Obama's Money Cartel: How Barack Obama Fronted for the Most Vicious Predators on
Wall Street
by Pam Martens
This article is the result of a special
investigation undertaken by Counterpunch, orignally printed in 2 parts, here and here..
"The top contributors to the Obama campaign are the very
Wall Street firms whose shady mortgage lenders buried the elderly and the poor
and minority under predatory loans."
Wall Street, known variously as a barren
wasteland for diversity or the last plantation in America, has defied courts
and the Equal Employment Opportunity Commission (EEOC) for decades in its
failure to hire blacks as stockbrokers. Now it's marshalling its money machine
to elect a black man to the highest office in the land. Why isn't the press
curious about this?
Walk into any of the largest Wall Street brokerage firms today and you'll see a
self-portrait of upper management racism and sexism: women sitting at
secretarial desks outside fancy offices occupied by predominantly white males.
According to the EEOC as well as the recent racial discrimination class actions
filed against UBS and Merrill Lynch, blacks make up between 1 per cent to 3.5
per cent of stockbrokers - this after 30 years of litigation, settlements and
empty promises to do better by the largest Wall Street firms.
The first clue to an entrenched white male bastion seeking a black male
occupant in the oval office (having placed only five blacks in the U.S. Senate
in the last two centuries) appeared in February on a chart at the Center for Responsive
Politics website. It was a list of the 20 top contributors to the Barack
Obama campaign, and it looked like one of those comprehension tests where you
match up things that go together and eliminate those that don't. Of the 20 top
contributors, I eliminated six that didn't compute. I was now looking at a
sight only slightly less frightening to democracy than a Diebold voting
machine. It was a Wall Street cartel of financial firms, their registered
lobbyists, and go-to law firms that have a death grip on our federal
government.
Why is the "yes, we can" candidate in bed with this cartel? How can
"we," the people, make change if Obama's money backers block our ability
to be heard?
Seven of the Obama campaign's top 14 donors consisted of officers and employees
of the same Wall Street firms charged time and again with looting the public
and newly implicated in originating and/or bundling fraudulently made
mortgages. These latest frauds have left thousands of children in some of our
largest minority communities coming home from school to see eviction notices
and foreclosure signs nailed to their front doors. Those scars will last a
lifetime.
"How can
‘we,' the people, make change if Obama's money backers block our ability to be
heard?"
These seven Wall Street firms are (in order of money given): Goldman Sachs, UBS
AG, Lehman Brothers, JP Morgan Chase, Citigroup, Morgan Stanley and Credit
Suisse. There is also a large hedge fund, Citadel Investment Group, which is a
major source of fee income to Wall Street. There are five large corporate law
firms that are also registered lobbyists; and one is a corporate law firm that
is no longer a registered lobbyist but does legal work for Wall Street. The
cumulative total of these 14 contributors through February 1, 2008, was
$2,872,128, and we're still in the primary season.
But hasn't Senator Obama repeatedly told us in ads and speeches and debates
that he wasn't taking money from registered lobbyists? Hasn't the press given
him a free pass on this statement?
Barack Obama, speaking in Greenville, South Carolina on January 22, 2008:
"Washington lobbyists haven't funded my campaign, they won't run my White
House, and they will not drown out the voices of working Americans when I am
president."
Barack Obama, in an email to supporters on June
25, 2007, as reported by the Boston Globe:
"Candidates typically spend a week like
this - right before the critical June 30th financial reporting deadline - on
the phone, day and night, begging Washington lobbyists and special interest
PACs to write huge checks. Not me. Our campaign has rejected the
money-for-influence game and refused to accept funds from registered federal
lobbyists and political action committees."
The Center for Responsive Politics website allows one to pull up the filings
made by lobbyists, registering under the Lobbying Disclosure Act of 1995 with
the clerk of the U.S. House of Representatives and secretary of the U.S.
