Tag: Politics

New York State Attorney General Eric Schneiderman filed suit today in New York State Supreme Court in Brooklyn charging them with deceptive and fraudulent practices that harmed homeowners and undermined the judicial foreclosure process. From Mr. Schneiderman’s office:

NEW YORK – Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as “MERS certifying officers,” have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. The lawsuit names JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., as well as Virginia-based MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc.

The lawsuit further asserts that the MERS System has effectively eliminated homeowners’ and the public’s ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.” [..]

The lawsuit specifically charges that the defendants have engaged in the following fraudulent and deceptive practices:

   

MERS has filed over 13,000 foreclosure actions against New York homeowners listing itself as the plaintiff, but in many instances, MERS lacked the legal authority to foreclose and did not own or hold the promissory note, despite saying otherwise in court submissions.

   

MERS certifying officers, including employees and agents of JPMorgan Chase, Bank of America, and Wells Fargo, have repeatedly executed and submitted in court legal documents purporting to assign the mortgage and/or note to the foreclosing party. These documents contain numerous defects, including affirmative misrepresentations of fact, which render them false, deceptive, and/or invalid. These assignments were often automatically generated and “robosigned” by individuals who did not review the underlying property ownership records, confirm the documents’ accuracy, or even read the documents. These false and defective assignments often masked gaps in the chain of title and the foreclosing party’s inability to establish its authority to foreclose, and as a result have misled homeowners and the courts.

   

MERS’ indiscriminate use of non-employee “certifying officers” to execute vital legal documents has confused, misled, and deceived homeowners and the courts and made it difficult to ascertain whether a party actually has the right to foreclose. MERS certifying officers have regularly executed and submitted in court mortgage assignments and other legal documents on behalf of MERS without disclosing that they are not MERS employees, but instead are employed by other entities, such as the mortgage servicer filing the case or its counsel. The signature line just indicates that the individual is an “Assistant Secretary,” “Vice President,” or other officer of MERS. Indeed, these documents often purport to assign the mortgage to the certifying officer’s own employer. Moreover, as a result of the defendants’ failure to track the designation of certifying officers and the scope of their authority to act, individuals have executed legal documents on behalf of MERS, such as mortgage assignments and loan modifications, when they were either not designated as a MERS certifying officer at the time or were not authorized to execute documents on behalf of MERS with respect to the subject loan.

   

MERS and its members have deceived and misled borrowers about the importance and ramifications of MERS’ role with respect to their loan by providing inadequate disclosures.

   

The MERS System is riddled with inaccuracies which make it difficult to verify the chain of title for a loan or the current note-holder, and creates confusion among stakeholders who rely on the information. In addition, as a result of these inaccuracies, MERS has filed mortgage satisfactions against the wrong property.

The lawsuit seeks a declaration that the alleged practices violate the law, as well as injunctive relief, damages for harmed homeowners, and civil penalties. The lawsuit also seeks a court order requiring defendants to take all actions necessary to cure any title defects and clear any improper liens resulting from their fraudulent and deceptive acts and practices.

Schneiderman has still not signed onto the Federal agreement and the final terms of that agreement are still pretty vague as no one has actually seen the final document but they have been given until February 6 to sign on to it.  Precisely how this suit, or the one file this week by Illinois AG against Nationwide, will effect or be effected by that agreement is anyone’s guess. But there is a lot of speculation. Happy Friday news dump  

Nothing surprising about the revelation in today’s New York Times that the SEC has failed to get tough with the big banks but it does highlight how Occupy Wall St. has change this conversation in the traditional media that is now taking a more critical look at what is wrong with the economy and why. Despite all the whining from the agency that it doesn’t have the resources or the tools, when in fact it does but has refused to use them against the biggest and repeat offenders. The SEC has repeatedly granted waivers to the laws and regulations that stop fraud:

JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has “a strong record of compliance with securities laws.” Bank of America and Merrill Lynch, which merged in 2009, have settled 15 fraud cases and received at least 39 waivers.

Only about a dozen companies – Dell, General Electric and United Rentals among them – have felt the full force of the law after issuing misleading information about their businesses. Citigroup was the only major Wall Street bank among them. In 11 years, it settled six fraud cases and received 25 waivers before it lost most of its privileges in 2010.

