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Mitt Romney, Wall Street Money and the Housing Crisis: For the Captors, Not the Rescuers

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So let me get this straight: Romney's biggest backers are the very folks who sent the economy off the rails, threw millions out of work and out of their homes while enriching themselves, then gorged themselves on federal bailout funds, which they used to continue paying themselves ginormous bonuses -- and now he's calling the people who ended up on food stamps the grifters????

This marks the one year anniversary of Occupy Wall Street and the four year anniversary of the crash of the financial markets in the wake of Lehman Brothers' bankruptcy. To mark the occasion Campaign for a Fair Settlement is releasing a report showing just how deeply embedded Wall Street and the financial industry have become in the Romney campaign, and how closely Romney's positions echo those of the banking industry.

While the Romney campaign has refused to release the names of its bundlers, lists published by the media and analyzed by researchers show that the financial industry comprises the largest single sector of his support. Among these are executives of the firms most responsible for having crashed the financial markets, brought down the economy, robbed households of trillions of dollars in home equity, and required trillions more in public funds to bail them out.

These individuals and their firms have engaged in the worst abuses in an industry that ran wild. They include:

  • Shady dealers like John Paulson, whose Abacus scheme with Goldman Sachs stands out as among the very worst scams in derivatives based on the sub-prime mortgage market
  • Lobbyists like T. Martin Fiorentino, who represented the crooked foreclosure mill Lender Processing Services, parent company of DocX
  • Snake oil salesmen like hedge fund manager John Devaney, who inflated the bubble with promises of huge returns based on investments he knew were junk
  • Accounting giants like Ernst and Young, which, as in the Enron and earlier scandals, worked hand in hand with the biggest banks to conceal their shaky liquidity and mislead investors
  • Bailout kings like AIG founder Hank Greenberg, who ran their firms into the ground, reaping outrageous personal rewards while leaving taxpayers to pick up the pieces
  • Executives and contributors from these firms are Mitt Romney's top source of campaign money. Yet the firms themselves are serial offenders, having been fined tens of billions of dollars to resolve fraud cases relating to the mortgage and housing crisis.

And they show no signs of changing their ways. The top firms and their executives have yet to face criminal charges or suffer financial penalties commensurate with their crimes.

Even so, they have shifted their funding dramatically towards Mitt Romney and Republicans in 2012. Though he has said little about these issues, Governor Romney has placed himself squarely on the side of the financial industry and in opposition to homeowners and consumers:

  • He has offered no real plans for assisting struggling homeowners or fixing the housing market
  • He has even called for repeal of legislation passed after Enron and other major accounting scandals to prevent similar fraud and abuse

Even President George W. Bush came to recognize the need to crack down hard on financial fraud. When he signed the Sarbanes-Oxley bill into law
he said,

The era of low standards and false profits is over...No boardroom in America is above or beyond the law.''

By contrast, here's what Romney has said:

By the way, when I get rid of Obamacare and I get rid of Dodd-Frank and I get rid of Sarbanes-Oxley, it doesn't mean I don't want to have any law or any regulation...It means I want to make sure it's modern, it's updated, it goes after the bad guys, but it also encourages the good guys.

Our report lays out the facts in detail, showing just who Mitt Romney thinks "the good guys" are, and how he seems intent on taking us back to that era of low standards and false profits.

Voters as well as reporters covering the campaign need to challenge the candidate to provide much more information and many more answers than he's given to date. Otherwise we're left to conclude that he's essentially a shill for the very people whose greed, recklessness and criminality brought the economy to its knees.

Here are questions we have for Governor Romney:

  1. Have the Justice Department and other federal law enforcers done enough to investigate and prosecute the bankers and lenders who engaged in reckless or deceptive practices leading up to the financial meltdown? If not, what steps would you take to energize such efforts?
  2. You're on record calling for repeal of Dodd-Frank. With what would you replace it?
  3. Does the country really need a Consumer Financial Protection Bureau with that exclusive mission? Do you support any of various congressional proposals to limit the CFPB's funding or independence?
  4. One of the centerpieces of Dodd-Frank was an effort to bring rules and light to the shadowy world of derivatives. Do you support or oppose efforts by many in Congress, with financial sector support, to exempt large areas of the derivatives market from new regulations?
  5. You're also on record saying you'd repeal Sarbanes-Oxley. How would you then propose to protect us against the kind of rampant accounting fraud that led to the major scandals in whose wake the law was passed?
  6. You've said you believe the housing market "needs to hit bottom," and that you're against resetting mortgages to fair market value. Do you believe that markets just fix themselves?
  7. Your housing plan calls for facilitating "foreclosure alternatives for those who cannot afford to pay their mortgage." What exactly do you mean by that?
  8. Generally speaking, do you believe that Wall Street has wielded too much influence in Washington? If so, what would you do to reduce its political clout?