with a vast majority of that going to Democrats, many of whom have accused the industry of unfair lending practices.

In addition, U.S. lawmakers from South Carolina, as well as key state lawmakers, have taken thousands in contributions from payday lenders, their employees, political action committees or trade associations.

The contributions come as the industry and its largest company, Spartanburg-based Advance America, Cash Advance Centers Inc., face three S.C. lawsuits over accusations of predatory lending and violations of consumer protection laws.

Payday lending critics also are trying to rally congressional support for federal legislation that would cap the interest rates that payday lenders can charge.

Susan Lupton, a senior policy associate with the Center for Responsible Lending in Raleigh, said payday lenders fear Congress soon will act. After the 2006 passage of legislation that capped interest rates at 36 percent for payday loans to members of the military, the industry is worried lawmakers could try to set a similar cap across the industry, she said.

“I’m quite sure the last thing they want is for that interest cap to be extended to other groups,” Lupton said. “If they’re giving money to national candidates, they want to be sure they’re hedging their bets.”

Democratic presidential candidates Hillary Clinton, a U.S. senator from New York, and New Mexico Gov. Bill Richardson each has received more than $22,000 from payday lending sources, more than any other candidates during the campaign.

Among the S.C. congressional delegation, Republican U.S. Sen. Lindsey Graham has received $25,000 and Republican U.S. Sen. Jim DeMint $9,600 since 2006. Overall, the delegation received more than $53,000 since 2002.

In the S.C. General Assembly, Senate Majority Leader Harvey Peeler, R-Cherokee, received a pair of $1,000 contributions to top the list after the first nine months of 2007.

Lupton and others accuse payday lenders of preying on the poor by charging exorbitant interest rates and fees that often trap customers into a cycle of debt.

The industry disputes those arguments. The Community Financial Services Association, a payday lending trade association, says in a “myth vs. reality” page on its Web site that its critics intentionally mislead policy makers and the public.

For example, critics say payday loans often charge a 390 percent annual percentage rate. But, the association argues, its loans are not annual loans. They typically are 14-day loans that charge 15 percent interest for that period.

“We’re being targeted, yeah,” said Steven Schlein, a spokesman for the association.

The association in July hired S.C. Sen. Tommy Moore, the 2006 Democratic gubernatorial candidate, to be its executive vice president. Moore resigned his Senate seat to take the job. Moore’s job, in part, is to dispel “misperceptions about the service” and to further the group’s “efforts to promote responsible regulation,” Moore said after taking the job.


Candidates are getting campaign contributions from the industry, Schlein said, in part because of efforts to tighten state and federal regulations.

“The industry has a lot of issues before state legislatures and before Congress, and like any industry, they make contributions,” Schlein said. “But there are a lot of individuals in the industry who have a long history of political activity.”

At the top of that list is Billy Webster, co-founder of Advance America. Webster worked in the Clinton administration and has long supported Hillary Clinton in her bid for the White House.

New Mexico Gov. Richardson, also seeking the Democratic nomination, was Bill Clinton’s ambassador to the United Nations and secretary of Energy.

Of the nearly $70,000 in industry contributions to presidential candidates, more than 35 percent came from Webster or members of his family. Another $14,000 came from George Dean Johnson, the other co-founder of Advance America, or his business interests.

Advance America spokesman Jamie Fulmer said the company is not unlike others that “support candidates and also educate folks about the values of our product.”

“There’s not any specific formula behind that,” Fulmer said. “Billy Webster has been active in the political process long before Advance America was even a company.”

Fulmer said it’s unfair to paint the contributions as attempts to derail legislation.

“Tying one to the other, while making it a better story, you have to put it in the full context: Billy has always been active politically,” Fulmer said.

But state Sen. John Hawkins, R-Spartanburg, said contributions typically come with strings attached.

“Every candidate has to respond and deal with contributions in their own way and ... make sure they don’t let the contributions influence their actions,” he said. “But, in real life, you know, I know, the money has an influence.”

Hawkins has not received payday lending money.


Hawkins also is suing the industry.

He and state Sen. Vincent Sheheen, D-Kershaw, have filed twin lawsuits against Advance America and other payday lenders on behalf of a Myrtle Beach couple who claim they were unable to pay back their payday loan and the lenders should have known it.

In the other lawsuit, former U.S. Attorney Pete Strom was joined by 13 state lawmakers in suing Advance America and other companies. They accuse the companies of violating consumer protection laws.

Of those attorney-lawmakers, two — Sen. David Thomas, R-Greenville, and Sen. Brad Hutto, D-Orangeburg — received contributions from payday lenders.

Thomas took $1,000 from World Acceptance Corp. of Greenville in April and Hutto took $1,000 from QC Holdings of Overland Park, Kan., in July.

