Why Barney Frank is the Poster Child for Congressional Malfeasance

Today's blog post comes from OpenSecrets.org, summarizing the reason Barney Frank in any other business setting would be sitting on a cot in isolation at the Graybar Hotel somewhere. As a Congressman, however, he gets a pass. If Frank wasn't one of the architects and promoters of the mortgage securities crisis bubble, then he was certainly at least one of its ardent enablers.

At least I have the satisfaction of having seen him early for what he is, corroborated by this well-documented trail of malfeasance. If there is some doubt in your mind about the meaning of the word "malfeasance," try looking it up in a dictionary in some future day. You will likely see a picture of Barney Frank as the defining visual aid for the word.

If you need a target for loathing someone who had a principal role in the current financial debacle this country has inherited, look no further than Mr. Barney Frank. There is nothing "Honorable" about him.

One can only hope the American electorate at large in 2012, and the constituents in his district specifically, will have the collective wisdom to make a better choice than to send people like this to Washington ever again.

Take a deep breath and read some of the excerpts below. Taken in the context of the quotes cited from various Wall Street Journal articles below, Frank's fingerprints are all over the debacle. If it is upsetting to you, it should be.

Rep. Maxine Waters (D-Calif.): “Through nearly a dozen hearings, where frankly we are trying to fix something that wasn’t broke, Mr. Chairman, we do not have a crisis at Freddie Mac and in particular at Fannie Mae under the outstanding leadership of Mr. Frank Raines.”

Rep. Maxine Waters (D., Calif.): “Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine. In fact, the GSEs have exceeded their housing goals.”

Rep. Gregory Meeks (D-NY): In a hearing several years ago about a report on the safety and soundness of Fannie Mae and Freddie Mac from their regulator, Armando Falcon, Federal Housing Enterprise Oversight Director, Falcon came under fire. Meeks said; “The GSEs have done a tremendous job. There has been nothing that was indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own,” adding the regulator was trying to give the two a “heart surgeon [sic] when they really don’t need it.”

Rep. Barney Frank (D., Mass.): “The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities [Fannie Mae and Freddie Mac] that are fundamentally sound financially and withstand some of the disaster scenarios.”

Rep. Barney Frank (D-Mass.): In the same hearing several years ago about a report on the safety and soundness of Fannie Mae and Freddie Mac from their regulator, Falcon, Frank attacked Falcon: “I don’t see anything in your report that raises safety and soundness problems.”

Sen. Christopher Dodd (D., Conn.): “I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time.” (Senator Bob Bennett [R-UT] was Dodd's wingman on the Senate Banking Committee, one more reason he was unseated by his Republican nominating convention in 2010). 

When these elected officials are tasked with regulating the banking industry, but take political donations from their lobbyists, you end up with corruption.

Sen. Charles Schumer (D., N.Y.): “And my worry is that we’re using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie’s mission.”

Franklin Raines, former head of Fannie Mae: “These assets are so riskless that their capital for holding them should be under 2%.

Richard Syron, former head of Freddie Mac: “If I had better foresight, maybe I could have improved things a little bit. But frankly, if I had perfect foresight, I would never have taken this job in the first place.”

Note: Raines was forced out of Fannie Mae in December 2004 after the Securities and Exchange Commission launched an investigation into alleged accounting problems at Fannie Mae involving an estimated $6 billion in accounting problems. The Office of Federal Housing Oversight sued Raines in 2006, accusing him of aiding accounting shenanigans at Fannie, which allegedly involved the delay of reporting losses so top executives could earn large bonuses.

The suit attempted to recover the $50 million Raines in pay got based on billions of dollars in overstated earnings. In total, OFHEO demanded $110 million in fines and a clawback of $115 million in bonuses for three executives accused, including Raines.

Raines, Fannie’s former chief financial officer and its former controller settled the case in April 2008, agreeing to pay fines totaling about $3 million, paid for by Fannie’s insurance policies.

Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options, though the options were worthless. Raines also gave up an estimated $5.3 million of “other benefits” said to be related to his pension and forgone bonuses. In the end, Raines kept most of his largesse – in 2003 alone, his compensation was estimated at over $20 million.

And what of Mr. Barney Frank? Another member of Congress who escapes into retirement without a scratch.

On Monday, Rep. Barney Frank (D-Mass.) announced that he would not seek re-election.

Frank, who is in his 16th term in the U.S. House of Representatives, is the highest ranking Democrat on the House Financial Services Committee. In recent years especially, he's been a prolific fund-raiser, often raising huge sums from the industries that the Financial Services Committee regulates.

Since 1989, Frank has raised more than $13 million for his campaigns, according to research by the Center for Responsive Politics. About $1 of every $3 he has raised as come from interests within the finance, insurance and real estate sector, according to the Center's research, or a total of $4.3 million since 1989.

