Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (28 page)

Obama performed a righteous head wag and mocked McCain’s answer again:

“‘I’m not sure, I’ll have to check with my staff.’ So they asked his staff and he said, ‘at least four.’”

Barry Q. Public wrinkled his nose in disapproval and repeated McCain’s words:

“At least four.”

The One True Guardian of the Everyman paced back and forth across the outdoor stage, working himself into a thick, bash-the-rich lather: “Now think about that! I guess if you think that being rich means you’ve got to make $5 million, and if you don’t know how many houses you have, then it’s not surprising that you might think the economy was fundamentally strong.”

The Peeved Populist paused for applause and laughter, then thrashed McCain again: “But if you’re like me, and you got one house, or you were like the millions of people who are struggling right now to keep up with their mortgage so they don’t lose their home, you might have a different perspective.”

He Who Is Like You wasn’t finished yet: “By the way, the answer is, John McCain has seven homes. There’s just a fundamental gap of understanding between John McCain’s world and what people are going through every single day here in America. You don’t have to be a Nobel Prize-laureate economist, you just have to have a little bit of a sense of what ordinary people are going through to understand that we can’t afford eight more years or four more years or one more year of the failed economic policies that George Bush has put in place.”
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How audacious of Obama to carry on about other politicians’ homes. He seemed to have forgotten that his own $1.7 million Chicago manse was financed with a discounted mortgage from Northern Trust and infamously included a shady land swap with convicted felon donor/developer Tony Rezko.
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A report released by the Federal Election Commission in February 2009 underscored that the Obamas received reduced loan rates (saving $300 a month, or $108,000 over the life of a 30-year loan) because of their high-profile positions. Northern Trust offered the super jumbo loan to the Obamas in anticipation of entering “long-term financial relationships” with the successful couple.
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This preferential treatment is not available to average Joes (with last names other than Biden) shopping for a new home.

In response to a complaint by Washington, D.C.-based watchdog Judicial Watch, the FEC refused to call the Obama’s mortgage deal an illegal corporate contribution, but it was an obvious act of favor-trading. Northern Trust employees had contributed $71,000 to Obama since 1990. “This was a business proposition for us,” the lender’s president bluntly told the
Washington Post
when asked about the below-market benefits of the Obamas’ home loan deal. As is so often the case in political life, the scandal isn’t necessarily what’s illegal—the scandal is what’s legal.
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Prominent members of Team Obama benefited from similar special home deals.
Politico
reminded readers that the Clintons secured a $1.35 million loan from Democrat pal and fundraiser Terry McCauliffe for their New York estate; PNC Mortgage further supplied the Clintons “several fee deductions and waivers to its policies”; Obama special envoy Richard Holbrooke snagged a sweetheart loan to refinance his Telluride, Colorado, ski vacation home from embattled Countrywide Financial as part of its “Friends of [CEO] Angelo [Mozilo]” V.I.P. program;
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and Obama’s close confidante Jim Johnson accepted more than $7 million in below-market-rate loans from Countrywide.

Obama had tapped and then dropped Johnson from his vice presidential search committee in June 2008 after his Countrywide ties became public. Johnson, who had served as CEO of government-sponsored mortgage behemoth Fannie Mae from 1991 to 1998, had failed to disclose his Countrywide perks in violation of Fannie’s code of conduct, perks which increased after his departure from Fannie Mae. Informal Obama economic consultant and fellow Fannie Mae chief Franklin Raines also failed to disclose his arrangements with Countrywide. The
Wall Street Journal
broke the story:

Property records show Mr. Johnson has received more than $7 million in loans from Countrywide since 1998, the first coming in the waning days of his Fannie Mae tenure. He borrowed $392,950 on a row house in Washington’s Dupont Circle neighborhood, with the rate set for the first five years at 6.375%.

At the time, initial rates for such loans ranged from about 6.2% to 6.5%, according to data compiled for The Wall Street Journal by HSH Associates Inc., which surveys lenders. Rates depend partly on how much borrowers pay in points, if any, to lower their interest charge. Records don’t show whether Mr. Johnson paid points or if so how many.