Hawkins chaired the Senate Judiciary subcommittee that heard testimony this year on his bill to tighten payday lending regulations. The bill died after it was watered down by the industry’s allies.

“The payday lending industry has become the new video poker in South Carolina, and they are determined to exert as much influence as they can in the political process, and evidence of that is that this legislative year they successfully killed any kind of reasonable regulation,” Hawkins said.

Key members of the S.C. House and Senate have received more than $15,000 in contributions from payday lenders so far this year. The maximum contribution to a state legislator is $1,000.

Hawkins’ lawsuit targets Advance America, Cash Advance Centers of South Carolina, Carolina Payday Loans, Check into Cash of South Carolina, Check N Go of South Carolina and Local Cash Advance of South Carolina.

Fulmer, the Advance America spokesman, said the lawsuits are frivolous, adding that his company follows the law.

“We certainly don’t take the accusations lightly,” Fulmer said. “We operate a legal and regulated business in the state, and we’re going to continue to defend our business practices in the courtroom and intend to do so on the merits of the case.”


For the candidates for president, the issue creates a potential conflict.

Many of the Democratic candidates have railed against payday lenders and other industries that target lower-income people who need non-traditional forms of credit, such as subprime mortgages.

Former U.S. Sen. John Edwards of North Carolina, an outspoken critic of payday lenders, has said if elected he would pursue tighter restrictions on the industry. Edwards, an S.C. native, has not received campaign contributions from the industry in this campaign, although he did when he first ran in 2004.

(Edwards also has been criticized for his ties to a subprime lender that foreclosed on S.C. homes.)

Richardson pushed for new payday lending regulations in New Mexico, although he later was criticized by fellow Democrats who accused him of watering down earlier, stronger proposals.

Efforts to reach Richardson’s campaign were unsuccessful.

Clinton, too, has worked to limit payday lenders’ influence, said Zac Wright, her S.C. spokesman.

“Hillary has been a leader in the Senate on cracking down on payday lending abuses,” Wright said. “She opposed the weakening of the Community Reinvestment Act that would’ve led to an increase in payday loan stores in low-income neighborhoods. She called for hearings on payday loans and military families, and pushed the FDIC to close a loophole allowing for payday loans.”

Still, the Center for Responsible Lending would just as soon the candidates talk the talk but not take the money, Lupton said.

“I’d rather any candidate who gets this money say, ‘Oh, this is too toxic to take. I’m going to give it back.’”

Reach Gould Sheinin at (803) 771-8658.

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Presidential Hopefuls, Congress Toss The Housing Hot Potato

Oct. 12, 2007 (Investor's Business Daily delivered by Newstex) --

The meltdown in subprime loans is a made-for-TV political extravaganza debuting just in time for election season -- especially as more Americans keep losing their homes.

At least, that's the way economist David Shulman sees it. He expects "show trials" before Democratic congressional committees to begin this winter, replete with testimony from distressed homeowners.

But so far the gloves have largely stayed on as regulators and lawmakers grapple with ways to help an estimated 2 million U.S. homeowners who have lost or are about to lose their homes -- not to mention fix mortgage lending excesses that led to today's debacle.

"A lot of it will be bipartisan, at least initially," said Shulman, senior economist with the UCLA Anderson Forecast. "Both parties will try to show how sensitive they are to homeowners."

The first stand-alone bill to address the mortgage crisis easily breezed through the House last month, expanding the ability of the Federal Housing Administration (FHA) to help struggling subprime borrowers.

The bill would give more power to the FHA, the federally insured loan program known for affordable fixed-rate mortgages. It would let the FHA give subprime borrowers lower rates and better terms. A Senate committee has passed a companion bill with a lower loan limit.

"The FHA reform bill has good bi-partisan support," said Kurt Pfotenhauer, senior vice president of government affairs for the Mortgage Bankers Association. He says the FHA is the only real alternative at the moment for subprime borrowers now that the "private-label subprime market has disappeared."

The Bush administration supports making it easier for the FHA to refinance adjustable rate mortgages -- though not as easy as the Democrats would like.

Another bill giving borrowers relief passed unanimously in the House last week by voice vote and also got support from President Bush. It would waive taxes on mortgage debt forgiven as part of a mortgage workout.

This House bill also extends deductibility of mortgage insurance, making loans cheaper for those who have little equity in their homes or can't put down 20%. Political observers expect the Senate to approve the bill.

The problem is, how many lenders will rework subprime terms? Only 1% of reset subprime adjustable rate mortgages were modified by lenders and servicers earlier this year, according to a recent report from Moody's.

Attorneys general and bank regulators in 10 states have joined forces to push mortgage loan officials to rework loans to stave off foreclosures.

Also, Treasury Secretary Henry Paulson on Wednesday announced that 11 of the largest mortgage servicers, plus mortgage counselors, investors and trade groups, have formed a coalition to improve outreach to struggling homeowners.