The securities and investment industry alone has given Frank more than $920,800 -- or about 7.5 percent of his total war chest, according to the Center's research. In every electioncycle since 2004, the securities and investment industry has ranked as Frank's top industry backer.

Commercial banks, too, have shared their riches with Frank. Since 1989, the people and political action committees associated with the commercial banking industry have donated $623,400 to Frank's campaigns -- or about 4.8 percent of his total haul over the years, according to the Center's research. That's enough to rank the industry as his No. 5 top all-time backer.

During the 2008 election cycle, Frank was the top beneficiary among all members of the U.S. House of Representatives from the mortgage banking interests -- an industry that includes Freddie Mac, Fannie Mae and the Mortgage Bankers Association. (During the 2010 election cycle, he ranked as the third highest beneficiary of the industry.)

As the chair of the House Financial Services Committee during the 111th Congress, Frank helped shepherd the Wall Street Reform and Consumer Protection Act of 2009 to President Barack Obama's desk last year.

That law is commonly referred to as the Dodd-Frank Act, after Frank and the legislation's chief sponsor in the U.S. Senate, Chris Dodd (D-Conn.), who chaired the Senate Banking Committee. (Notably, Dodd opted not to stand for re-election last year, and instead, he spun through the revolving door and now serves as the chairman of the Motion Picture Association of America, a pivotal player in the film industry lobby in Washington.)

Frank, who, in 1987, was the first member of Congress to come out as openly gay has also reaped financial rewards from gay rights advocates. The PAC of the pro-gay rights group Human Rights Campaign has donated $76,000 to Frank over the years -- enough to rank the group as his No. 5 top organizational backer.

Additionally, about 22 percent of the money that Frank has raised over the years has come from residents of the Boston metro area, according to the Center's research.

He ended the third quarter with $389,600 cash on hand.

His retirement will set off a race among Democrats to both fill his seat and find a new leader on the House Financial Services Committee next Congress.

Redistricting -- The BIG Prize in the 2010 Midterm Election

That was a stunning turnaround last Tuesday! The last count I had on seats gained by the Republicans was 64 in the U.S. House of Representatives, and six in the U.S. Senate, making it the biggest reversal of fortunes in a midterm election since the 1930s for either party. That's good, but the really good news might be even better.

The genius of the founders who drafted the Constitution of the United States of America is still with us. They designed it that way, to assure tyranny would become nigh unto impossible to replicate here.

Republicans now have the ability on the heels of the 2010 Census to redraw the maps for the congressional districts nationwide. That's because they didn't just sweep national races, but they picked up 680 legislative seats in local state legislatures, which might be even more pivotal in repudiating the socialist Obama agenda in the years ahead.

In addition, there were overwhelming victories in statehouses and governors' races across the country last week. Both state legislatures and congressional districts will have to be redrawn to conform with Census results. It's a grueling and politically charged process that typically gives the party in power an inherent advantage for a decade, allowing them to preserve current strongholds or to put others in play. It's almost too good to be true, and Republicans will be well advised to wield the power they now hold judiciously and responsibly.

For the GOP, that's a turnaround that couldn't have been timed better.

The smackdown suffered by this president and his ill-fated socialistic policies will reverberate for years to come. This isn't about everyone who voted for Obama suddenly becoming bigoted, or misunderstanding Obama's messaging through overuse of his prodigious oratorical skills. Instead, it is a complete repudiation of his policies, and as I had hoped it sets the stage for a new dawn in American politics.

It is now estimated as results continue to trickle in that Republicans will have unilateral control over the redrawing of 195 congressional districts. Democrats have just 45. The remainder are in states where either both parties have a chance to influence redistricting or where decisions will be made by independent commissions.

However, as good as the news is this week, it does not guarantee there will be another Republican surge in two years. There are well-established rules that dictate the composition of the districts, such as making sure districts have a similar number of voters and are compact and contiguous. It's not as easy as it appears, but it helps to be controlling how it's done.

And while redistricting has more recently become a refined science, Democrats can find at least some hope in looking at their own history: They had a redistricting advantage 20 years ago and then were hastily swept out of congressional power in 1994.

The new 2010 Census data will be provided by the end of this year and will determine whether a state has gained or lost population. Those findings determine the number of congressional seats a state gets. States will then get detailed Census data in early 2011 to help them divvy up legislative districts. States gaining or losing seats often get the most attention.

I read a story last week about a political consulting firm specializing in redistricting. Election Data Services Inc., projects eight states will gain seats with the new Census numbers. Texas would get four; Florida would get two; Arizona, Georgia, Nevada, South Carolina, Utah and Washington would each get one.

Senator Orrin Hatch (R-UT) joined in sponsoring an ill-advised bill to prematurely give Utah that seat in exchange for creating a seat in Washington D.C., straining at the very outer limits of the Constitution.