Mr. Johnson returned to Countrywide several times to finance his growing real-estate holdings. In November 2001, he received a Countrywide loan of $1.3 million for a home in Palm Desert, Calif. The rate was 5.250% for five years, then became adjustable. Rates on such loans averaged about 6% to 6.2% about that time....

In June 2003, Mr. Johnson obtained a $971,650 mortgage on a house in upper northwest Washington, D.C., with a rate of 3.875% for the first five years. About that time, the market average was about 4.3% to 4.9%. . . .

In January 2006, Mr. Johnson got a $5 million home-equity line of credit from Countrywide on a residence in Ketchum, Idaho, near the Sun Valley ski resort. And in December 2007 he received a Countrywide home-equity line of credit for $1.01 million and executed a $1 million promissory note in connection with that home.

... Mr. Raines, who succeeded Mr. Johnson at Fannie’s helm at the end of 1998, became a repeat customer of Countrywide while he was CEO. Two days before Christmas in 1999, Mr. Raines got a $1 million loan on his house in upper northwest Washington, D.C., refinancing it in November 2001. Property records don’t show the interest rate in either case.

In April 2003, Mr. Raines refinanced again with Countrywide, this time getting a 5.125% rate for the first 10 years... the average rate for such a loan around that time was about 5.5% to 5.7%.
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Yes, this is the same Countrywide that Obama had endlessly excoriated for its role in the subprime mortgage crisis. Obama likened the demonized lender’s CEO Angelo Mozilo to a dangerous virus in March 2008: “These are the people who are responsible for infecting the economy and helping to create a home foreclosure crisis.... These executives crossed the line to boost their bottom line.” Instead of focusing on Obama’s hypocrisy, liberal
Time
magazine journalist Karen Tumulty cried RAAACISM!—denouncing an ad that spotlighted Raines’s fraud-ridden tenure at Fannie Mae. Raines, who happens to be black, presided over the mother of all financial accounting scandals at Fannie Mae in which the institution misstated profits for years, yet escaped with a golden parachute worth an estimated $240 million in benefits.

No matter to Tumulty. She decried the McCain camp’s anti-Raines ad because it depicted “sinister images of two black men” (Obama and Raines).
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The ad’s photos of Obama and Raines were standard headshots—some with dour expressions, others smiling. The fact that Tumulty perceived them as “sinister” suggested that she should perform a racism self-exam before diagnosing anyone else.

Race-card distractions aside, Obama campaign manager David Plouffe soldiered on with the Clean Hands Narrative: “If we’re really going to crack down on the practices that caused the credit and housing crises, we’re going to need a leader who doesn’t owe these industries any favors.” A leader above the fray. A leader unsullied by crony connections. A leader who would usher in a “new kind of politics” that represented the little people and abandoned the old ways of doing business. Barack Obama did a very fine job of paying lip service to such leadership. In his open letter to the public announcing his presidential candidacy, Obama lamented that Washington had become “so gummed up by money and influence.”
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He has since taken every opportunity to separate himself rhetorically from evil industry and greedy capitalists:

“I want to be absolutely clear that the reason I’m in public life, the reason I came to Chicago, the reason I started working with unions, the reason I march on picket lines, the reason that I am running for president is because of you, not because of folks who are writing big checks,” Obama declared at an AFL-CIO debate in August 2007.

On Super Tuesday 2008, he expounded on his folksy We the People theme. The
New York Times
transcribed the euphoria:

Maybe this year, this time can be different. (Cheers, applause.)

Their voices echoed from the hills of New Hampshire to the deserts of Nevada, where teachers and cooks and kitchen workers stood up to say that maybe Washington doesn’t have to be run by lobbyists anymore. (Cheers, applause.) Maybe the voices of the American people can finally be heard again. (Cheers, applause.)

They reached the coast of South Carolina, when people said that maybe we don’t have to be divided by race and region and gender—(cheers, applause)—that the crumbling schools are stealing the future of black children and white children—(cheers, applause)—that we can come together and build an America that gives every child everywhere the opportunity to live out their dreams. This time can be different. (Cheers, applause.)