"Their partnership, called Hope Now, has put together an aggressive plan to reach more homeowners and help them find a way to stay in their homes," Paulson said in prepared remarks.

Meanwhile, Democrats have pushed for higher limits on mortgages held by federally chartered mortgage finance companies Fannie Mae (NYSE:FNM PRJ) (NYSE:FNM PRF) (NYSE:FNM PRI) (NYSE:FNM PRL) (NYSE:FNM PRH) (NYSE:FNM PRN) (NYSE:FNM PRM) (NYSE:FNM) FNM and Freddie Mac (NYSE:FRE) FRE.

The Bush administration has signaled it would agree, at least temporarily and under tighter oversight, to let Fannie and Freddie deal in "jumbo" loans somewhat above the current $417,000 limit.

But the honeymoon might end as new anti-predatory bills sponsored by Democrats are introduced. The bills are still being fine-tuned by the offices of Massachusetts Rep. Barney Frank and Connecticut Sen. Christopher Dodd.

Frank heads up the House Financial Services Committee and Dodd, who is also a presidential candidate, is chairman of the Senate Banking Committee.

Their bills are already drawing fire.

"We've seen outlines," said Pfotenhauer of the Mortgage Bankers Association, a powerful lobby for the mortgage industry. "We're skeptical. We think there is a need for uniform consumer protection but without limiting mortgage credit and availability."

Frank's bill is expected to mandate higher standards for all lenders, possibly under the supervision of federal regulators, and hold investors in mortgage-backed securities more accountable.

Mortgage brokers often get higher fees from subprime business. But these two bills would likely prohibit brokers from steering customers into subprime loans if they qualify for lower interest conventional loans. Other measures might try to eliminate prepayment penalties on at least some subprime loans. Such penalties make it hard for homeowners to refinance their high-interest mortgages.

Some lawmakers from both parties advocate licensing mortgage brokers on a national level so that they're made accountable for advice, like licensed stockbrokers.

Dodd has called on Bush to appoint a special White House adviser to focus solely on mortgage issues, and he is not the only Democratic hopeful who has made mortgage reform a platform issue.

One measure Hillary Clinton has proposed is a $1 billion fund to help borrowers avoid foreclosure.

Barack Obama's "Stop Fraud Act" would provide a federal definition of mortgage fraud. It would create criminal penalties and raise law enforcement funding -- not exactly a solution favored just by Democrats.

GOP presidential candidate John McCain, for example, favors punishing unethical mortgage brokers, says his director of economic policy Douglas Holtz-Eakin. McCain also is concerned that mortgage brokers are not "appropriately licensed," Holtz-Eakin says.

Only seven states let homeowners pursue action against unscrupulous lenders for some level of mortgage liability, according to the Center for Responsible Lending. The states are New Jersey, North Carolina, New Mexico, New York, Illinois, Massachusetts and Rhode Island.

In California, where numerous homeowners are in danger of losing their homes as their interest rates adjust higher, the governor said he will sign two state Senate bills designed to make appraisers and mortgage lenders toe an ethical line in their business practices.

Democratic presidential candidate John Edwards has made "fairness in lending" one of the centerpieces of his campaign. He wants a new national law to prohibit certain mortgage abuses such as prepayment penalties. He also proposes a national rescue fund and wants bankruptcy laws rewritten to help homeowners with excessive mortgage debt.

Sides are already drawn on a controversial bill that would change or eliminate a provision in Chapter 13 of federal bankruptcy law. The provision prevents courts from modifying or forgiving debt on certain collateralized subprime loans on primary residences, forcing those seeking bankruptcy protection to still make payments under existing terms, onerous as those terms might be.

Homeowner advocates favor dropping the Chapter 13 provision. Opponents on the lenders' side claim a change to the law would undermine mortgage markets and drive up interest rates for borrowers.

Unlike their Democratic rivals, GOP presidential candidates haven't made the subprime issue a visible part of their platforms. Perhaps they're waiting for the right moment.

Said McCain's economic adviser Holtz-Eakin: "We've got the Bush administration and the FHA pushing. We've got the regulatory agencies pushing. And there are lots of nonprofits trying to help borrowers work through this," he said. "We'll see if that's enough."

Newstex ID: IBD-0001-20187331

Originally published in the October 12, 2007 version of Investor's Business Daily.

Copyright (c) 2007, Investor's Business Daily, Inc. All rights reserved. This article is protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Investor's Business Daily, Inc. You may not alter or remove any trademark, copyright or other notice from copies of the content.

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How Bush's grandfather helped Hitler's rise to power

Rumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today's president

Ben Aris in Berlin and Duncan Campbell in Washington
Saturday September 25, 2004
The Guardian

George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.

The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.