That bad move will come up again in Hatch's re-election bid in 2012. Senator Bob Bennett's "go along to get along" political philosophy proved to be his demise. All incumbents from both parties will likely tread more carefully, no doubt, because of Tuesday's results.

Evidence in Utah was Jim Matheson's (D-UT) public statement he will no longer support Nancy Pelosi if she seeks to run for minority leader in the House. He narrowly escaped defeat. He's going to be screaming to high heaven when the boundaries get redrawn to accommodate Utah's new House seat. I suspect his days are numbered and he knows it. He's now a caucus of one among so-called "blue dog Democrats," the only one who survived nationwide.

EDS projects 10 states will lose seats, including New York and Ohio (two each), Illinois, Iowa, Louisiana, Massachusetts, Michigan, Missouri, New Jersey and Pennsylvania losing one each.

For the most part redrawing boundaries is politically charged, even in states where independent commissions do the work. So in those 18 states where maps will be redrawn, including Utah, Republicans will now control governorships in 13 of them. Election gains this week in Florida, Iowa, Michigan, Ohio and Pennsylvania assure Republican control over the process.

The GOP will control both chambers in 10 of those 18 states' legislatures. Three others are divided or yet to be decided.

Even states without a change in their congressional makeup face intense battles. In North Carolina, Republicans claimed control of both the House and Senate for the first time in more than a decade. Even in a state where you don't gain or lose, you still have to redraw the lines because of the Census. That's why redistricting might just be the biggest prize of all in these 2010 midterms.

I have no illusions about how painful the course we must pursue will be. I hope and pray Republicans are up to leading in the shared sacrifice required. If they continue to protect an unsustainable status quo of big government and tax and spend politics, their domination will be short-lived.

The American people have spoken, and they are now on high alert.  Politicians beware.

Presidential Repudiation

Senator Mike Lee (R-UT)

The results of today's election continue to trickle in at this writing.  My favorite candidate, Mike Lee (R-UT), easily won election as Utah's next Senator.  At 38, he becomes the youngest member of the United States Senate.  Congratulations to Mike.  I backed him from the moment I was first introduced to his candidacy back in January.

I was also delighted to see Gary Herbert retain the Utah governorship in this special election.  The Philpot race was a narrow loss to incumbent Jim Matheson.  Would have liked to see Morgan Philpot, but it was not to be.

Nationally, the big news tonight is the nationwide repudiation of President Barack Obama's liberal agenda.  This swing in House seats into the Republican column will prove to be HISTORIC!  Since World War II, in 1946, when the Republicans picked up 56 seats, and then in 1994, when they won 52 seats, tonight looks like the biggest gain ever.  They will pick up an estimated 65 seats. 

That's a tsunami.  Independents once again swung the election -- this time they swung to the Republicans.  This is a center-right country.  Obama would have had to hit it out of the ballpark with his socialistic agenda in order to avoid this punishment, and he couldn't pull it off.  He got whacked.  The turnout was stunning for a midterm election. 

It appears they will also pick up six or seven Senate seats, maybe as many as nine governorships, putting the number of governorships somewhere in the range of 32 nationwide.  That's a stunning victory by any measurement. 

One would have to say that the angst among voters has most to do with the sour economy.  Voters are impatient these days.  It would be foolish to claim victory if you're a Republican, because from my vantage point it seems this was mostly anger directed at Democrats for the direction the country has been taken.  I don't believe for one moment the electorate is as much impressed with Republicans as they are opposed to Democrats.

There is a little reported reality emerging.  The Democratic caucus will be more, much more, liberal than it was because the so-called "blue dog Democrats" were demolished nationwide.  Conversely, the Republicans are going to be more conservative than ever before.  Don't hold your breath waiting for bipartisanship to emerge suddenly in the aftermath.

Mid-term Election Map, 2010

This was a lot of anger and anxiety, resulting in a repudiation of incumbents across the board, and this is only the beginning.  Republicans are more conservative, more vocal, and the electorate will not wait long before they demand results.  Angry that no one is listening, today they are making Washington listen.  They were ignored over Obamacare, TARP and stimulus spending.  Today they were screaming.  The Republicans had better listen up or they will be gone.  The greatest rejection was of the president's policy failure.  The same fate awaits the Republicans in 2012 if they don't get something done quickly. 

There is one race that stands out among all the rest demonstrating just how deeply the anger has run against this president.  Obama made twelve trips to Ohio to campaign for Ted Stickland, and Vice-President Joe Biden was there eight times.  It was John Kasich (R-OH), however,  who pulled it out by a comfortable margin.

We're not thrilled to vote for Republican candidates, but the alternative was unacceptable.  The message is loud and clear:  Get the deficit down, reduce spending, reduce national debt, get the economy going, and reject Obamacare.

The question is whether President Obama will continue to govern as a liberal idealogue, or will he move to the middle where the moderate voters reside and determine elections. 