The SEC also does keep an organized data base of the waivers it granted, so in its investigation the NYT’s had do some digging but found some very telling facts about the SEC’s failures to protect investors while protecting the big banks from lawsuits and prosecution:

JPMorganChase is among the big Wall Street firms that have been granted multiple waivers with nearly every settlement of S.E.C. fraud charges. Last July, it agreed to pay $228 million to settle civil and criminal charges that it cheated cities and towns by rigging bids with other Wall Street firms to invest the money raised by several municipalities for capital projects.

JPMorgan received three waivers related to that case for privileges that it otherwise would have lost. But the S.E.C. said the company’s fraudulent actions didn’t involve misleading investors about JPMorgan’s business. [..]

Despite six securities fraud settlements in 13 years, JPMorgan rarely if ever lost any special privileges. It has been awarded at least 22 waivers since 2003, with most of its S.E.C. settlements generating two or more. In seeking the reprieves, lawyers for JPMorgan stated in letters to the S.E.C. that it should grant a waiver because the company has “a strong record of compliance with the securities laws.”

JPMorgan isn’t the only big bank that has received a pass on fraud from the SEC, Bank of America has been a recipient of favored status:

In 2009, the S.E.C. was negotiating with Bank of America over charges that it had failed to disclose to shareholders that billions of dollars in bonuses were being paid to Merrill Lynch executives just as Bank of America was bailing out the firm.

Because the S.E.C. charges involved fraudulent statements by both Bank of America and Merrill Lynch about their financial status, the merged company was in danger of losing its special privileges for both offerings and forecasts. [..]

It settled the case by agreeing to a $150 million payment. The S.E.C., however, decided not to charge the bank with fraud, which could have endangered the bank’s special status. Instead, the S.E.C. charged Bank of America with violating disclosure rules for shareholder materials and proxies, and Bank of America kept its privileges.

It took years before the SEC finally took action against Citigroup for its violations of rules and regulations but in 2010. That only happened because Citibank blatantly lied to its investors about the amount of risk it was carrying on its balance sheets. In its disclosure the bank stated that it was only holding $13 billion in risks when in reality it was $50 billion. It settled the case for $75 million but because of the falsification of its financial statement it lost the ability to insulate itself from lawsuits over mistaken predictions about its business and had to wait weeks for the SEC’s approvals to make itself eligible to sell stocks, bonds and other securities to the public. Prior to those sanctions Citibank had settled six fraud cases and received 25 waivers. Meanwhile JPMorgan, Gold Sachs and others have avoided sanctions and continue their fraudulent practices.

Yves Smith at naked capitalism in pointing out the significance of this article makes this observation:

What the article does not make quite clear is the SEC rationale for this double standard. I’d hazard that it’s that big financial players are often in the market raising funds, and restricting their access is, well, just a bit too mean since they are money junkies. Just look how hard it was for Citi when it fell out of the SEC’s most favored nations status and lost its ability to use so-called “shelf registrations” to sell stock and bonds:

   And the companies continue to use rules that let them instantly raise money publicly, without waiting weeks for government approvals. Without the waivers, the companies could not move as quickly as rivals that had not settled fraud charges to sell stocks or bonds when market conditions were most favorable.

OMG, if you break the law, you might be put at a competitive disadvantage! Can’t have that, now can we?

She concludes:

[..] As we have said, one of basic rules of regulating is to make sure the regulated know you are not cowed by them. When I was a young person working on Wall Street, investment banks were afraid of the SEC. By contrast, this article reveals, as many have suspected, that regulators have plenty of tools to bring banks to heel. They choose not to use them.

The SEC does have a defense of sorts, which is (as we have recounted) that Congress has cut off funding when it merely tried to be tough in defending retail investors from abuses under Arthur Levitt in the 1990s. The passivity of the SEC is a symptom of elite corruption. A reform-minded President could choose to cross swords with Congress and defend the agency against harassment for tough minded enforcement. But that would be in a parallel universe where the banks were not in charge.

It was the Occupy Wall St. movement and a handful of state attorneys general who have changed the conversation from protecting the 1% to investigating them and looking at their practices and the agencies that regulate them with a more critical eye.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

New York Times Editorial: A Painful Betrayal

With its roster of corporate sponsors and the pink ribbons that lend a halo to almost any kind of product you can think of, the Susan G. Komen for the Cure foundation has a longstanding reputation as a staunch protector of women’s health. That reputation suffered a grievous, perhaps mortal, wound this week from the news that Komen, the world’s largest breast cancer organization, decided to betray that mission. It threw itself into the middle of one of America’s nastiest political battles, on the side of hard-right forces working to demonize Planned Parenthood and undermine women’s health and freedom. [..]