His business dealings, which continued until his company's assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.

The evidence has also prompted one former US Nazi war crimes prosecutor to argue that the late senator's action should have been grounds for prosecution for giving aid and comfort to the enemy.

The debate over Prescott Bush's behaviour has been bubbling under the surface for some time. There has been a steady internet chatter about the "Bush/Nazi" connection, much of it inaccurate and unfair. But the new documents, many of which were only declassified last year, show that even after America had entered the war and when there was already significant information about the Nazis' plans and policies, he worked for and profited from companies closely involved with the very German businesses that financed Hitler's rise to power. It has also been suggested that the money he made from these dealings helped to establish the Bush family fortune and set up its political dynasty.

Remarkably, little of Bush's dealings with Germany has received public scrutiny, partly because of the secret status of the documentation involving him. But now the multibillion dollar legal action for damages by two Holocaust survivors against the Bush family, and the imminent publication of three books on the subject are threatening to make Prescott Bush's business history an uncomfortable issue for his grandson, George W, as he seeks re-election.

While there is no suggestion that Prescott Bush was sympathetic to the Nazi cause, the documents reveal that the firm he worked for, Brown Brothers Harriman (BBH), acted as a US base for the German industrialist, Fritz Thyssen, who helped finance Hitler in the 1930s before falling out with him at the end of the decade. The Guardian has seen evidence that shows Bush was the director of the New York-based Union Banking Corporation (UBC) that represented Thyssen's US interests and he continued to work for the bank after America entered the war.


Bush was also on the board of at least one of the companies that formed part of a multinational network of front companies to allow Thyssen to move assets around the world.

Thyssen owned the largest steel and coal company in Germany and grew rich from Hitler's efforts to re-arm between the two world wars. One of the pillars in Thyssen's international corporate web, UBC, worked exclusively for, and was owned by, a Thyssen-controlled bank in the Netherlands. More tantalising are Bush's links to the Consolidated Silesian Steel Company (CSSC), based in mineral rich Silesia on the German-Polish border. During the war, the company made use of Nazi slave labour from the concentration camps, including Auschwitz. The ownership of CSSC changed hands several times in the 1930s, but documents from the US National Archive declassified last year link Bush to CSSC, although it is not clear if he and UBC were still involved in the company when Thyssen's American assets were seized in 1942.

Three sets of archives spell out Prescott Bush's involvement. All three are readily available, thanks to the efficient US archive system and a helpful and dedicated staff at both the Library of Congress in Washington and the National Archives at the University of Maryland.

The first set of files, the Harriman papers in the Library of Congress, show that Prescott Bush was a director and shareholder of a number of companies involved with Thyssen.

The second set of papers, which are in the National Archives, are contained in vesting order number 248 which records the seizure of the company assets. What these files show is that on October 20 1942 the alien property custodian seized the assets of the UBC, of which Prescott Bush was a director. Having gone through the books of the bank, further seizures were made against two affiliates, the Holland-American Trading Corporation and the Seamless Steel Equipment Corporation. By November, the Silesian-American Company, another of Prescott Bush's ventures, had also been seized.

The third set of documents, also at the National Archives, are contained in the files on IG Farben, who was prosecuted for war crimes.

A report issued by the Office of Alien Property Custodian in 1942 stated of the companies that "since 1939, these (steel and mining) properties have been in possession of and have been operated by the German government and have undoubtedly been of considerable assistance to that country's war effort".

Prescott Bush, a 6ft 4in charmer with a rich singing voice, was the founder of the Bush political dynasty and was once considered a potential presidential candidate himself. Like his son, George, and grandson, George W, he went to Yale where he was, again like his descendants, a member of the secretive and influential Skull and Bones student society. He was an artillery captain in the first world war and married Dorothy Walker, the daughter of George Herbert Walker, in 1921.

In 1924, his father-in-law, a well-known St Louis investment banker, helped set him up in business in New York with Averill Harriman, the wealthy son of railroad magnate E H Harriman in New York, who had gone into banking.

One of the first jobs Walker gave Bush was to manage UBC. Bush was a founding member of the bank and the incorporation documents, which list him as one of seven directors, show he owned one share in UBC worth $125.

The bank was set up by Harriman and Bush's father-in-law to provide a US bank for the Thyssens, Germany's most powerful industrial family.

August Thyssen, the founder of the dynasty had been a major contributor to Germany's first world war effort and in the 1920s, he and his sons Fritz and Heinrich established a network of overseas banks and companies so their assets and money could be whisked offshore if threatened again.

