Matt Taibbi Follows the Money in Iowa AG Tom Miller’s Faux Tough Posture in 50 State Mortgage Settle ment Negotiations

naked capitalism 
April 22, 2011 2:45 AM 
by Yves Smith
Matt Taibbi Follows the Money in Iowa AG Tom Miller’s Faux Tough Posture in 50 State Mortgage Settlement Negotiations

We’ve taken aim repeatedly at Tom Miller’s obvious soft touch toward banks in his role as lead negotiator in the 50 state attorney generals negotiation over foreclosure abuses. Some of his questionable actions:

Promising to put people in jail, then quickly reversing himself

Working closely with the bank-friendly Treasury Department when the state and Federal legal issues are very different, rendering the rationale for cooperation suspect

Failing to undertake any meaningful investigations, which would have given the state AGs leverage in settlement talks

Not acting in a manner consistent with a lead negotiator role: negotiating AGAINST the AG group on behalf of the Administration, and springing a preliminary term sheet on them rather than involving them in developing it

Putting terms forward piecemeal, and in particular, not disclosing the terms of the release even to fellow AGs. In a deal, you make a complete offer and then see if the other side accepts or counteroffers. Would anyone deal with a homebuyer put in a bid for your home for, say, $220,000 and then came back the next day and said, “The tile in the master bathroom is kind of old, I want you to replace that too. Oh, and repaint it and the guest bedroom.”

We had assumed that the reason for Miller’s bending-over-backwards stance was that he was currying favor with the Administration in the hope of winning the nomination to head the Consumer Financial Protection Bureau. But Matt Taibbi has found what appears to be an even more logical explanation: out of state bank-friendly donors dumped lots of dough into Miller’s fundraising coffers. And I mean LOTS (at least by state AG standards).  From Taibbi:

A hilarious report has come out courtesy of the National Institute of Money in State Politics, showing that Iowa Attorney General Tom Miller – who is coordinating the investigation into the banks’ improper mortgage dealings – increased his campaign contributions from the finance sector this year by a factor of 88! He has raised $261,445 from finance, insurance and real estate contributors since he announced that he was going to be coordinating the investigation into improper foreclosure practices. That is 88 times as much as they gave him not over last year, but over the previous decade….

Put it this way. If the banks had to pay what they actually owed – from the registration taxes/fees they avoided by using the electronic registry system MERS to the money taken from investors in toxic mortgage-backed securities to the fees and payments stolen from homeowners via predatory loan practices and illegal foreclosures – they would probably all go out of business. That’s how much money is at stake here: the very future of financial giants like Bank of America and Citi and JP Morgan Chase is hanging to a very significant degree on the decisions of politicians like Miller.

Hence the sudden avalanche of money sent Miller’s way. The numbers are laughable. In 2006, out -of-state donors gave Miller’s campaign $10,508. For the 2010 cycle, that number was $497,357. Three lawyers by themselves – Al Gore’s attorney David Boies, plus Donald Flexner and Robert Silver, all partners in the firm Boies, Schiller and Flexner – gave Miller a total of $60,000.

So here we have it: yet another example of the best justice money can buy. Which means small fry like you and me go begging.



      

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