In addition to harming women, the foundation has also tarnished, perhaps permanently, its brand, symbolized by the pink ribbon that adorns yogurt cups and running shoes and tote bags and Federal Premium Ammunition’s pink shotgun shells. Companies like Ford Motor, Dell and Yoplait may not find the same value in identifying themselves with the foundation after its sharp departure from political neutrality.

Paul Krugman: Romney Isn’t Concerned

If you’re an American down on your luck, Mitt Romney has a message for you: He doesn’t feel your pain. Earlier this week, Mr. Romney told a startled CNN interviewer, “I’m not concerned about the very poor. We have a safety net there.”

Faced with criticism, the candidate has claimed that he didn’t mean what he seemed to mean, and that his words were taken out of context. But he quite clearly did mean what he said. And the more context you give to his statement, the worse it gets.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

William Rivers Pitt’s reflection on the 10th anniversary of his first article for truthout is an inspirational message to all writers and why to keep writing more and often.

William Rivers Pitt: This Is What I Know

“A man who carries a cat by the tail learns something he can learn in no other way.”

~ Mark Twain

A bottle of whiskey, a shot glass, and an article to write.

I’m not going to lie and say this particular combination hasn’t come together before on my desk, but it has been rare enough to be considered special, and here we are. You see, something struck me out of the clear blue a while ago: the very first article of mine Truthout ever published happened somewhere in early 2002, so I did a little digging with the help of my Facebook friends, and hot damn, there it was: “Hell to Pay,” published on January 17, 2002. [..]

Yeah, we have plenty of work to do yet.

The rage is still there.

I said this a long time ago, many times over, but it is worth repeating: I do not expect to see the things I fight for happen in my lifetime. Matters have gone far beyond that. I expect to fail, to die in defeat. That does not matter to me. The fight is worth waging because these things matter, and I intend to give the years I have left to that fight, no matter the outcome. Sooner or later, we will prevail. Write it down; I just did. I probably won’t be here to see it, but victory is its own reward, because a better world is possible, and that is all that matters.

A bottle of whiskey, a shot glass, and an article to write.

Here’s to you, to us, to this.

Here’s to getting it done.

Here’s to the next ten years. May they be better than the last

(emphasis mine)

Michelle Chen: In Year of Uprisings, Reporters Brave Crackdowns from Wall St. to Tahrir Square

You wouldn’t think handling a notebook or a camera could be a hazardous line of work. But according to the latest global Press Freedom Index, abuse and oppression of reporters has made journalism an increasingly risky job in many countries. The past year has even left a notable taint on the U.S. press, despite the country’s mythos as a beacon of free expression.

While the United States certainly hasn’t descended into the ranks of the most oppressive regimes, the watchdog group Reporters without Borders observes that in 2011 the political barriers and outright attacks facing reporters had led to a steep drop in the rankings-27 places down, to number 47:

   In the space of two months in the United States, more than 25 [journalists] were subjected to arrests and beatings at the hands of police who were quick to issue indictments for inappropriate behaviour, public nuisance or even lack of accreditation.

The most high-profile violations of press freedom took place during the Occupy protests, as reporters were abused by police and otherwise stonewalled by authorities.

Nothing is as it seems and all the optimism about how the mortgage settlement with the banks was about to be sealed with a kiss turns about to be premature. With a deadline of February 3 for states to declare whether they are joining the settlement, some major questions have been raised about just what the definition of “narrow” is for the Obama administration.

From Yves Smith at naked capitalism.

Yet More Mortgage Settlement Lies: Release Looks Broad, Not Narrow; Other States Screwed to Bribe California to Join

While there is every reason to believe there has been some improvement in terms due to the resistance of Schneiderman and other state attorneys general (Beau Biden of Delaware, Martha Coakley of Massachusetts, Catherine Cortez Masto of Nevada, and Kamala Harris of California), the notion that, per Mike Lux, “the settlement release is tight” appears to be patently false.

Since there has yet to be any disclosure of the draft terms, we can’t be certain, but a reading of a letter sent by Nevada’s Masto gives plenty of cause for pause. Reaching inferences from her 38 questions is a Plato’s cave exercise, but some of the items seem pretty clear. [..]