By the time Fritz Thyssen inherited the business empire in 1926, Germany's economic recovery was faltering. After hearing Adolf Hitler speak, Thyssen became mesmerised by the young firebrand. He joined the Nazi party in December 1931 and admits backing Hitler in his autobiography, I Paid Hitler, when the National Socialists were still a radical fringe party. He stepped in several times to bail out the struggling party: in 1928 Thyssen had bought the Barlow Palace on Briennerstrasse, in Munich, which Hitler converted into the Brown House, the headquarters of the Nazi party. The money came from another Thyssen overseas institution, the Bank voor Handel en Scheepvarrt in Rotterdam.

By the late 1930s, Brown Brothers Harriman, which claimed to be the world's largest private investment bank, and UBC had bought and shipped millions of dollars of gold, fuel, steel, coal and US treasury bonds to Germany, both feeding and financing Hitler's build-up to war.

Between 1931 and 1933 UBC bought more than $8m worth of gold, of which $3m was shipped abroad. According to documents seen by the Guardian, after UBC was set up it transferred $2m to BBH accounts and between 1924 and 1940 the assets of UBC hovered around $3m, dropping to $1m only on a few occasions.

In 1941, Thyssen fled Germany after falling out with Hitler but he was captured in France and detained for the remainder of the war.

There was nothing illegal in doing business with the Thyssens throughout the 1930s and many of America's best-known business names invested heavily in the German economic recovery. However, everything changed after Germany invaded Poland in 1939. Even then it could be argued that BBH was within its rights continuing business relations with the Thyssens until the end of 1941 as the US was still technically neutral until the attack on Pearl Harbor. The trouble started on July 30 1942 when the New York Herald-Tribune ran an article entitled "Hitler's Angel Has $3m in US Bank". UBC's huge gold purchases had raised suspicions that the bank was in fact a "secret nest egg" hidden in New York for Thyssen and other Nazi bigwigs. The Alien Property Commission (APC) launched an investigation.

There is no dispute over the fact that the US government seized a string of assets controlled by BBH - including UBC and SAC - in the autumn of 1942 under the Trading with the Enemy act. What is in dispute is if Harriman, Walker and Bush did more than own these companies on paper.

Erwin May, a treasury attache and officer for the department of investigation in the APC, was assigned to look into UBC's business. The first fact to emerge was that Roland Harriman, Prescott Bush and the other directors didn't actually own their shares in UBC but merely held them on behalf of Bank voor Handel. Strangely, no one seemed to know who owned the Rotterdam-based bank, including UBC's president.

May wrote in his report of August 16 1941: "Union Banking Corporation, incorporated August 4 1924, is wholly owned by the Bank voor Handel en Scheepvaart N.V of Rotterdam, the Netherlands. My investigation has produced no evidence as to the ownership of the Dutch bank. Mr Cornelis [sic] Lievense, president of UBC, claims no knowledge as to the ownership of the Bank voor Handel but believes it possible that Baron Heinrich Thyssen, brother of Fritz Thyssen, may own a substantial interest."

May cleared the bank of holding a golden nest egg for the Nazi leaders but went on to describe a network of companies spreading out from UBC across Europe, America and Canada, and how money from voor Handel travelled to these companies through UBC.

By September May had traced the origins of the non-American board members and found that Dutchman HJ Kouwenhoven - who met with Harriman in 1924 to set up UBC - had several other jobs: in addition to being the managing director of voor Handel he was also the director of the August Thyssen bank in Berlin and a director of Fritz Thyssen's Union Steel Works, the holding company that controlled Thyssen's steel and coal mine empire in Germany.

Within a few weeks, Homer Jones, the chief of the APC investigation and research division sent a memo to the executive committee of APC recommending the US government vest UBC and its assets. Jones named the directors of the bank in the memo, including Prescott Bush's name, and wrote: "Said stock is held by the above named individuals, however, solely as nominees for the Bank voor Handel, Rotterdam, Holland, which is owned by one or more of the Thyssen family, nationals of Germany and Hungary. The 4,000 shares hereinbefore set out are therefore beneficially owned and help for the interests of enemy nationals, and are vestible by the APC," according to the memo from the National Archives seen by the Guardian.


Jones recommended that the assets be liquidated for the benefit of the government, but instead UBC was maintained intact and eventually returned to the American shareholders after the war. Some claim that Bush sold his share in UBC after the war for $1.5m - a huge amount of money at the time - but there is no documentary evidence to support this claim. No further action was ever taken nor was the investigation continued, despite the fact UBC was caught red-handed operating a American shell company for the Thyssen family eight months after America had entered the war and that this was the bank that had partly financed Hitler's rise to power.

The most tantalising part of the story remains shrouded in mystery: the connection, if any, between Prescott Bush, Thyssen, Consolidated Silesian Steel Company (CSSC) and Auschwitz.

Thyssen's partner in United Steel Works, which had coal mines and steel plants across the region, was Friedrich Flick, another steel magnate who also owned part of IG Farben, the powerful German chemical company.

