Tag Archives: Treasury Department

Obstructionist Republicans and Gullible Democrats

30 Wednesday Jun 2010

Posted by in Congress, Democrats, economy, financial reform, financial regulation, Obama administration, Politics, Republicans, special interests, Wall Street

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Scott Brown is a quick learner. In his short time in the Senate he’s become a master at the game of ‘How To String Along The Gullible Democrat’ aka Lucy and the Football.

Here’s how it goes: Obstructionist Republican says, “I would vote for this particular piece of legislation except for X.” Gullible Democrat believes Obstructionist Republican (although for the life of me I can’t figure out why) and changes or takes out X. Obstructionist Republican then says, “That’s all well and good, but I also don’t like Y. If you take that out too, I may vote for said legislation.” Gullible Democrat removes Y, and the process repeat itself over and over until said legislation is either dead or too weak to do anything remotely resembling its original intention.

The latest example is the so-called financial reform bill. Brown wanted a loophole in the Volcker Rule to exempt banks in Massachusetts from being subject to limits on risky investments. With the help of Barney Frank and (surprise!)  the Treasury Department, the loophole was inserted into the legislation. (BTW, also at the insistence of Senator Brown, another loophole was added to the Volcker Rule which may delay its implementation until 2022.)

Brown’s objection to the bill then shifted to a $19 billion fee to be collected from large financial institutions, calling it a “tax.” I’m sure Brown’s opposition has absolutely nothing to do with the $450,000 he received from executives at financial institutions in the six days before the election in Massachusetts. Strictly coincidence..

Guess what? The bank fee is out now, too

“Top Democratic House and Senate negotiators who worked out a deal on a sweeping overhaul of financial regulations regrouped Tuesday to eliminate a $19 billion fee on banks that had threatened to derail the legislation.”

Brown wasn’t alone. He had two other Lucies standing with him:

“Besides Brown, Republican Sens. Olympia Snowe and Susan Collins of Maine, both of whom also voted for the Senate bill last month, said they, too, had qualms about the bank assessment that negotiators inserted into the bill last week.”

I guess the only alternative to the Democrats being gullible and naive is that they are complicit and corrupt. That they don’t really want actual reform and are just using the guise of compromising with the Republicans to play their favorite game—giving the appearance of doing something while in reality doing nothing which might upset the goose that lays the golden eggs of campaign contributions.

Gullible and naive or complicit and corrupt? Either way it doesn’t bode well for the future of the Republic.

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Treasury Department “Vigorously Opposed” To Fed Audit

09 Tuesday Mar 2010

Posted by in bailout, economy, Financial Crisis, Obama, Politics, Wall Street

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What is this man hiding?

“The Treasury Department is vigorously opposed to a House-passed measure that would open the Federal Reserve to an audit by the Government Accountability Office (GAO), a senior Treasury official said Monday.”

And how’s this for openness, transparency, and accountability?

“Secretary Tim Geithner, Assistant Treasury Secretary Alan Krueger and Gene Sperling, a counselor to the secretary, held a briefing Monday with new media reporters and financial bloggers during which they discussed the Fed audit and other topics. Under the briefing’s ground rules, the officials could be paraphrased but not quoted, and the paraphrase could not be connected to a specific official.”

Alan Grayson isn’t buying it:

“Rep. Grayson said he finds Treasury’s opposition to the audit troubling. “There is a growing feeling on the part of real Democrats that the president is getting bad advice from people who have sold out to Wall Street,” said Grayson.”

I’ll go one step further. The president is among those who have sold out to Wall Street, in my opinion.

Treasury Official Leaves to Begin Lobbying

02 Tuesday Mar 2010

Posted by in lobbyists, Obama, Politics, special interests, Wall Street

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This is a recording. Some things never change:

“Barack Obama has made cracking down on K Street a signature cause of his presidency. But a year into his tenure, the executive branch’s revolving door has already started to turn with one senior official making the exodus from administration insider to hired gun.

