ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Sunday, October 19, 2008

The Aristocracy of Pull - Schumer

More evidence of the coming Aristocracy of Pull in yesterday's WSJ. Apparently Schumer's ridiculously timed attack on IndyMac (forcing a run on the bank) had some significance - getting Democratic donors some cheap assets:

Schumer Ripped IndyMac as Democratic Donors Probed Books
By SUSAN SCHMIDT

New York Sen. Charles Schumer's public criticism of IndyMac Bancorp last summer, which critics say helped spark a run on deposits that took under the troubled thrift, came while IndyMac's assets were being eyed by investors who are major donors to the Democratic Senate campaign committee the senator chairs.

Sen. Schumer, chairman of a Senate banking subcommittee, was criticized at the time for publicly raising questions about the bank's solvency and regulators' oversight of it. What wasn't known then was that a group of potential investors, led by Los Angeles-based Oaktree Capital Management LP, had been inside the bank looking over its books. They had already decided not to invest in the bank, but were scouting assets that might become available if the bank failed and was taken over by the government.

Sen. Schumer's office said recently he didn't know anything about Oaktree's possible interest in IndyMac until after the bank failed. Oaktree Chairman Howard Marks said he never talked to the senator about IndyMac.

The bank's demise in June now is almost a footnote in the financial-sector problems that have exploded in succeeding months. Still, Sen. Schumer's fund-raising involvement with investors looking over the bank underscores how Democrats' entanglements with the financial industry will make it hard for them to score political points over the market upheavals in the remaining weeks of the election.
[...]
But Democrats themselves have close ties to the financial industry, as well as to the mortgage industry. Indeed, figures from the nonpartisan Center for Responsive Politics indicate that more than half the campaign contributions that the securities and investment industry has made in the past two years have gone to Democrats -- more than $61 million.
[...]

Speaking of ties to the financial industry and its meltdown, I would also like to point out that Dick Fuld, CEO of Lehman Brothers, is a significant Democratic contributor:

(Click image to see the list of donations from Dick Fuld to Democratic legislators who regulated his industry and were running for president.)


Your Co-Conspirator,
ARC: St Wendeler