(Four days to sub-prime Friday – promoted by EaBo Clipper)
The sub-prime mortgage industry, and the bond market that developed around it, are widely seen as responsible for the collapse of the United States economy in 2008. Two of the major players in the sub-prime industry were ACC Capital Holdings through it’s subsidiary Ameriquest and Countrywide Financial. Two major players in the Democratic Party have ties to these companies. Deval Patrick was on the Board of Directors of ACC (Ameriquest) and Chris Dodd had oversight responsibility in the Senate and received a sweetheart mortgage deal from Countrywide.
Why is this relevant on Friday October 23, 2009? Barack Obama is holding seperate fundraisers for these two currently embattled politicians.
First up is Deval Patrick, who’s 2006 campaign is known as the Obama ’08 version 0.9 BETA. Currently Mr. Patrick is lagging in fundraising behind Republican Charlie Baker and Independent-Democrat Timothy Cahill, the current Treasurer of Massachusetts. At 12:45 PM on Friday October 23, 2009 Barack Obama is holding a $500 a head fundraiser for Deval Patrick. In addition a $5,000 a head private reception is being held for the Massachusetts Democratic Party. That evening Presdient Obama is hosting a fundraiser for Mr. Dodd in Connecticut.
To understaned how Deval Patrick ended up on Ameriquest’s board, you have to understand Deval Patrick’s role in private corporations. In the 1990’s Deval Patrick was the Assistant Attorney General for Civil Rights in Janet Reno’s Justice Department. During that tenure he was responsible for forcing Chevy Chase Bank of Maryland to give low-income minorities low-interest loans.
In another case that recalled the BayBanks settlement, Justice Department lawyers were able to force a Maryland bank, Chevy Chase Federal Savings, to serve black neighborhoods and provide low- interest loans to their residents. Even though the bank had not discriminated against anyone, Patrick and Attorney General Janet Reno criticized the financial institution because it avoided serving certain minority districts. The bank reluctantly agreed to a settlement in which it would designate $11 million to build new branches and provide below-market-rate loans and mortgages to minorities. This greatly worried members of the financial community, who protested that the Justice Department had exceeded its authority.
Back in the 1990s Deval Patrick was directly responsible for the government forcing Banks to give risky loans to people that couldn’t afford them. After leaving the Justice Department Mr. Patrick made a name for himself as a fixer. That is someone who is hired by companies facing pressure from the minority community to make that pressure go away. This is the genesis of his hiring by Texaco and Coca-Cola, two companies that were facing pressure from minority groups. That pressure went away when Deval Patrick was hired by them.
The third such company was Ameriquest. Deval Patrick was appointed to the Board of ACC Capital Holdings in 2004 to help fix the predatory lending practices of it’s subsidiary Ameriquest.
During the first televised debate of the Democratic primary race, Reilly seized upon Patrick’s membership on the board of the parent company of Ameriquest Mortgage Co., whose lending practices were investigated by Reilly’s office and with other states.
”This is a question of conflicts. You have an involvement with Ameriquest. Tell the folks how much money you make from Ameriquest,” Reilly told Patrick. ”I spent a year, two years, along with 50 other states fighting Ameriquest predatory lenders, the most notorious in this nation. Maybe you can tell us how much money you make from Ameriquest.”
Deval Patrick is said to have helped ACC Capital end it’s “predatory lending” practices, but ACC Capital through Ameriquest continued to offer sub-prime loans before, after, and most importantly during Deval Patrick’s time on the board. In 2007, in what now can be seen as an eerie preview of the trouble the whole sub-prime industry ended up in, ACC Capital leaned on former board member Patrick to make a phone call to Citigroup Chairman and fellow Clinton Adminstration official Robert Rubin. The purpose of that phone call was to get a capital infusion for ACC Captial.
Governor Deval Patrick, who was criticized during the gubernatorial campaign for his involvement with a controversial subprime mortgage lender, called a top official at Citigroup, former US Treasury secretary Robert E. Rubin, two weeks ago to intercede on behalf of the owners of Ameriquest Mortgage as they sought urgent financial assistance from the global financial giant.
In a statement to the Globe, Patrick said he made the Feb. 20 call to Citigroup not in his role as governor but after a personal request to him from a top official at ACC Capital Holdings, the firm that owns Ameriquest Mortgage, which has frequently been accused of predatory lending.
Citigroup, the world’s largest financial company, has a host of business interests in Massachusetts, many of which are regulated by the state. A key Citigroup subsidiary handles lucrative bond work for state agencies. In addition, Ameriquest is licensed by the state Division of Banks.
In hindsight this call should have been seen as a wake-up call that the sub-prime industry was on shaky grounds. But it wasn’t. Deval Patrick made hundreds of thousands of dollars as a member of the Board of Directors of one of the worst corporate actors of the 1990s and 2000s that helped to put us in the financial mess we now find ourselves.
Chris Dodd’s connection to the sub-prime industry is in an oversight capacity. As a member and then Chairman of the Senate Banking Committee, Mr. Dodd was responsible for oversight of the financial sector of the United States Economy. One of the other notorious sub-prime lenders, Countrywide Financial, gave Mr. Dodd among others a sweetheart mortgage not available to the general public.
Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.
Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide’s “V.I.P.” program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.
Patrick and Dodd were both partially responsible for the sub-prime train-wreck that destroyed the United States and World Economy. Both are now being rewarded by President Obama with fundraisers in order to save their floundering political careers. Why would President Obama do this? Well beyond the fact that both are Democratics?
The answer my friend is blowing in the political wind, it’s Healthcare “Reform”. Chris Dodd is a crucial vote in the US Senate for Barack Obama’s agenda. Governor Patrick delivered a change in the US Senate Succession law in Massachusetts, ensuring another vote for the President’s agenda.
As an interesting footnote, there is also another connection through Ted Kennedy to the story. Deval Patrick needed to change the law due to the death of Senator Kennedy, and Chris Dodd was once the other piece of bread in a Kennedy-Dodd waitress sandwich at La Brasserie in 1985.