REPREHENSIBLE! REVOLTING! TALK ABOUT UPSIDE DOWN, BASS-ACKWARDS! The Wall Street Journal reported a story June 8, 2010 that, on the scale of being upside down, makes the Latino students’ 2006 abuse of the U.S. flag in Montebello, California (pictured at left and in each installment of this series) seem like a Sunday school picnic. According to yesterday’s news release, Treasury Secretary Timothy Geithner, Senator Christopher Dodd (D-Conn.) and Rep. Barney Frank (D-MA)(Ever notice how much Massachusetts corruption and idiocy gets seated in the halls of Congress?!) “… are expected to wield disproportionate influence over Congress’ final push to write a new law for financial regulations.” http://online.wsj.com/article/SB10001424052748704749904575292691025712952.html?mod=WSJ_V This revelation – which is nothing more than confirmation of the reigning insanity in Washington – evoked in me a momentary, irrational hope only that The Wall Street Journal had inadvertently picked up on a canard here.
Not so, though. And at the risk of using too many clichés, I submit that those three characters make the old saw about “the fox guarding the henhouse” seem like a bedtime story by comparison. Who worse to oversee our financial regulations?
Dewey, Cheatham & Howe
Start with Geithner, who’s possibly the least harmful of the three simply because he’s a newcomer, not yet thoroughly entrenched in the basement of Washington politics. He’s lately been to Europe telling political and financial leaders in that troubled area of the globe – the European Union — that they need to exercise restraint and curb excessive spending. What?! Is this a joke? We in the United States under the current rule of Barack Obama and his cabinet of esteemed Secretaries, including Geithner, his czars and a rogue legislature who’ve just indebted our nation to the tune of additional trillions of dollars for bailouts and a disastrous healthcare “reform,” deign to tell Europe they should exercise restraint and fiscal prudence?! “Holy … [Expletives deleted here]. And this admonition from the mouth of one who, before he was confirmed in his cabinet position, was nationally exposed for not having paid his income taxes (He must have been talking to Sen. Harry Reid (D-NV), who insists that our federal income tax system is a voluntary system). But still Geithner was confirmed. Unbelievable, but true here in this land of the free and the home of the brave. One of our leaders for financial reform is a known tax cheat in one of the land’s highest offices. And we continue to tolerate his holding the office he occupies. Who’s really at fault here?
Follow that with team player number two, Senator Christopher Dodd, who’s been seated in the national legislature since 1974, first as a Connecticut congressman, then as a senator from 1980 to present. And his dad was a U.S. Senator before him. Family thing, you know. Like the Kennedy clan of Massachusetts. Anyway, as I recall, Sen. Christopher Dodd was called out as the dust settled in the 2008 financial collapse for having received one or more sweetheart-deal loans or accommodations from Countrywide Financial Corporation, one of the big mortgage lenders and underwriting firms that went belly-up in the subprime lending scandals and whom he proposed to bail out even though he was a VIP customer of the bank. Arm’s-length transaction? Why honor that basic business concept in the proactive halls of Congress? He was implicated, along with Barney Frank, in the Fannie Mae/Freddie Mac swamp as well, but of course, Dodd denied any wrongdoing. That, after he had called those firms “fundamentally strong”, said they were in “sound situation” and “in good shape” and that to “suggest they are in major trouble is not accurate.” Well, history shows how accurate his insistent defense of fiscal strength was. In the opinions of many more-esteemed political observers and commentators, he should have been indicted for corruption and other insider deal cutting. But in our upside-down nation of the present, he’s still seated among the august ones in the U.S. Senate and will be setting the new rules despite the fact that his campaigns have long been funded by the financial services industry. What’s wrong with that picture? Do we sense, somewhere deep down in our bellies, that the fix is in?
Coincidentally, according to familiar news sources, Sen. Dodd “had a reputation for being ‘rowdy’ in his early years in the Senate, including a 1985 incident where he and Senator Ted Kennedy, after a long night of drinking, made a “sandwich” out of a waitress at the Capitol Hill French restaurant la Brasserie while their dates were in the bathroom.” Wikipedia, citing The Washington Post, Milbank, Dana, “Sen. Dodd announces retirement with dignity — and honesty”, Jan. 7, 2010, and R. Konigsburg, Washington’s Sexual Awakening, New York, Feb. 9, 1998. How in the world do two drunken senators make a sandwich out of a waitress? “Remember Chappaquiddick?”
There are other small indiscretions attributable to the esteemed senator from Connecticut, but we’ll forego them for now as other “old business.”
