[R-G] [BillTottenWeblog] Obama's Money Cartel

[Bill Totten]

How Barack Obama Fronted for the Most Vicious Predators on Wall Street

by Pam Martens

A CounterPunch Special Investigation (May 05 2008)


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 one per cent to 3.5 per cent of stockbrokers -
this after thirty 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 US
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 twenty
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 twenty 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 fourteen 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.

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 fourteen contributors through February 01 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 US House of Representatives and secretary
of the US 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.

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 sixteen 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,
fourteen 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
attorneys general 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 forty 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 US 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 Senator John Breaux (Democrat, Louisiana) and
Representative Billy Tauzin (Republican, Louisiana)".

While not on the Center for Responsive Politics list of the top twenty
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.

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 seventeen 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 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.

This is the first of two parts. The second will run tomorrow.

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 pamk741 at aol.com.

http://www.counterpunch.org/martens05052008.html


TO POST A COMMENT, OR TO READ COMMENTS POSTED BY OTHERS, please click
on the word "comment" highlighted at the end of the version of this
essay posted at http://billtotten.blogspot.com/