Yves explains the concerns that the banks would be released of liability of not just robosigning but chain of title securitizations and origination issues. She then get to the latter from Nevada Attorney General Catherine Cortez Masto who submitted a letter to settlement negotiators

Most of her queries are sufficiently technical so as to make it hard to guess with any certainty as to what the language of the agreement might be, but two questions at the top stood out:

This certainly looks as if Masto sees the origination release as broad. Asking for an itemization of what is NOT included suggests a lot seems to be included.

But this is the whopper:

From early on, we have stressed that this is a cash for release deal, and this looks like a VERY big release. The banks will pay an amount into the fund, and all issues relating to robo-signing and foreclosure will be released by the AGs: the banks will have a state level release from all bad assignment/transfer issues. [..]

Remember, bank executives piously swore in 2010 that they stopped robosigning, yet their firms continue to engage in that practice.

Then there is the matter of trying to bribe California’s AG Kamala Harris back into the fold by giving California 60% of the $25 billion. She notes this article from the Financial Times by Shahien Nasiripour

   California, home to the largest US property market, spurned an offer of roughly $15bn in lower monthly mortgage payments and reduced loan balances for its residents in talks to settle allegations of mortgage-related misdeeds by leading US banks…

   California would have received more than half of about $25bn of aid that would be available to borrowers in a nationwide deal under discussion to settle allegations that banks illegally seized homes using faulty documentation.

   Deal terms, sent to state attorneys-general late last week after nearly a year of talks between the banks and various states and federal agencies, did not include guaranteed minimums for any other states, people familiar with the matter said. Various state officials said they were unaware of the California offer.

Yves notes that AG Masto in question #24 asks for clarification of how much each state would receive.

I agree with Yves that it’s hard to imagine how any attorney general could sign onto this agreement and begs to question why Florida’s AG Pam Bondi would be pushing California to sign on to this and not pushing for a better settlement for the homeowners of her state. Masto certainly did her homework as David Dayen at FDL News Desk noted:

n other words, Masto did her homework and saw this settlement as little more than a framework, without specificity on the release, the level of relief on a per-state basis, and the level of enforcement. Or, in other words, everything. And by the way, they want an answer by the end of the week. That’s clear at the end of Masto’s letter, where she writes: “Because there is a sign-on deadline of February 3, 2012, I need this information as soon as possible to allow my office to continue to evaluate the proposal on behalf of the state of Nevada.”

Every AG should be asking these same questions including Eric Schneiderman.

And that leads to the question of Eric Schneiderman and his motivations for sitting on the sideline and not opposing what appears to be a walk from liability for the banks and screw the homeowners. This is a very disappointing development and it won’t win Obama any votes either.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day

For some of us on the left, we were never invited to the “party.”

Taylor Marsh: The Party’s Over

There’s a reason Obama reelect doesn’t have a slogan.

All they’ve got is a question: Are you in? [..]

George W. Bush inspired the rise of the Tea Party, so one hoped that Barack Obama’s repeated applications of conservatism would unleash a requisite uprising on the left. However, there has been no challenge to Pres. Obama, with progressives in Congress and outside groups again and again rallying for him, while choosing to ignore his choice of conservatism over progressivism.

Pres. Obama can’t find a reelection slogan because his 2012 campaign boils down to the reality that “hope and change” has been reduced to “Republicans are worse.”

That’s not good enough for me anymore.

Katrina venden Heuvel: Eric Schneiderman: The Right Man, the Right Moment

In his State of the Union address last week, President Obama announced what Robert Kuttner, co-editor of The American Prospect, describes as maybe “the most fateful political and economic development of the election year”-the formation of an inter-agency task force to finally investigate the mortgage and lending practices that led to the collapse of the economy and trillions of dollars in lost wealth, with New York Attorney General Eric Schneiderman named as co-chair.