Flick's plants in Poland made heavy use of slave labour from the concentration camps in Poland. According to a New York Times article published in March 18 1934 Flick owned two-thirds of CSSC while "American interests" held the rest.

The US National Archive documents show that BBH's involvement with CSSC was more than simply holding the shares in the mid-1930s. Bush's friend and fellow "bonesman" Knight Woolley, another partner at BBH, wrote to Averill Harriman in January 1933 warning of problems with CSSC after the Poles started their drive to nationalise the plant. "The Consolidated Silesian Steel Company situation has become increasingly complicated, and I have accordingly brought in Sullivan and Cromwell, in order to be sure that our interests are protected," wrote Knight. "After studying the situation Foster Dulles is insisting that their man in Berlin get into the picture and obtain the information which the directors here should have. You will recall that Foster is a director and he is particularly anxious to be certain that there is no liability attaching to the American directors."

But the ownership of the CSSC between 1939 when the Germans invaded Poland and 1942 when the US government vested UBC and SAC is not clear.

"SAC held coal mines and definitely owned CSSC between 1934 and 1935, but when SAC was vested there was no trace of CSSC. All concrete evidence of its ownership disappears after 1935 and there are only a few traces in 1938 and 1939," says Eva Schweitzer, the journalist and author whose book, America and the Holocaust, is published next month.

Silesia was quickly made part of the German Reich after the invasion, but while Polish factories were seized by the Nazis, those belonging to the still neutral Americans (and some other nationals) were treated more carefully as Hitler was still hoping to persuade the US to at least sit out the war as a neutral country. Schweitzer says American interests were dealt with on a case-by-case basis. The Nazis bought some out, but not others.

The two Holocaust survivors suing the US government and the Bush family for a total of $40bn in compensation claim both materially benefited from Auschwitz slave labour during the second world war.

Kurt Julius Goldstein, 87, and Peter Gingold, 85, began a class action in America in 2001, but the case was thrown out by Judge Rosemary Collier on the grounds that the government cannot be held liable under the principle of "state sovereignty".

Jan Lissmann, one of the lawyers for the survivors, said: "President Bush withdrew President Bill Clinton's signature from the treaty [that founded the court] not only to protect Americans, but also to protect himself and his family."

Lissmann argues that genocide-related cases are covered by international law, which does hold governments accountable for their actions. He claims the ruling was invalid as no hearing took place.

In their claims, Mr Goldstein and Mr Gingold, honorary chairman of the League of Anti-fascists, suggest the Americans were aware of what was happening at Auschwitz and should have bombed the camp.

The lawyers also filed a motion in The Hague asking for an opinion on whether state sovereignty is a valid reason for refusing to hear their case. A ruling is expected within a month.

The petition to The Hague states: "From April 1944 on, the American Air Force could have destroyed the camp with air raids, as well as the railway bridges and railway lines from Hungary to Auschwitz. The murder of about 400,000 Hungarian Holocaust victims could have been prevented."

The case is built around a January 22 1944 executive order signed by President Franklin Roosevelt calling on the government to take all measures to rescue the European Jews. The lawyers claim the order was ignored because of pressure brought by a group of big American companies, including BBH, where Prescott Bush was a director.

Lissmann said: "If we have a positive ruling from the court it will cause [president] Bush huge problems and make him personally liable to pay compensation."

The US government and the Bush family deny all the claims against them.

In addition to Eva Schweitzer's book, two other books are about to be published that raise the subject of Prescott Bush's business history. The author of the second book, to be published next year, John Loftus, is a former US attorney who prosecuted Nazi war criminals in the 70s. Now living in St Petersburg, Florida and earning his living as a security commentator for Fox News and ABC radio, Loftus is working on a novel which uses some of the material he has uncovered on Bush. Loftus stressed that what Prescott Bush was involved in was just what many other American and British businessmen were doing at the time.

"You can't blame Bush for what his grandfather did any more than you can blame Jack Kennedy for what his father did - bought Nazi stocks - but what is important is the cover-up, how it could have gone on so successfully for half a century, and does that have implications for us today?" he said.

"This was the mechanism by which Hitler was funded to come to power, this was the mechanism by which the Third Reich's defence industry was re-armed, this was the mechanism by which Nazi profits were repatriated back to the American owners, this was the mechanism by which investigations into the financial laundering of the Third Reich were blunted," said Loftus, who is vice-chairman of the Holocaust Museum in St Petersburg.

"The Union Banking Corporation was a holding company for the Nazis, for Fritz Thyssen," said Loftus. "At various times, the Bush family has tried to spin it, saying they were owned by a Dutch bank and it wasn't until the Nazis took over Holland that they realised that now the Nazis controlled the apparent company and that is why the Bush supporters claim when the war was over they got their money back. Both the American treasury investigations and the intelligence investigations in Europe completely bely that, it's absolute horseshit. They always knew who the ultimate beneficiaries were."