Obama said last week, "The people are acting out of fear without knowledge about what I've done for them."  That's an amazingly dense analysis for someone who is known to be an effective speech giver.  Is it that he can't communicate effectively, or are the American voters so smart that they know EXACTLY what they don't want?

I say it's complete, absolute and unequivocal presidential repudiation.

"Obamanomics" -- is that a word?

Whatever it is, it isn't working very well.  Why?  Because private capital is being hoarded and isn't even in the game yet.  I've seen recent estimates that American-owned banks are sitting on up to $2.7 Trillion.  Why?  Uncertainty.

This editorial from the Washington Examiner stated the case well yesterday:

"They've spent nearly $8 trillion since 2007, including nearly $2 trillion on economic stimulus programs and an equal amount for the Troubled Asset Relief Program and similar bailouts. They've effectively nationalized Fortune 500 corporations, taken over the health care sector, and set the regulatory stage for more bailouts and takeovers, but the needle is still stuck. Worse, recovery isn't likely for many months ahead because those same politicians are planning more of the same failing policies.

"Consider that entrepreneurial small businesses are the job-creation machine of a free-enterprise economy. But these firms are about to get smacked with significant tax rate increases that will keep most of them struggling just to survive. President Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi will let the Bush tax cuts of 2001 and 2003 expire as scheduled Jan. 1, 2011. The current 33 percent tax rate on individuals will go to 36 percent, and the current 35 percent rate will increase to 39.5 percent. Those are individual rates, but the majority of small-business profits are taxed as income to individuals."

The editorial concludes:

"As for the big corporations that are hoarding billions of dollars that would otherwise be flowing into new investments and fueling renewed economic growth, there is no mystery why they are putting off making such decisions. Who can blame them after seeing the nationalization of General Motors and Chrysler, or the moratoria under which hundreds of large and small energy firms were forced to stop drilling in the Gulf of Mexico and on land in places like Wyoming?

"Also, an explosion of new anti-business regulations to further hobble the economy is coming soon, thanks to Obama-Reid-Pelosi policies. As ATR's Grover Norquist told The Examiner, 'You don't know what the law will be next month, or if you will even be allowed to own your business. The only thing you can be sure of is they will raise your taxes. You would be a fool now to go out and hire somebody new.' "

Prediction:  Take away the Obama majority in both Houses of Congress in November, and private enterprise will get back into the game and re-ignite the sputtering American economic engine. 

How many days left before the election?  It can't come soon enough. . . 

Political Quote of the Day

Honestly, you just can't make up this kind of stuff. . .  fact is stranger than fiction.

Yesterday on ABC's This Week, host Christiane Amanpour asked Speaker Nancy Pelosi (D-CA):

"You are, by all accounts, one of the most -- if not the most -- powerful and successful speakers of -- in the history of the United States. You've passed so much legislation. The President was elected with a significant majority. You had control of both houses of Congress. And yet now, people are talking about you might lose your majority in the House. The gap seems to be growing wider between what's achieved and what's making an impact with the people. How did this happen? ...how did you get to this place where, perhaps, you might lose your majority?"

Pelosi responded: "We don't see it that way. We are very proud of the agenda that we have put forth to the American people."

* * *

And what comes before the fall?  I think it's pride.

Democrats Underestimate the American People Once Again

Repost from Rep. Michele Bachmann (R-MN)
Thursday, July 29th at 4:24PM EDT

Clearly, the Democrats think they have something here tying together the Republican Party and the Tea Party. However, it seems to me that this political miscalculation is exactly why Congress’ approval rating is at 11%.

What the Democratic Leadership doesn’t seem to understand is that the Tea Party isn’t a political party; it’s a set of ideas shared by the overwhelming majority of Americans.

The Tea Party is made up of Democrats, Republicans, Independents, Libertarians, Constitution Party members, and apolitical Americans.

They are mainstream folks who love our nation and who wish to see America return to policies of limited government, fiscal responsibility, and strictly adhere to our Constitution. After all, these are the fundamental principles of our founding and represent the character of America.

For the Democrats to portray these fundamental principles as radical and a hindrance to public policy shows just how far out of touch they are from the political pulse of this country.

I hope the Democrats’ latest messaging campaign reaches far and wide because it will do nothing but distance them further from Main Street America.

* * *

One more voice making sense in America. 

Allen West, healing America

This is a candidate, Allen West, running for Congress in Florida.  He's a retired Army Lieutenant Colonel. 

Here's his website.  I've been following and admiring his campaign for the last few months.  I wish he could be cloned in every Congressional district across our great nation. 

He's way too pragmatic, way too committed, way too sensible, and way too principled for the average Congressman in Washington today. 

He's EXACTLY what the doctor ordered for turning over control of the House in November. . . and healing America.

Enjoy!