Munchus will be a test case for Obama’s tightened revolving-door policy, which prohibits former administration officials from lobbying the executive branch for the remainder of his administration.”

Damon Munchus, the principal liaison between the Treasury Department and Congress regarding financial institutions and capital markets, signed on Monday as a managing director with financial services lobbying boutique the Cypress Group, whose clients include some of the nation’s biggest banks [Citigroup, Freddie Mac, and Bank of America to name three].

What happened to this:

“President Obama has consistently made clear that he will strive to lead the most open, transparent, and accountable government in history.  Whether it is reigning in the influence of lobbyists in Washington, bringing unprecedented accountability to federal spending, opening doors to engagement with the American public, or shutting down the “revolving door” that carries special interest influence in and out of the government, the highest standards will be sought in every thing the federal government does.”

And this portion of the “pledge” all incoming members of the administration, including Mr. Munchus, signed:

“5.Revolving Door Ban — Appointees Leaving Government to Lobby… I also agree, upon leaving Government service, not to lobby any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration.”

Did you catch the loophole? “I agree not to lobby any executive branch official.” No mention of lobbying Congress, which falls into Mr. Munchus’ area of expertise:

“Munchus worked in the Office of Legislative Affairs, which deals directly with the Hill. His position as Deputy Assistant Secretary for Banking and Finance gave him intimate knowledge not just of the process but of key lawmakers…That’s invaluable information to investors.”

But in the spirit of bi-partisanship:

“Munchus’ arrival at Cypress Group comes on the heels of another addition to the firm, Republican Jeb Mason. Mason, former deputy assistant secretary for business affairs under then-Treasury Secretary Henry Paulson, was tasked with business outreach and coalition building in the Bush administration.”

In fact:

“With the acquisition of Munchus, Cypress can now boast to employ high-level officials from four straight Treasury Secretaries.”

And the band plays on….

Fannie and Freddie Get a Blank Check for Christmas

29 Tuesday Dec 2009

Posted by in economy, Obama, Politics

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I hope everyone had a great Christmas and that Santa brought you everything you wanted. He certainly was very good to Fannie and Freddie. Only in their case, Santa is the American taxpayer, you and me. One thing is clear, the plutocracy never sleeps, or takes a holiday. How about this for a Christmas Eve news dump?

“The Obama administration pledged on Thursday to back beleaguered mortgage finance giants Fannie Mae and Freddie Mac no matter how big their losses may be in the next three years.”

This brought to you courtesy of the accounting firm of Change, Openness, and Transparency:

“Under a law put in place before the government seized the two mortgage agencies in September 2008, Treasury Secretary Timothy Geithner had until the end of this year to increase the limit without asking Congress for approval…The administration waited until financial markets had closed on Christmas Eve to make the announcement…”

The previous cap on money poured down the Fannie and Freddie black hole was a combined $400 billion, $200 billion each, of which only(?) $111 billion has been used so far. So why change it to “unlimited?” Here’s an explanation:

“If the Treasury is removing the cap, they obviously expect the losses to skyrocket (even though they deny this publicly). This could be happening because the Treasury already knows how much Fannie and Freddie are going to declare as losses this quarter.”

Santa (again, that’s you and me) was also very good to Fannie and Freddie executives:

“But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009…The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac’s chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so.”

That’s $6 million each for CEOs whose companies have lost a combined $200 billion. Nice work if you can get it, and you can get it if you happen to have the Treasury Secretary on speed dial.

The Agonist sums up the entire cluster____ about as well as I’ve seen it:

“We are getting very used to watching the federal government operate with only the sketchiest information on what it is doing. Most everything seems to be done behind doors and in secrecy. That’s what makes this brief announcement about Fannie Mae and Freddie Mac so troublesome. When the federal government starts talking about unlimited guaranties to cover future losses, our biggest worry ought to be that whatever large number we can contemplate is included under the word “unlimited”, the government has an even larger number in mind.”

Government of the wealthy and powerful, by the wealthy and powerful, and for the wealthy and powerful. Some things never “change.”