CounterPunch February 1-16, 2008 vol. 15, no. 3

“The top contributors to the Obama campaign are the very Wall Street firms
whose shady mortgage lenders buried the elderly and the poor and [minorities]
under predatory loans.”

Obama’s Money Cartel

How he’s fronted for the most vicious firms on Wall Street

By Pam Martens

source: thephoenix.comWall Street, known variously as a barren wasteland for diversity or the
last plantation in America, has defied courts and the Equal Employment
Opportunity Commission (EEOC) for decades in its failure to hire blacks as
stockbrokers. Now it’s marshalling its money machine to elect a black man
to the highest office in the land. Why isn’t the press curious about this?

Walk into any of the largest Wall Street brokerage firms today and you’ll
see a self-portrait of upper management racism and sexism: women sitting at
secretarial desks outside fancy offices occupied by predominantly white
males. According to the EEOC as well as the recent racial discrimination
class actions filed against UBS and Merrill Lynch, blacks make up between 1
per cent to 3.5 per cent of stockbrokers - and this after 30 years of
litigation, settlements and empty promises to do better by the largest Wall
Street firms.

The first clue to an entrenched white male bastion seeking a black male
occupant in the oval office (having placed only five blacks in the U.S.
Senate in the last two centuries) appeared this month on a chart at the
Center for Responsive Politics website. It was a list of the 20 top
contributors to the Barack Obama campaign, and it looked like one of those
comprehension tests where you match up things that go together and
eliminate those that don’t. Of the 20 top contributors, I eliminated six
that didn’t compute. I was now looking at a sight only slightly less
frightening to democracy than a Diebold voting machine. It was a Wall
Street cartel of financial firms, their registered lobbyists, and go-to law
firms that have a death grip on our federal government.

Why is the “yes, we can” candidate in bed with this cartel? How can we, the
people, make change if Obama’s money backers block our ability to be heard?

Seven of the Obama campaign’s top 14 donors consist of officers and
employees of the same Wall Street firms charged time and again with looting
the public and newly implicated in originating and/or bundling fraudulently
made mortgages. These latest frauds have left thousands of children in some
of our largest minority communities coming home from school to see eviction
notices and foreclosure signs nailed to their front doors. Those scars will
last a lifetime.

These seven Wall Street firms are (in order of money given): Goldman Sachs,
UBS AG, Lehman Brothers, JP Morgan Chase, Citigroup, Morgan Stanley and
Credit Suisse. There is also a large hedge fund, Citadel Investment Group,
which is a major source of fee income to Wall Street. There are five large
corporate law firms that are also registered lobbyists; and one is a
corporate law firm that is no longer a registered lobbyist but does legal
work for Wall Street. The cumulative total of these 14 contributors through
February 1, 2008, was $2,872,128, and we’re still in the primary season.

But hasn’t Senator Obama repeatedly told us in ads and speeches and debates
that he wasn’t taking money from registered lobbyists? Hasn’t the press
given him a free pass on this statement?

Barack Obama, speaking in Greenville, South Carolina, on January 22, 2008:

“Washington lobbyists haven’t funded my campaign, they won’t run my White
House, and they will not drown out the voices of working Americans when I
am president”.

Barack Obama, in an email to supporters on June 25, 2007, as reported by
the Boston Globe:

“Candidates typically spend a week like this – right before the critical
June 30th financial reporting deadline – on the phone, day and night,
begging Washington lobbyists and special interest PACs to write huge
checks. Not me. Our campaign has rejected the money-for-influence game and
refused to accept funds from registered federal lobbyists and political
action committees”.

The Center for Responsive Politics’ website allows one to pull up the
filings made by lobbyists registering under the Lobbying Disclosure Act of
1995 with the clerk of the U.S. House of Representatives and secretary of
the U.S. Senate. These top five contributors to the Obama campaign have
filed as registered lobbyists: Sidley Austin LLP; Skadden, Arps, et al;
Jenner & Block; Kirkland & Ellis; Wilmerhale, aka Wilmer Cutler Pickering.

Is it possible that Senator Obama does not know that corporate law firms
are also frequently registered lobbyists? Or is he making a distinction
that because these funds are coming from the employees of these firms, he’s
not really taking money directly from registered lobbyists? That thesis
seems disingenuous when many of these individual donors own these law firms
as equity partners or shareholders and share in the profits generated from
lobbying.

Far from keeping his distance from lobbyists, Senator Obama and his
campaign seems to be brainstorming with them.

The political publication, The Hill, reported on December 20, 2007, that
three salaried aides on the Obama campaign were registered lobbyists for
dozens of corporations. (The Obama campaign said they had stopped lobbying
since joining the campaign.) Bob Bauer, counsel to the Obama campaign, is
an attorney with Perkins Coie. That law firm is also a registered lobbyist.

What might account for this persistent (but non-reality based) theme of
distancing the Obama campaign from lobbyists? Odds are it traces back to
one of the largest corporate lobbyist spending sprees in the history of
Washington whose details would cast an unwholesome pall on the Obama
campaign, unless our cognitive abilities are regularly bombarded with
abstract vacuities of hope and change and sentimental homages to Dr. King
and President Kennedy .

On February 10, 2005, Senator Obama voted in favor of the passage of the
Class Action Fairness Act of 2005. Senators Biden, Boxer, Byrd, Clinton,
Corzine, Durbin, Feingold, Kerry, Leahy, Reid and 16 other Democrats voted
against it. It passed the Senate 72-26 and was signed into law on February
18, 2005.

Here is an excerpt of remarks Senator Obama made on the Senate floor on
February 14, 2005, concerning the passage of this legislation:

“Every American deserves their day in court. This bill, while not perfect,
gives people that day while still providing the reasonable reforms
necessary to safeguard against the most blatant abuses of the system. I
also hope that the federal judiciary takes seriously their expanded role in
class action litigation, and upholds their responsibility to fairly certify
class actions so that they may protect our civil and consumer rights..”.