Obama: Six in Ten say "No confidence"

This just in -- according to this story in the Washington Post today, six in ten Americans say they have no confidence in President Obama's ability to lead the country. . .  even better, 62 percent are looking for new representation in Congress.  Those most likely to vote in the midterms prefer the GOP over continued Democratic rule by a sizable margin of 56 percent to 41 percent. 

Word of caution:  Don't accept a party label as the outer limit of your scrutiny of candidates.  The last time Republicans had control they blew it. 

What it takes is candidates from either party who pledge limited government and reduced spending. 

The Great Awakening of 2010 marches on to November. . .

Morgan Philpot -- Utah 2nd District's Next Congressman

Now that Mike Lee is the Utah Republican Senate nominee, we turn our attention to Morgan Philpot in the 2nd Congressional District in his race against incumbent (there's that dirty word again) Jim Matheson.

It will come as no surprise -- I am endorsing Morgan Philpot for anyone who cares (I don't think endorsements mean much, by the way).  Back in May, I went on the record that I felt Philpot could beat Matheson in a straight up contest without encouraging cross-over votes in the Democratic primary for Claudia Wright. 

I was pleased he came out of convention and escaped a primary runoff (he won by only one vote).  His convention victory is a cautionary tale for every politician and every concerned citizen -- EVERY vote counts, even yours, this year.

At the convention my friend Jim North and I were so impressed with the quality of candidates who are willing to put themselves on the ballot for consideration.  Those who blandly sit on the sidelines and complain there is no one acceptable to vote for would have been similarly disposed as we were at the convention.  Morgan Philpot is just such a quality candidate.  He deserves our support.

There can be little doubt America is watching this race between Philpot and Matheson.

Flip 41

Forty-one votes. That is the magic number of swing votes that has enabled the Democrats in Washington DC to push through Obamacare, multiple stimulus bills and a reckless financial reform bill (to name a few). This November, a change in just 41 seats in Congress will help reverse the tide of wasteful spending and one-size-fits-all federal “solutions” and help put America’s budget and economy back on solid ground.

One of those critical swing seats is Utah’s 2nd Congressional District race, a seat currently held by one of those enabling gang of 41 Democrats.

Utah’s ability to affect the political landscape in Washington DC rests with one race in Utah: Utah’s 2nd Congressional District seat. A GOP victory in Utah will help ensure that Republicans retake the House in January 2011, thus ending the monopoly of power held by Pelosi, Reid and Obama.

A vote for Morgan Philpot on November 2 is a vote for a change from the status quo and a vote for putting America back on a fiscally and economically sound track.

What You Can Do

We are asking each of you for just three things: 1) Cast your vote for Morgan Philpot on November 2nd, 2) Become a Philpot Phan and join the ranks of a growing number of committed volunteers, and 3) Make a donation to Morgan’s campaign.

Together we can take back the House.

Morgan is pleased to call Utah home. He and his wife Natalie, a native of Sandy, Utah, graduated from the University of Utah and lived in the heart of Salt Lake county for several years. While there, Morgan was able to represent his neighbors in Utah House District 45. He now lives in the Utah County portion of Congressional District 2.

Growing up, Morgan was active in Scouting and rose to the rank of Eagle. He was involved in high school sports and school government. As a young boy, Morgan was raised primarily by his mother who spent several years parenting seven children on her own. Starting with his first “real” job picking strawberries at age 9, he quickly learned independence and self reliance. He knows the value of balancing a budget and of making decisions based on how much money you actually have, not how much you wish you had.

While attending the University of Utah, he earned degrees in Anthropology and Environmental Studies. During that time, he and his wife were able to serve internships in Washington D.C. for the White House Council on Environmental Quality and the Supreme Court respectively.

After graduating from college, Morgan took a job as the new account sales manager for a Salt Lake fabrication company. Two years later, Morgan ran in a hotly contested race for State Representative of Utah House District 45 (Sandy, Salt Lake County, Midvale) with the motto “Freedom, Family, Future”. He put together a strong, effective grassroots campaign and in 2000, at the age of 28, he became one of the youngest state legislators in the Utah House.

As a State Representative, Morgan didn’t hesitate to take strong stands on tough issues. He consistently led the fight against wasteful government spending, championed life, second amendment rights and free market principles. He sought creative and innovative ways to improve public education and was the lead sponsor of the Carson Smith Special Needs Scholarship, a bill that created an educational voucher program. This law has opened new avenues to a better education for Utah’s families with special-needs children and now serves over 500 individuals. While in the legislature, Morgan was granted the “Friend of the Taxpayer” award by the Utah Taxpayer’s Association and the “Guardian of Small Business” award by the National Federation of Independent Businesses. Morgan was also one of the founding members of the House Conservative Caucus.

In 2004, Morgan chose to leave the legislature and attend the Ave Maria School of Law, a school dedicated to life, the rule of law, and the U.S. Constitution. While there, he was privileged to learn from such influential minds as Judge Robert Bork and Charles Rice.