"There is no one left alive who could be prosecuted but they did get away with it," said Loftus. "As a former federal prosecutor, I would make a case for Prescott Bush, his father-in-law (George Walker) and Averill Harriman [to be prosecuted] for giving aid and comfort to the enemy. They remained on the boards of these companies knowing that they were of financial benefit to the nation of Germany."

Loftus said Prescott Bush must have been aware of what was happening in Germany at the time. "My take on him was that he was a not terribly successful in-law who did what Herbert Walker told him to. Walker and Harriman were the two evil geniuses, they didn't care about the Nazis any more than they cared about their investments with the Bolsheviks."

What is also at issue is how much money Bush made from his involvement. His supporters suggest that he had one token share. Loftus disputes this, citing sources in "the banking and intelligence communities" and suggesting that the Bush family, through George Herbert Walker and Prescott, got $1.5m out of the involvement. There is, however, no paper trail to this sum.

The third person going into print on the subject is John Buchanan, 54, a Miami-based magazine journalist who started examining the files while working on a screenplay. Last year, Buchanan published his findings in the venerable but small-circulation New Hampshire Gazette under the headline "Documents in National Archives Prove George Bush's Grandfather Traded With the Nazis - Even After Pearl Harbor". He expands on this in his book to be published next month - Fixing America: Breaking the Stranglehold of Corporate Rule, Big Media and the Religious Right.

In the article, Buchanan, who has worked mainly in the trade and music press with a spell as a muckraking reporter in Miami, claimed that "the essential facts have appeared on the internet and in relatively obscure books but were dismissed by the media and Bush family as undocumented diatribes".

Buchanan suffers from hypermania, a form of manic depression, and when he found himself rebuffed in his initial efforts to interest the media, he responded with a series of threats against the journalists and media outlets that had spurned him. The threats, contained in e-mails, suggested that he would expose the journalists as "traitors to the truth".

Unsurprisingly, he soon had difficulty getting his calls returned. Most seriously, he faced aggravated stalking charges in Miami, in connection with a man with whom he had fallen out over the best way to publicise his findings. The charges were dropped last month.


Buchanan said he regretted his behaviour had damaged his credibility but his main aim was to secure publicity for the story. Both Loftus and Schweitzer say Buchanan has come up with previously undisclosed documentation.

The Bush family have largely responded with no comment to any reference to Prescott Bush. Brown Brothers Harriman also declined to comment.

The Bush family recently approved a flattering biography of Prescott Bush entitled Duty, Honour, Country by Mickey Herskowitz. The publishers, Rutledge Hill Press, promised the book would "deal honestly with Prescott Bush's alleged business relationships with Nazi industrialists and other accusations".

In fact, the allegations are dealt with in less than two pages. The book refers to the Herald-Tribune story by saying that "a person of less established ethics would have panicked ... Bush and his partners at Brown Brothers Harriman informed the government regulators that the account, opened in the late 1930s, was 'an unpaid courtesy for a client' ... Prescott Bush acted quickly and openly on behalf of the firm, served well by a reputation that had never been compromised. He made available all records and all documents. Viewed six decades later in the era of serial corporate scandals and shattered careers, he received what can be viewed as the ultimate clean bill."

The Prescott Bush story has been condemned by both conservatives and some liberals as having nothing to do with the current president. It has also been suggested that Prescott Bush had little to do with Averill Harriman and that the two men opposed each other politically.

However, documents from the Harriman papers include a flattering wartime profile of Harriman in the New York Journal American and next to it in the files is a letter to the financial editor of that paper from Prescott Bush congratulating the paper for running the profile. He added that Harriman's "performance and his whole attitude has been a source of inspiration and pride to his partners and his friends".

The Anti-Defamation League in the US is supportive of Prescott Bush and the Bush family. In a statement last year they said that "rumours about the alleged Nazi 'ties' of the late Prescott Bush ... have circulated widely through the internet in recent years. These charges are untenable and politically motivated ... Prescott Bush was neither a Nazi nor a Nazi sympathiser."

However, one of the country's oldest Jewish publications, the Jewish Advocate, has aired the controversy in detail.

More than 60 years after Prescott Bush came briefly under scrutiny at the time of a faraway war, his grandson is facing a different kind of scrutiny but one underpinned by the same perception that, for some people, war can be a profitable business.

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Wall Street donates millions to top presidential candidates

Employees of Wall Street investment banks, whose role in the unregulated subprime mortgage market helped stall the U.S. economy, have donated more than $5 million to the top four Republican and Democratic presidential candidates.

A McClatchy analysis of the latest Federal Election Commission filings found that employees and executives of 12 firms -- including Merrill Lynch, Citicorp, Lehman Brothers and Swiss-owned UBS -- made hefty contributions to candidates in both parties but seemed to be betting more on Democrats.