Three days before Senator Obama expressed that fateful yea vote, 14 state
attorneys general, including Lisa Madigan of Senator Obama’s home state of
Illinois, filed a letter with the Senate and House, pleading to stop the
passage of this corporate giveaway. The AGs wrote: “State attorneys general
frequently investigate and bring actions against defendants who have caused
harm to our citizens... In some instances, such actions have been brought
with the attorney general acting as the class representative for the
consumers of the state. We are concerned that certain provisions of S.5
might be misinterpreted to impede the ability of the attorneys general to
bring such actions...”

The Senate also received a desperate plea from more than 40 civil rights
and labor organizations, including the NAACP, Lawyers Committee for Civil
Rights Under Law, Human Rights Campaign, American Civil Liberties Union,
Center for Justice and Democracy, Legal Momentum (formerly NOW Legal
Defense and Education Fund), and Alliance for Justice. They wrote as
follows:

“Under the [Class Action Fairness Act of 2005], citizens are denied the
right to use their own state courts to bring class actions against
corporations that violate these state wage and hour and state civil rights
laws, even where that corporation has hundreds of employees in that state.
Moving these state law cases into federal court will delay and likely deny
justice for working men and women and victims of discrimination. The
federal courts are already overburdened. Additionally, federal courts are
less likely to certify classes or provide relief for violations of state
law”.

This legislation, which dramatically impaired labor rights, consumer rights
and civil rights, involved five years of pressure from 100 corporations,
475 lobbyists, tens of millions of corporate dollars buying influence in
our government, and the active participation of the Wall Street firms now
funding the Obama campaign. “The Civil Justice Reform Group, a business
alliance comprising general counsels from Fortune 100 firms, was
instrumental in drafting the class-action bill”, says Public Citizen.

One of the hardest-working registered lobbyists to push this corporate
giveaway was the law firm Mayer-Brown, hired by the leading business lobby
group, the U.S. Chamber of Commerce. According to the Center for Responsive
Politics, the Chamber of Commerce spent $16 million in just 2003, lobbying
the government on various business issues, including class action reform.

According to a 2003 report from Public Citizen, Mayer-Brown’s class-action
lobbyists included “Mark Gitenstein, former chief counsel to the Senate
Judiciary Committee and a leading architect of the Senate strategy in
support of class-action legislation; John Schmitz, who was deputy counsel
to President George H.W. Bush; David McIntosh, former Republican
congressman from Indiana; and Jeffrey Lewis, who was on the staffs of both
Sen. John Breaux (D-La) and Rep. Billy Tauzin (R-La).”

While not on the Center for Responsive Politics list of the top 20
contributors to the Obama presidential campaign, Mayer-Brown’s partners and
employees are in rarefied company, giving a total of $92,817 through
December 31, 2007, to the Obama campaign. (The firm is also defending
Merrill Lynch in court against charges of racial discrimination.)

Senator Obama graduated Harvard Law magna cum laude and was the first black
president of the Harvard Law Review. Given those credentials, one assumes
that he understood the ramifications to the poor and middle class in this
country as he helped to gut one of the few weapons left to seek justice
against giant corporations and their legions of giant law firms. The
class-action vehicle confers upon each citizen one of the most powerful
rights in our society: the ability to function as a private attorney
general and seek redress for wrongs inflicted on ourselves as well as for
those similarly injured that might not otherwise have a voice.

Those rights should have been strengthened, not restricted, at this
dangerous time in our nation’s history. According to a comprehensive report
from the nonprofit group, United for a Fair Economy, over the past eight
years the total loss of wealth for people of color is between $164 billion
and $213 billion, for subprime loans which is the greatest loss of wealth
for people of color in modern history:

“According to federal data, people of color are three times more likely to
have subprime loans: high-cost loans account for 55 per cent of loans to
blacks, but only 17 per cent of loans to whites”.

If there had been equitable distribution of subprime loans, losses for
white people would be 44.5 per cent higher and losses for people of color
would be about 24 per cent lower. “This is evidence of systemic prejudice
and institutional racism.”

Before the current crisis, based on improvements in median household net
worth, it would take 594 more years for blacks to achieve parity with
whites. The current crisis is likely to stretch this even further.

So, how should we react when we learn that the top contributors to the
Obama campaign are the very Wall Street firms whose shady mortgage lenders
buried the elderly and the poor and minority under predatory loans? How
should we react when we learn that on the big donor list is Citigroup,
whose former employee at CitiFinancial testified to the Federal Trade
Commission that it was standard practice to target people based on race and
educational level, with the sales force winning bonuses called “Rocopoly
Money” (like a sick board game), after “blitz” nights of soliciting loans
by phone? How should we react when we learn that these very same firms, arm
in arm with their corporate lawyers and registered lobbyists, have weakened
our ability to fight back with the class-action vehicle?

Should there be any doubt left as to who owns our government? The very same
cast of characters making the Obama hit parade of campaign loot are the
clever creators of the industry solutions to the wave of foreclosures
gripping this nation’s poor and middle class, effectively putting the
solution in the hands of the robbers. The names of these programs (that
have failed to make a dent in the problem) have the same vacuous ring: Hope
Now; Project Lifeline.

Senator Obama has become the inspiration and role model to millions of
children and young people in this country. He has only two paths now: to be
a dream maker or a dream killer. CP.

Pam Martens worked on Wall Street for 21 years; she has no securities
position, long or short, in any company mentioned in this article. She
writes on public interest issues from New Hampshire. She can be reached at
pamk741@aol.com