Upon completion of law school Morgan clerked for Utah’s Attorney General Mark Shurtleff. Morgan served as the in-house legal counsel for a Utah business for two years and is now a consultant with a private company in Sandy.

In addition to his legislative service Morgan has also volunteered his time to Scouting, Church, and Utah politics. He has served as a State delegate, County delegate, State Central Committee member, Executive Committee member and most recently as the Vice-Chair of the Utah Republican Party.

Morgan has enjoyed sharing his love of ancient history with his children through rock-hounding, camping and hiking in many areas of rural Utah. His family also enjoys gardening and reading together. Morgan currently lives in American Fork with his wife and five children.

Morgan believes that his real life struggles and experiences uniquely qualify him to serve the families of Utah as the next Congressman from the Second District.

Analysis of Dodd-Frank Financial Overhaul Bill

This is a repost of an excellent analysis of Dodd-Frank from Liberty Central.  There was a sheepish admission that did not instill much confidence in me or anybody else, coming as it did from one of the principal architects at 5:00 a.m. after an all-night session to hammer out final details. "It's a great moment. I'm proud to have been here," said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. "No one will know until this is actually in place how it works."

I was stunned when I read those words.  No, I was shocked that this kind of stuff could actually be happening right under our noses.

This is an all-too-familiar pattern that has been repeated again and again over the course of the last year and a half.  There is only one way to characterize the work product of this Congress:  Middle-of-the-night-behind-closed-doors legislation passed by the Democrat majority with little or no collaboration solicited nor support garnered from any opposing voices while America sleeps. 

The question is often asked these days why the Constitution -- that dusty old piece of parchment -- should still be relevant in today's modern world.  Like Obamacare, this monstrosity of repressive tyrannical oversight (I do not overstate it) does nothing but put unrestrained powers into the hands of unelected bureaucrats through the creation of yet another federal agency governed by presidential appointees.  It's even hard to remember the criticisms of "King George" W. Bush for what were seen as outrageous presidential grabs for power.  There are few or none who seemed alarmed at what is going on in this administration, especially from the MSM.  Rarely do we hear a peep from them anymore.  We must increasingly turn to other sources for insight. 

I'm not certain anybody really cares about this over-reaching bank regulation, but I have to admit I am amazed at what I see happening in the sudden and swift erosion of our liberties and freedoms.  And the reaction of the bank lobbyists and investors when they saw this bill is that they were "relieved?"  I find no relief at all in what follows. 

I can't help wondering what Thomas Jefferson would say today, when this is what he said in 1791:  "I would rather be exposed to the inconveniences attending too much liberty, than those attending too small a degree of it."  (Letter to Archibald Stuart, Philadelphia, 23 December 1791).

***

ASK QUESTIONS: Dodd-Frank Financial Overhaul Bill

By: Sarah Field, 1 Jul 2010

Yesterday, the House passed the 2315-page Dodd-Frank Financial Reform overhaul 237-192 with three Republicans voting for it: Cao (LA), Castle (DE) and Jones (N.C.). Fourteen Democrats voted against it: Boren (OK), Chandler (KY), Childers (MS), Critz (PA), Giffords (AZ), Hill (IN), Kaptur (OH), Kirkpatrick (AZ), Kratovil (MD), Minnick (ID), Mitchell (AZ), Nye (VA), Ross (AR), and Shuler (N.C.).

[Utahns in the 2nd Congressional District, please note that Jim Matheson voted FOR this bill, reason enough for you to reconsider your vote in November -- I support Morgan Philpot in this race, and encourage others to join me].

It will head to the Senate after the 4th of July recess and, even though Senators like Collins (ME), Snowe (ME), Nelson (NE), and Brown (MA) were worried about the $19B “bank tax,” there are many more, even costlier parts of this bill. In fact, on page 357 of the bill, there is an unlimited bank tax. This guide will give you the tools you need to call your Members of Congress or ask them tough questions during town hall meetings when they are home on July 4th recess.

The three most important things to know about this bill is that it (1) Creates a permanent bailout authority, ending TARP, but instead of using that savings for debt reduction as the law required, forces taxpayers to bear the costs of the new legislation, (2) Sets up the federal government to micromanage the markets and overload them with regulations, and (3) Continues to protect Fannie Mae and Freddie Mac. This bill vests more power in administrative agencies and will raise the costs of living for every American with higher fees on our markets.

Liberty Central read the entire Dodd-Frank Overhaul bill and picked out key questions that delve into other major problems with the bill:

GROWTH OF POWER FOR THE ADMINISTRATIVE STATE

Did you know…?

…that the bill sets up the Financial Services Oversight Council, appointed by the President, to identify risks to financial stability and can vote on which companies fall under its jurisdiction? (TITLE I)

… that there is an elastic clause where the Council, Board of Governors, and Supervising Agencies can make whatever rules or issue whatever orders are necessary to carry out their duties? (Title VIII) That’s unelected bureaucrats interpreting the law how they see fit.