The companies are among those who have the most at stake in the next election: They've already sustained losses approaching $100 billion, politicians are talking about tougher regulations and the new administration will have a large hand in crafting policies to address the subprime crisis. With the prospect of growing foreclosures for homeowners with shaky credit, the value of hundreds of billions of dollars in bundled mortgages could plummet.

Democratic candidates Sens. Hillary Clinton of New York and Barack Obama of Illinois were the leading recipients of cash from employees of these firms, collecting half the $7.4 million in donations to 15 major presidential candidates.

Through Dec. 31, Clinton had collected more than $2 million in donations from employees of 12 banking firms caught up in the subprime mess. She received $373,020 from Morgan Stanley workers, $316,001 from Goldman Sachs employees and nearly $290,000 from Citicorp. workers.

Obama got $1.7 million from the same firms, including $288,835 from Goldman Sachs employees, $242,395 from UBS workers and $226,805 from Lehman Brothers employees.

Clinton spokesman Phil Singer said the New York senator ``went to Wall Street and directly challenged the industry to take specific steps to stem the subprime housing crisis. She is intent on fixing the housing crisis and making sure that people are able to keep their homes.''

Clinton has proposed a three-month freeze on mortgage foreclosures, a plan that would drive down the value of bundled mortgages held by the banks. She also wants to force banks to require lenders to freeze mortgage interest rates for five years at the sub-market ''teaser'' levels that enabled millions of Americans to buy homes that they couldn't afford.

In Thursday night's debate with Clinton, Obama said he opposed an interest rate freeze, ''not because we need to protect the banks,'' but because it would drive up interest rates across the board.

Obama's spokesmen didn't immediately respond to requests for comment.

On the Republican side, former Massachusetts Gov. Mitt Romney received $893,915 in donations, topped by $146,970 from employees of Merrill Lynch, $124,050 from Morgan Stanley workers, $121,950 from Lehman Brothers employees and $120,000 from Goldman Sachs workers.

Arizona Sen. John McCain, whose campaign was so starved for cash in December that he took a $3 million bank loan, got $704,423 from employees of investment banks and two large banks, led by $145,715 from Merrill Lynch workers and $124,661 from Citicorp. employees.

Romney spokesman Kevin Madden said the governor's political contributors supported ''his experience and his vision for strengthening the country'' and that Romney's positions on the subprime crisis were ''driven by his desire to help American homeowners and stabilize'' the economy.

Aides to McCain, who has a reputation as a campaign finance reformer, didn't respond to requests for comment about his donations from subprime industry players.

The investment banking firms -- either major subprime lenders or firms that now hold portfolios of subprime loans -- had little to say about their employees' and executives' donations.

Spokeswoman Selena Morris of Merrill Lynch, which has written off some $20 billion in losses on subprime mortgages and securities in recent months, said that ''neither Merrill Lynch nor its PAC contribute to presidential campaigns.'' Its employees, she said, ``are free to participate in the political process just like any other citizen.''

A spokeswoman for Morgan Stanley, which wrote off $9.4 billion in losses last year, declined to comment, and representatives of several of the other firms didn't respond to requests for comment.

Michael Calhoun, the president of the North Carolina-based Center for Responsible Lending, said that predatory lending legislation already has passed the U.S. House of Representatives. He said he suspected that the investment banks ''want to have that outcome influenced by the administration,'' either the Bush administration or the next president's.

Other government decisions also could affect the firms' bottom lines.

Patricia McCoy, a University of Connecticut law professor, said the industry wanted to avoid legislation that would allow homeowners who were facing foreclosure on their mortgages to sue the current holders of subprime loans.

But Allen Fishbein, who watches over the housing industry for the Consumer Federation of America, said his group thought that with more accountability, big banks would do a better job of policing the kinds of mortgages that were written.

Consumer groups also are pushing Congress and the Bush administration to rewrite bankruptcy laws to allow judges to write down mortgage debts on primary residences. That's a measure that Wall Street mortgage holders are sure to resist, Fishbein said.


Here are the firms and their employees' total donations to all presidential candidates through Dec. 31:

Goldman Sachs, $1,046583; Citicorp, $961,745; Morgan Stanley, $913,914; Lehman Brothers, $906,652; Merrill Lynch, $712,603; Credit-Suisse, $545,911; UBS, $498,470; J.P. Morgan, $458,327; Bear Stearns, $373,427; Bank of America, $351,654; Deutsche Bank, $331,927; Wachovia, $258,376.

SOURCE: Federal Election Commission


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Senator Clinton went directly to Wall Street and broached the topic of legal indemnification as an incentive for mortgage servicers to make more loan modifications. I believe the transcript of the speech is available on her site and was made December 3rd or 5th 2007.

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