It remains to be seen whether Schneiderman will be given the extensive resources and manpower he needs to conduct a thorough and aggressive investigation, or if the Wall Street faction within the Administration will stonewall the process. But I’m confident in this: Schneiderman is the right man for the job and he’s not about to let himself be co-opted for the President’s reelection bid. Throughout his career he’s been a steadfast champion of causes because they are right, not because they are popular or politically expedient. He’s been successful because he works to move voters closer to his positions, and sets a course toward a better future and better possibilities. If he’s being obstructed, he’ll let people know.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Maira Sutton and Parker Higgins: We Have Every Right to Be Furious About ACTA

If there’s one thing that encapsulates what’s wrong with the way government functions today, ACTA is it. You wouldn’t know it from the name, but the Anti-Counterfeiting Trade Agreement is a plurilateral agreement designed to broaden and extend existing intellectual property (IP) enforcement laws to the Internet. While it was only negotiated between a few countries,1 it has global consequences. First because it will create new rules for the Internet, and second, because its standards will be applied to other countries through the U.S.’s annual Special 301 process. Negotiated in secret, ACTA bypassed checks and balances of existing international IP norm-setting bodies, without any meaningful input from national parliaments, policymakers, or their citizens. Worse still, the agreement creates a new global institution, an “ACTA Committee” to oversee its implementation and interpretation that will be made up of unelected members with no legal obligation to be transparent in their proceedings. Both in substance and in process, ACTA embodies an outdated top-down, arbitrary approach to government that is out of step with modern notions of participatory democracy.

The EU and 22 of its 27 member states signed ACTA yesterday in Tokyo. This news is neither momentous nor surprising. This is but the latest step in more than three years of non-transparent negotiations. In December, the Council of the European Union-one of the European Union’s two legislative bodies, composed of executives from the 27 EU member states-adopted ACTA during a completely unrelated meeting on agriculture and fisheries. Of course, this is not the end of the story in the EU. For ACTA to be adopted as EU law, the European Parliament has to vote on whether to accept or reject it.

Jim Hightower: Buying Our Future

Sheldon Adelson, a Las Vegas-based global casino baron who has long been a major funder of far-right-wing causes, is Newt Gingrich’s very special political pal.

Already, four of the top GOP presidential contenders have dropped out. Michele Bachmann went first, because she was too wacky, followed by Jon Huntsman, because he was too sane. Herman Cain gave up because he was too exposed, and Rick Perry because he was too dim-witted.

But the greatest surprise is the sudden surge of the Adelson campaign. Little-known until now, Adelson was the big winner in South Carolina, has made his mark in Florida, and looks to have the political kick needed to go the distance.

Never heard of the Adelson campaign? It’s the married duo of Sheldon and Miriam, neither of whom is actually on the ballot. Rather, they are running on the cash ticket.

Over the weekend Occupy Oakland attempted to occupy an abandoned building into into a community center to provide education, medical, and housing services for the 99%. Police responded with tear gas, rubber bullets, beanbag rounds and mass arrests. From Occupy Oakland Media

January 29, 2011 – Oakland, CA – Yesterday, the Oakland Police deployed hundreds of officers in riot gear so as to prevent Occupy Oakland from putting a building, vacant for 6 years with no plans for use, from being occupied and “re-purposed” as a community center. The Occupy Oakland GA passed a proposal calling for the space to be turned into a social center, convergence center and headquarters of the Occupy Oakland movement.

The police actions tonight cost the city of Oakland hundreds of thousands of dollars, and they repeatedly violated their own crowd control guidelines and protesters civil rights.

With all the problems in our city, should preventing activists from putting a vacant building to better use be their highest priority? Was it worth the hundreds of thousands of dollars they spent?

The OPD is facing receivership based on actions by police in the past, and they have apparently learned nothing since October. On October 25, Occupiers rushed to the aid of Scott Olsen who was shot in the head by police, and the good Samaritans who rushed to his had had a grenade thrown at them by police. At 3:30pm this afternoon, OO medics yet again ran to the aid of injured protesters lying on the ground. Other occupiers ran forward and used shields to protect the medic and injured man. The police then repeatedly fired less lethal rounds at these people trying to protect and help an injured man.

No one condones throwing objects at police, violence or vandalism but it does not justify the overreaction by the Oakland police department use of military type weapons to stop unarmed protesters.

From Kevin Gosztola who describes the videos below in his reporting on the Occupy movement at FDL:

Recorded video footage from the scene shows officers did not give a dispersal order. They pushed protesters toward the YMCA and would not let them leave the scene as they ordered them to “submit” to the arrest. The protesters then did what anyone would do as a battalion of riot police closed in on them: they found the nearest escape route, which happened to be through an entrance to the building. [*See the 30-min mark of the video below.]

I will not condone the throwing of objects at police, but the video captured by Mills, who was also at the scene when percussion grenades, tear gas and other weapons were being fired by police, calls into question the [statements by the city  that protesters were “charging” police. Yes, they were advancing on the riot police, slowly. A handful, like any protest, were egging on the riot police. But, if you watch the video the moment the riot police move on the protesters they immediately fall back. They do not let the police charge into them, which raises doubts about whether it was ever necessary to fire off any chemical weapons at protesters to force the crowd to disperse.