…that while taxpayer funds can be used to liquidate a company, no taxpayer funds can be used to stop liquidation of a company? (Title II, P. 380.)

…that the FDIC has permission to decide which creditors receive more money than their similarly situated creditors? (Title II)

…that, during the liquidation process, the FDIC can make additional payments to the individuals it chooses to minimize losses to the “orderly liquidation.” This also gives power to the FDIC to pay some creditors more than they deserve.

…that the Federal Reserve can still make emergency loans if they decide it is necessary for the stability of the economy? (TITLE XI)

…that Title III ‘plays mix and match with the letters of alphabet soup agencies’ by replacing one former bureaucratic regulatory agency (the Office of Thrift Supervision) with another, more powerful bureaucratic regulatory agency (the Office of the Comptroller of the Currency) that is not even accountable to the Secretary of the Treasury?

… that the Office of the Comptroller of the Currency is not given a budget, but instead the bill gives the office the authority to raise its own funding from assessments, fees, and charges from any entity described in section 3(q)(1) of the Federal Deposit Insurance Act, Title III, Sub. A?

…that this bill contains a power-grabbing new Office for Federal Insurance at Treasury, regulating an area traditionally left to the States? (Title V)

… that the bill prohibits states from collecting a licensing fee (for surplus lines broker) unless the state is participating in a national database? (Title V)

… that this bill establishes what is, in effect, an Investor Czar by creating the office of the Investor Advocate? (Title IX)

…that there will be a government database kept of all persons with custody or use of securities or money? (Title IX, Sec. 1333)

…that the bill establishes another government bureaucracy in the Office of Municipal Securities? (Title XI)

…that the bill sets up a new bureaucracy in the Bureau of Consumer Financial Protection, which regulates the offering of consumer financial products as an executive agency, with its director appointed by the President? It does not have a specified size, but lists the need for branches in D.C. and elsewhere. (Title X, Sub. A)

…that the federal government now requires mortgage loan originators to register with the government, and grants regulatory authority to a bureaucracy? (TITLE XIV-Sub A.)

…that the Financial Services Oversight Council determines the definition of “financial activities”, is to establish “prudent standards” for banks and has taxing power and can limit the size of financial institutions? (TITLE I)

…that a government bureaucrat can exempt companies from regulations if they decide it’s in the “public interest”? (Title VI)

… that the government will now dictate the terms of credit ratings, and sets up a federal Office of Credit Ratings? (TITLE IX)

…that the Office of the Comptroller of the Currency is given sweeping regulatory powers and little accountability; the Secretary of the Treasury is barred from intervening in any matter before the Comptroller unless provided for specifically by law. (Title III Sub A Sec. 324 (b) (1))

…that funding for the Board of Governors of the Federal Reserve System is done by the Board, who is free to collect as much as it wants from any bank or non-bank financial institution with holdings over $50 billion? (Title III Sub A)

…that the Bureau of Consumer Financial Protection has the authority to declare an act unfair, may collect information about business conduct and activities of covered persons and service providers, has investigators with subpoena power and make rules on abusive practices? (Title X, Sub. B, Sub. E)

… that the Secretary of Treasury or the Board of Governors can decide if a company needs to be liquidated or liquidate assets? (Title II, Title XI)

…that the bill has emergency authority to liquidate positions in security, and the decision to do so is arbitrary with little room for review? (TITLE VII)

… that the Board requires annual stress tests to determine if a company has adequate capital and can require reports on the financial condition of nonbank financial companies, and to give up any information requested “promptly”? (TITLE I, Sec. C)

…that a company with $50 billion in holdings cannot purchase shares of certain other companies without permission of the government? (TITLE I, Sec. C)

…that the bill allows the government to liquidate companies deemed “failing,” with creditors and shareholders taking the loss, including foreign banks? (Title II)

… that the government can discharge any contract that the company entered into if it considers it to be “burdensome?” (Title II, pg. 266)

…that the bill allows the Board of Governors to regulate what it decides are risky transactions, and who will supervise? (Title VII)

… that it is left up to the Commodity Futures Trading Commission to define “commercial risk” and that the commission shall review every swap? (TITLE VII)

… that that FDIC would be able to reorganize any liquidated company as a “bridge financial institution” with a board of directors that is appointed by the FDIC? (Title II, p. 320 – 358)

… that this legislation would newly micromanage private fund advisors who are responsible for a relatively small amount of money? (Title IV)

…that every registered agent in swap markets is required to have a designated compliance officer, who is required to file an annual report with the government? Did you also know that the government now requires information about security based swaps be made available to the public, and that there is to be a depository of swap information, and that depository may share information with other Federal agencies and some foreign entities? (Title VII)

…that there is now a requirement that shareholder votes be held on executive compensation every 6 years, and that the government controls the makeup of the Board of Director Compensation Committees? (Title IX)

…that the federal government now requires written appraisals of all property, and requires that appraisers be registered and conform to regulations? (TITLE XIV, Sub. F)

…“Swap data repositories” are like stock exchanges for certain financial transactions that are not offered to the public for investment.