Senate. These top five contributors to the Obama campaign have filed as
registered lobbyists: Sidley Austin LLP; Skadden, Arps, et al; Jenner &
Block; Kirkland & Ellis; Wilmerhale, aka Wilmer Cutler Pickering.
Is it possible that Senator Obama does not know that corporate law firms are
also frequently registered lobbyists? Or is he making a distinction that
because these funds are coming from the employees of these firms, he's not
really taking money directly from registered lobbyists? That thesis seems
disingenuous when many of these individual donors own these law firms as equity
partners or shareholders and share in the profits generated from lobbying.
Far from keeping his distance from lobbyists, Senator Obama and his campaign
seems to be brainstorming with them.
The political publication, The Hill, reported on December 20, 2007, that
three salaried aides on the Obama campaign were registered lobbyists for dozens
of corporations. (The Obama campaign said they had stopped lobbying since
joining the campaign.) Bob Bauer, counsel to the Obama campaign, is an attorney
with Perkins Coie. That law firm is also a registered lobbyist.
What might account for this persistent (but non-reality based) theme of
distancing the Obama campaign from lobbyists? Odds are it traces back to one of
the largest corporate lobbyist spending sprees in the history of Washington
whose details would cast an unwholesome pall on the Obama campaign, unless our
cognitive abilities are regularly bombarded with abstract vacuities of hope and
change and sentimental homages to Dr. King and President Kennedy.
"Many of
these individual donors share in the profits generated from lobbying."
On February 10, 2005, Senator Obama voted in favor of the passage of the Class
Action Fairness Act of 2005. Senators Biden, Boxer, Byrd, Clinton, Corzine,
Durbin, Feingold, Kerry, Leahy, Reid and 16 other Democrats voted against it.
It passed the Senate 72-26 and was signed into law on February 18, 2005.
Here is an excerpt of remarks Senator Obama made on the Senate floor on
February 14, 2005, concerning the passage of this legislation:
"Every American deserves their day in court. This bill, while not perfect,
gives people that day while still providing the reasonable reforms necessary to
safeguard against the most blatant abuses of the system. I also hope that the
federal judiciary takes seriously their expanded role in class action
litigation, and upholds their responsibility to fairly certify class actions so
that they may protect our civil and consumer rights...."
Three days before Senator Obama expressed that
fateful yea vote, 14 state attorneys general, including Lisa Madigan of Senator
Obama's home state of Illinois, filed a letter with the Senate and House,
pleading to stop the passage of this corporate giveaway: The AGs wrote:
"State attorneys general frequently investigate and bring actions against
defendants who have caused harm to our citizens... In some instances, such
actions have been brought with the attorney general acting as the class
representative for the consumers of the state. We are concerned that certain
provisions of S.5 might be misinterpreted to impede the ability of the
attorneys general to bring such actions...."
The Senate also received a desperate plea from more than 40 civil rights and
labor organizations, including the NAACP, Lawyers Committee for Civil Rights
Under Law, Human Rights Campaign, American Civil Liberties Union, Center for
Justice and Democracy, Legal Momentum (formerly NOW Legal Defense and Education
Fund), and Alliance for Justice. They wrote as follows:
"Under the [Class Action Fairness Act of 2005], citizens are denied the
right to use their own state courts to bring class actions against corporations
that violate these state wage and hour and state civil rights laws, even where
that corporation has hundreds of employees in that state. Moving these state
law cases into federal court will delay and likely deny justice for working men
and women and victims of discrimination. The federal courts are already overburdened.
Additionally, federal courts are less likely to certify classes or provide
relief for violations of state law."
This legislation, which dramatically impaired labor rights, consumer rights and
civil rights, involved five years of pressure from 100 corporations, 475
lobbyists, tens of millions of corporate dollars buying influence in our
government, and the active participation of the Wall Street firms now funding
the Obama campaign. "The Civil Justice Reform Group, a business alliance
comprising general counsels from Fortune 100 firms, was instrumental in
drafting the class-action bill," says Public Citizen.