And today, on this Tuesday in February, in states north and south, east and west, what began as a whisper in Springfield has swelled to a chorus of millions calling for change. (Cheers, applause.) It’s a chorus that cannot be ignored, a chorus that cannot be deterred. This time can be different because this campaign for the presidency of the United States of America is different. (Cheers, applause.)

(Chants of “Yes, We Can! Yes, We Can!”)
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“Too often,” Obama lectured Wall Street in March 2008, “we’ve excused and even embraced an ethic of greed, corner cutting and inside dealing that has always threatened the long-term stability of our economic system. Too often, we’ve lost that common stake in each other’s prosperity.”
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In June 2008, Obama railed against credit card companies: “This has to stop. We cannot let the rules of the game continue to be rigged against ordinary Americans. We need a President who will look out for the interests of hardworking families, not just their big campaign donors and corporate allies.”
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Immediately after the speech, he headed to a campaign fundraiser at the Manhattan headquarters of Credit Suisse, one of the major investment companies caught up in the subprime lending debacle.

In March 2009, Obama assailed the corporate bonuses handed out by bailout recipient AIG—which had been approved by his own handpicked Treasury Secretary and AIG bailout architect Tim Geithner. But let’s not get distracted.

Obama blamed “the system and culture that made them possible—a culture where people made enormous sums of money, taking irresponsible risks that have now put the entire economy at risk.”
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The irresponsible risk-takers at AIG donated $104,332 to Barack Obama in the 2008 federal election cycle.
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Since 2004, AIG has donated 60 percent of its $2.6 million in political donations to Democrats. Obama kept the corrupted cash. But I digress.

“We don’t need these house of cards, these Ponzi schemes, even when they’re legal, where a relatively few do spectacularly well while the middle class loses ground,” Obama inveighed. “I want to describe to you the kind of economy that we want to build: an economy that rewards hard work and responsibility, not high-flying finance schemes.” He vowed to “make sure we don’t find ourselves in this situation again, where taxpayers are on the hook for losses in bad times, and all the wealth generated in good times goes to those who are at the very top of the income ladder. That’s the kind of ethic we’ve had for too long. That’s the kind of approach that led us into this mess.”

However, a close look at the high-flying financiers whom Barack the Commoner has surrounded himself with in Washington shows how deeply embedded the “ethic of greed” is in Obama World. The Wall Street gamblers that Obama and his wife carped about on the campaign trail were shoveling money to his campaign hand over fist. According to the Center for Responsive Politics, hedge funds and private equity firms donated $2,992,456 to the Obama campaign in the 2008 cycle. Obama, erstwhile critic of the campaign finance practice known as “bundling,” happily accepted more than $200,000 in bundled contributions from billionaire hedge-fund manager James Torrey, more than $100,000 in bundled contributions from billionaire hedge-fund manager Paul Tudor Jones, and more than $50,000 in bundled contributions from billionaire hedge-fund manager Kenneth C. Griffin, chief executive officer of Citadel Investment Group in Chicago.

No fewer than 100 Obama bundlers are investment CEOs and brokers: nearly two dozen work for financial giants such as Lehman Brothers, Goldman Sachs, or Citigroup.
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By comparison, multi-house dweller and Evil Republican Rich Guy John McCain received $1,699,525 from the industry—that’s over forty percent less than Obama took.
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Now, the hedge fund managers, statist bankers, corporate lobbyists, and lax regulators Obama incessantly cursed are the same ones whom he has appointed to “fix” the “system and culture” they created—and from which they all profited greatly.

“We can’t afford eight more years or four more years or one more year of the failed economic policies that George Bush has put in place,” Obama proclaimed on the campaign trail. But just like George Bush, Barack Obama is relying on Goldman Sachs/Wall Street power brokers to engineer massive government interventions to “rescue” failing businesses with the tax dollars of ordinary Americans. Obama had assailed John McCain for being “in cahoots” with CEOs and hedge fund managers. How are the myriad “public-private partnerships” Obama has embraced between government and corporate interests any different?