… that swap data repositories may be required to provide information — including transaction data identifying individual investors — to US regulators, the DOJ, and foreign financial supervisors, central banks, or ministries? (Title VII, p. 876)

…the Commodity Futures Trading Commission is authorized to develop new duties for swap data repositories based on “any evolving standard of the United States or the international community”? (Title VII, p. 881)

… that the Commodity Futures Trading Commission can set limits on how much any one person or group of related persons can invest in swaps or options? (Title VII, pp. 941-948)

… that publicly traded Boards of Trade will be required to have their board of directors and the other decision-making bodies reflect “a broad and culturally diverse pool of qualified candidates”? (Title VII, p. 940)

… that the Commodity Futures Trading Commission may forbid foreign boards of trade from taking orders from US persons unless they are registered with the Commission and comply with similar regulations as US boards of trade? (Title VII, pp. 951-957)

… that the financial reform bill tries to, in essence, rewrite certain provisions in private contracts? (Title VII, p. 960)

… that the Commodity Futures Trading Commission previously could not make its interpretations the exclusive way to comply with regulations, but now it can make these interpretations mandatory? (Title VII, p. 977)

… that the financial reform bill creates an interagency working group to study the oversight of carbon markets, including carbon spot markets and derivative markets? (Title VII, pp. 1012-1014)

… that the Commodity Futures Trading Commission and Securities Exchange Commission are required to consult and coordinate with foreign regulatory authorities on the establishment of consistent international standards regulating swaps, futures, and options? (Title VII, pp. 1016-1017)

… that, if the Commodity Futures Trading Commission accuses a person of providing false information or manipulating the price of any swap or commodity, the hearing to determine penalties take place in three days or less, and any penalized person has only 15 days to file an appeal? (Title VII, pp. 1019-1026)

PROMOTES SPECIAL INTERESTS

Did you know…?

…that this bill is full of over 16 studies, including whether to end the Conservatorship of Fannie Mae and Freddie Mac, reverse mortgages, insurance premiums of banks, private education loans and credit scores?

…that the bureau of Consumer Financial Protection will also collect data about small business loans, including whether the loan is to a minority or woman owned business, and maintain a database which includes the revenue and racial, ethnic and gender characteristics of the business? (Title X, Sub. G)

…that the bill is full of measures that continue to divide Americans by race by creating specific programs for racial minorities and women, including an Office of Fair Lending and Equal Opportunity (Title X, Sub. A), Office of Housing Counseling (TITLE XIV, Sub. D), the Office of Minority and Women Inclusion (Title III, Sub. D), and requires recruitment at historically black colleges and other minority serving institutions (TITLE III, Sub. D)?

… that this national insurance office’s charge will be to help ensure that the under-served community, consumers and minorities have access to insurance and that this sounds much like the policies that set up the subprime loan distortions in the mortgage business under CRA? (Title V)

… that this bill imposes a debt limit on nonbank financial institutions, but excludes Fannie Mae and Freddie Mac and exempts Fannie and Freddie from securities laws, while proscribing new standards for loans (Title IX, TITLE I, Sec. C)

…that all of the government employees from the abolished Office of Thrift Supervision will simply be transferred to other departments? (Title III, Sub. B)

…that the TARP Program is still in place, and allowed to purchase troubled assets if there is deemed a threat to financial stability? (TITLE XIII)

…that the bill contains a pet project that seeks to make sure that materials coming from the Congo and other “conflict” areas are not being used? (TITLE XV)

…that the bill has greater regulation on extraction of oil, natural gas and minerals, and regulates the foreign trade of those materials? (TITLE XV)

…the Bill sets up a Financial Crisis Assessment and Fund, which applies to any company engaged in activities that are financial, or incidental to the financial sector. This fund will be paid for by companies, and will determine the impact on low income and minority communities if the company fails? (TITLE XVI)

SUMMARY

This bill is incompatible with the Founding Fathers’ vision of limited government, because it promotes the growth of government, expands the powers of the administrative bureaucracy, limits economic freedom, and promotes personal interests. Limited Government requires that the powers be shared among three, co-equal branches: the Executive, Legislative and Judicial. With the system of “checks and balances” combined with the vote of the people, there exists a system of oversight over the actions of the federal government. However, today’s federal government also involves administrative agencies, the so-called “fourth branch.” These parts of government are unelected and usually filled with career employees at all but the highest level, yet they have both lawmaking and enforcement powers. Unfortunately, this bill vests even more power in administrative agencies and will raise the costs of living for every American with higher fees on our markets.