Finally then, there’s the confidence-inspiring, often-frantically-foaming-at-the-mouth Barney Fwank of Massachusetts. He assiduously helped us climb to the financial depths we have reached in our nation’s economy and politics. It was under his watchful eye as a legislative overseer of Fannie Mae and Freddie Mac that those two entities wisely worked their way into utter bankruptcy under the expert leadership of Franklin Raines and required a federal bailout. And Frank had the unmitigated gall, like Sen. Dodd and on national TV, to defend the course of action that led to the bankruptcy. Do you get a “warm fuzzy” knowing that Mr. Fwank is still at the helm of financial power in our Congress and protecting us more fervently than ever before – that he’s one of those who is policing the purse strings? Do you remember Mr. Franklin Raines, the former CEO of FNMA who led the mortgage-backing institution in the run-up to its collapse? [And who, by the way, earlier served in Bill Clinton’s administration as the White House budget director?] Surely you remember — he was the one who, with a golden parachute, shamelessly walked away from the sinking Fannie Mae – walked away as “one who fell in a bucket of ____ and came out smelling like a rose.” Wikipedia sums it up like this (cites are given in the article at http://en.wikipedia.org/wiki/Franklin_Raines):
“On December 21, 2004 Raines accepted what he called “early retirement” from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by the Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses.
“In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $90 million in payments made to Raines based on the overstated earnings, initially estimated to be $9 billion but have been announced as 6.3 billion.
“Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused. On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie’s insurance policies [emphasis mine]. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of “other benefits” said to be related to his pension and forgone bonuses.
“An editorial in The Wall Street Journal called it a ‘paltry settlement’ which allowed Raines and the other two executives to ‘keep the bulk of their riches.’ In 2003 alone, Raines’s compensation was over $20 million.”
The dignified — and longstanding — reign of insanity
How about that? Your tax dollars and mine helped pay the premiums on the insurance policies that were used to pay the fines for Raines’ criminal behavior! Criminal behavior that included compensation of $90 million paid to Raines as the result of blatant fraud! How does that work? How does payment of fines by insurance benefits punish Raines and the others for their wrongdoing? How does that make any sense? I submit that we are “upside down in utopia” and apparently still insisting that the emperor has new clothes. Congress and all the federal agencies that purport to be watchdogs of government agencies and related, quasi-private bureaucracies had their collective head and eyes in a very dark cavern located within arms’ reach.
But mass corruption at the highest levels of our government is no new development. That should come as no surprise. We’ve been through the Watergate scandal with Nixon. We’ve survived the Clinton presidency, and it turns out that he may have been one of the more effective presidents of the last twenty years – defining “effective,” of course, as an obvious double entendre here. When he ascended to the Great White Throne in 1993, he promised us, amidst much hubris, “the most ethical administration ever, ….” I still flush with excitement at the recollection of that high time of ethics in American history – a period of such thrilling developments as the affair with the White House intern, the “lost” records of Hillary et al., impeachment and obstruction of justice, along with a redefinition of such obscure terms as “sex” and “is.”
We should not forget that the Savings and Loan scandal of the late 1980s broke in 1989 and implicated five U.S. Senators (“The Keating Five”) and the Federal Home Loan Bank Board in the muck that ensued and resulted in a mere $3 billion bailout by the federal government – minute by today’s standard bailout package. All five – Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn, the former astronaut (D-OH), John McCain (R-AZ), and Donald W. Riegle, Jr. (D-MI) – were accused of corruption in 1989 for improperly intervening in 1987 on behalf of Charles H. Keating, Jr., chairman of the Lincoln Savings and Loan Association. That institution was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB), which, incidentally, just happened to “back off taking action” against Lincoln.
The U.S. Senate Ethics Committee conducted an investigation and concluded, in 1991 that Cranston, DeConcini, and Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings; only Cranston received a formal reprimand. Senators John Glenn and John McCain were cleared of having acted improperly but were criticized for having exercised “poor judgment”. Surprise, surprise! Politics, not right and honor, won the day once again – and at the considerable expense of the taxpayers.
The bigger scandal, in my opinion, is that all five of the senators known as The Keating Five served out their terms. Only Glenn and McCain ran for re-election, both were successful, and McCain would go on to run for president twice, including being the unsuccessful Republican Party nominee for president in 2008.
CONCLUSION: These incidents are only the tip of a flourishing iceberg of corruption inside our Beltway. We could go on ad infinitum (and ad nauseum!) with lesser players such as former Congressman Jim Wright (D-TX), but it serves no point except to exhaust. The three players — Geithner, Dodd and Frank — are frauds of the biggest sort. To allow them — whether in the name of tolerance or apathy or “hope” — to run our financial reform process is absolute insanity, equivalent to having Bonnie and Clyde serve as bank security guards.
But again, the greater truth is that we American voters are lazy, stupid, afflicted with short memories and an overdose of forgiveness and laxity – or some combination thereof – or perhaps are as corrupt as the representatives we put into office and maintain there on fat paychecks and special benefits for as long as they wish to “serve.”
The definition of insanity is doing the same thing over and over and expecting different results.” ~ Benjamin Franklin
I believe we’re overdue for a real change. Are we waiting for the cavalry to show up? I’m hoping the voters are beginning to come out from under the influence of the political drugs.
Carpe diem. Vita brevis!
© June 8, 2010. All rights reserved.
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