Sunday night in solidarity with Oakland Occupiers took to the streets in cities across the country:

#SolidaritySunday with Oakland Marches in NYC and Across the US; Bank of Ideas Being Evicted in London

As of 8pm EST, actions are currently happening or planned in response to extreme police violence used against Occupy Oakland yesterday in New York City, Boston, Toronto, Vancouver, Melbourne, Oslo, Philadelphia, DC, Chicago, Los Angeles, Dallas, Portland, Tampa, Indianapolis, New Haven, Orlando, Jackson, Des Moines, Hollywood, Baltimore, Portland ME, Tulsa, Denver, St. Louis, Eugene, Nashville, and Detroit. We have also received word that the Bank of Ideas in London is being raided!

At noon today, Occupy DC faces a ban on camping in the parks but will remain in McPherson Square.

We stand with the Occupy Wall Street movement and the right to peaceful assembly.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

The opinion by Kuttner is an absolute must read.

Robert Kuttner: Eric Schneiderman: Hero or Goat?

The activation of the administration’s long dormant task force on criminal misconduct in the financial collapse, with New York’s progressive attorney general Eric Schneiderman as co-chair, could be the most fateful political and economic development of the election year. There are still immense pitfalls ahead, as Wall Street allies inside the administration and on Wall Street itself try to reduce Schneiderman’s role to that of symbolic fig leaf.

But President Obama has done something potentially momentous for which he deserves our praise, even if he himself does not fully grasp the implications. The significance of the shift is still in play, of course, and will be made clearer as events unfold over the next several weeks.

Some skeptics in the progressive community have raised questions both about the upside for Schneiderman and his motives. Given the administration’s feeble record on prosecutions to date, the critics are right to flag the likelihood that people like Attorney General Eric Holder and SEC enforcement chief Robert Khazumi will try to sandbag Schneiderman. But my reporting suggests that they underestimate both the man and the dynamics that have been set loose.

Paul Krugman: The Austerity Debacle

Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure – changes in real G.D.P. since the recession began – Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground.

Nor is Britain unique. Italy is also doing worse than it did in the 1930s – and with Spain clearly headed for a double-dip recession, that makes three of Europe’s big five economies members of the worse-than club. Yes, there are some caveats and complications. But this nonetheless represents a stunning failure of policy.

And it’s a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years.

The surprise announcement by President Barack Obama that he was appointing New York State’s Attorney General Eric Schneiderman to head a new group, the Residential Mortgage-Backed Securities Working Group, that would be investigating securities fraud from the housing bubble and financial crisis. The announcement elicited some interesting reactions from the President’s supporters and critics expressing both praise and doubt about the new committee and just how much force it would really have considering the other appointees to the panel. Public opinion seems to be that few if any of the real perpetrators of the housing bubble and financial crisis have been held accountable.

On Friday, the group held its first press conference. US Attorney General Eic Holder, along with Mr. Schneiderman and Housing Secretary Scott Donovan, explained the purpose of the group, on what it would be focusing some of its powers and announced it had already issued 11 subpoenas:

“We are wasting no time in aggressively pursuing any and all leads,” Mr. Holder said. “In sending out those subpoenas, we consulted with the S.E.C. in making a determination as to where they should go.” Officials would not say which companies received the subpoenas.

“We are not going to be looking at the same things they are examining,” he added. “We’re going to be working with them but looking at a separate group of institutions.”

Schneiderman added that by working together with the SEC, IRS and Justice Department state Attorneys Generals would give them more information with which to bring prosecutions and civil suits at the state level:

In addition, the New York State Martin Act, which gives the attorney general broad powers to elicit information during investigations, “is more flexible than federal securities laws,” Mr. Schneiderman said. The New York and Delaware attorneys general also have jurisdiction over the trusts that hold the mortgages that underlie the mortgage-backed securities, making them “the bricks and mortar of this entire structure.”

By coordinating their efforts, group members might be able to share documents and information that usually would be in individual agency silos, Mr. Holder said.