One of the hardest working registered lobbyists to push this corporate giveaway
was the law firm Mayer-Brown, hired by the leading business lobby group, the
U.S. Chamber of Commerce. According to the Center for Responsive Politics, the
Chamber of Commerce spent $16 million in just 2003, lobbying the government on
various business issues, including class action reform.
According to a 2003 report from Public Citizen, Mayer-Brown's class action
lobbyists included "Mark Gitenstein, former chief counsel to the Senate
Judiciary Committee and a leading architect of the Senate strategy in support
of class-action legislation; John Schmitz, who was deputy counsel to President
George H.W. Bush; David McIntosh, former Republican congressman from Indiana;
and Jeffrey Lewis, who was on the staffs of both Sen. John Breaux (D-La) and
Rep. Billy Tauzin (R-La)".
While not on the Center for Responsive Politics list of the top 20 contributors
to the Obama presidential campaign, Mayer-Brown's partners and employees are in
rarefied company, giving a total of $92,817 through December 31, 2007, to the
Obama campaign. (The firm is also defending Merrill Lynch in court against
charges of racial discrimination.)
Senator Obama graduated Harvard Law magna cum laude and was the first black
president of the Harvard Law Review. Given those credentials, one
assumes that he understood the ramifications to the poor and middle class in
this country as he helped gut one of the few weapons left to seek
justice against giant corporations and their legions of giant law firms. The
class-action vehicle confers upon each citizen one of the most powerful rights
in our society: the ability to function as a private attorney general and seek
redress for wrongs inflicted on ourselves as well as for those similarly
injured that might not otherwise have a voice.
"Obama
helped gut one of the few weapons left to seek justice against giant
corporations and their legions of giant law firms."
Those rights should have been strengthened, not restricted, at this dangerous
time in our nation's history. According to a comprehensive report from the
nonprofit group, United for a Fair
Economy, over the past eight years the total loss of wealth for people of
color is between $164 billion and $213 billion for subprime loans which is the
greatest loss of wealth for people of color in modern history:
"According to federal data, people of color are more than three times more
likely to have subprime loans: high-cost loans account for 55 per cent of loans
to blacks, but only 17 per cent of loans to whites."
If there had been equitable distribution of
subprime loans, losses for white people would be 44.5 per cent higher and
losses for people of color would be about 24 per cent lower. "This
is evidence of systemic prejudice and institutional racism."
Before the current crisis, based on improvements in median household net worth,
it would take 594 more years for blacks to achieve parity with whites. The
current crisis is likely to stretch this even further.
So, how should we react when we learn that the top contributors to the Obama
campaign are the very Wall Street firms whose shady mortgage lenders buried the
elderly and the poor and minority under predatory loans? How should we react
when we learn that on the big donor list is Citigroup, whose former employee at
CitiFinancial testified to the Federal Trade Commission that it was standard
practice to target people based on race and educational level, with the
sales force winning bonuses called "Rocopoly Money" (like a
sick board game), after "blitz" nights of soliciting loans by phone?
How should we react when we learn that these very same firms, arm in arm with
their corporate lawyers and registered lobbyists, have weakened our ability to
fight back with the class-action vehicle?
Should there be any doubt left as to who owns our government? The very same
cast of characters making the Obama hit parade of campaign loot are the clever
creators of the industry solutions to the wave of foreclosures gripping this
nation's poor and middle class, effectively putting the solution in the hands
of the robbers. The names of these programs (that have failed to make a dent in
the problem) have the same vacuous ring: Hope Now; Project Lifeline.
Senator Obama has become the inspiration and role model to millions of children
and young people in this country. He has only two paths now: to be a
dream maker or a dream killer. But be assured of one thing: this country will
not countenance any more grand illusions.
Pam Martens worked
on Wall Street for 21 years; she has no securities position, long or short, in
any company mentioned in this article. She writes on public interest issues
from New Hampshire. She can be reached at [email protected].