Friday evening, Schneiderman sat down for an interview with MSNB’s Rachel Maddow, where he further discussed the committee’s focus, the agencies that would be involved and the roll of the states. Dayen, who still has strong reservations about the RMBS working group, thinks that the group lacks serious substance mostly because the use of wording like “resolving allegations”, not “crimes” and the lack of supporting staff and the appearance of disinterest by Assistant Attorney General for the Criminal Division Lanny Breuer who was absent at the press conference. However, he does see some promise. In the past, the IRS was reluctant to get involved, but as David Dayen at FDL News Desk indicated there could be huge tax fraud implications:

But I want to pull out the sentence I highlighted previously in Schneiderman’s interview which shows that at least he is thinking creatively about this. He said that “We have the Internal Revenue Service in because there are huge tax fraud implications to some of the stuff that went on.” I suppose he could be talking about a few different things (like the tax evasion from the banks using MERS instead of recording mortgage transfers at public records offices and paying a fee), but my guess is he’s talking about REMIC claims.

REMICs are an acronym for Real Estate Mortgage Investment Conduits. When you’re talking about mortgage pools used in securitization, you’re talking about REMICs. And REMICs have special tax treatment; they are exempt from federal taxes provided they only invest in “qualified mortgages” and other permitted investments. Here’s the important part: under the 1986 Tax Reform Act, the REMIC must receive all of its assets in the trust within 90 days and the assets have to be performing (not in default). Any REMIC violations make the vehicle subject to a penalty tax of 100%, with additional penalties as they apply.

Well, the strong suspicion is that, during the bubble years, the trustees did not properly convey the mortgages to the REMICs. Which makes the whole investment vehicle a massive tax fraud. That’s a huge level of exposure. You’re talking about $3 trillion in REMICs.

This obviously goes much deeper than fraud.

I became Attorney General about a year ago and started digging into this, and realized that New York and Delaware, which is why my collaboration with Beau Biden was so important, we had a unique place. Because all of the mortgage-backed securities were actually pools of mortgages deposited into New York trusts or Delaware trusts. We started looking at what she’s talking about, did they actually get all the paperwork done, things like that. And we realized that there’s a lot of work to do but a lot of potential for proving liability. [..]

To get this done Rachel, you need resources, you need jurisdiction, and you need will. And when I stood there today with Eric Holder and my other colleagues in government and other prosecutors, I really felt that we had that level of commitment […] what we realized as we started to go back and forth over the last few months is that we all need to work together. There are situations that, New York’s securities law is a stronger law in some ways than the federal laws. Some of our statutes of limitations, though, are shorter. So we can’t go as far back. The federal statute is longer. We need everyone together. And the folks that we have in on this… the Consumer Financial Protection Bureau, Rich Cordray just, a whole array of new powers just came into existence with his appointment, which the President just got done very recently. That’s a huge addition. We have the Internal Revenue Service in, because there are huge tax fraud implications to some of the stuff that went on. All of the people who are in this, all of the agencies who are designated, working together, can achieve so much more than any one of us on our own.

h/t David Dayen for the transcript.

There is still a lot of doubt about this commission and it’s purpose and goals. Matt Stoller at naked capitalism is curious to know if this panel will indict Vikram Pandit, the CEO of Citibank, for possible violations of Sarbanes-Oxley. He sees two problems with this task force. The first is the Obama administration’s policy “to protect the banking system’s basic architecture, which means the compensation structure and the existing personnel who run these large institutions.” And secondly:

Obama personally believes in the legitimacy of the existing banking institutional framework and he strongly suspects that no crimes were committed.  He has hired a raft of people – including Jack Lew, Tim Geithner, Eric Holder, Larry Summers, and so on and so forth – who agree, and has implemented policies such as Dodd-Frank that assume as much. [..]

These people aren’t stupid, they aren’t without principles, and they aren’t electorally driven.  They are ideologues.  They really believe in a neoliberal political economy, where government throws money at the economy through private channels and private channels do with it whatever they think best.

That’s quite a conflict of ideologies. Stoller concludes with more questions and doubts:

There are many details of the task force that are as of yet not public, so it is not clear to me that doing a case like this is possible.  But it’s quite obvious that mega-bank officials and regulators lying about the perilous state of various financial institutions to the public was a key part of the crisis, and that accountability on this front is probably critical to restoring faith in the system.  It would certainly be a big statement upfront if this is what this task force attempted to take on.  Will it?  That’s a very good question, and one I hope we get answers to, soon.

Here’s hoping that this isn’t just an election year sham and Eric Schneiderman has the will to stand up to the Obama neoliberals.