Probably telecom dualopolists AT&T and Verizon now hate NYS AG Eric Schneiderman as much as the banksters do -- and the more corrupt state AGs

Iowa AG Tom Miller: He's shocked, shocked, that anyone could question his toughness with the banks after he raised hundreds of thousands of simoleons from the financial sector upon announcing his intent to "investigate" the banks, which he has done so, so hard. I bet the joke'll be on the banksters when Tom hurls all that filthy lucre back at their stinking feet! (Anytime now, Tom.)



by Ken



Before we descend to the hilarity of sleazebag of the week Tom Miller, let's make sure to get the news out -- and this is big news, regarding what was looking like an unstoppable takeover of T-Mobile by AT&T. From Bloomberg:

U.S. Files to Block AT&T, T-Mobile Merger



By Tom Schoenberg, Sara Forden and Jeff Bliss - Aug 31, 2011



The U.S. Justice Department sued to block AT&T Inc.’s proposed $39 billion takeover of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market.



The government is seeking a declaration that AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law, according to a complaint filed today in federal court in Washington. The U.S. also asked for a court order blocking implementation of the deal, the largest announced acquisition of the year, according to data compiled by Bloomberg.



“I don’t see any room to settle the case,” said Bert Foer, head of the American Antitrust Institute in Washington, in an interview. “They have clearly drawn a line in the sand.”



AT&T Chief Executive Officer Randall Stephenson’s proposed purchase of Bellevue, Washington-based T-Mobile, announced in March, would combine the second- and fourth-largest carriers to create a new market leader ahead of No. 1 Verizon Wireless. The new company would dwarf current No. 3 carrier Sprint Nextel Corp. (S), which argued against the deal.



“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the government said in court papers. Dallas-based AT&T fell as much as 5.5 percent in New York trading after Bloomberg News broke the news of the lawsuit. . . .

Now I don't suppose the DoJ is likely to discuss how it reached the decision to intervene, but there's good reason to think that some role, and possibly a major one, was played by the office of New York State Attorney General Eric Schneiderman. Antitrust Bureau Chief Richard Schwartz issued a statement today saying that his boss "looks forward to reviewing the Department of Justice’s complaint to determine the best course forward on behalf of New York consumers and businesses."

Since March, Attorney General Schneiderman has played a major role in the review of the proposed AT&T, T-Mobile merger. Working in close partnership with the Department of Justice, this office has played a leadership role in a group of 26 states conducting interviews and gathering evidence central to this investigation. We have conducted numerous interviews of business enterprise customers throughout New York State and throughout the country to assess whether the merger would result in harm to competition to the business enterprise market, and closely analyzed the parties' claims that the merger would lower costs and improve service to consumers.



Attorney General Schneiderman remains particularly concerned that the proposed merger would stifle competition in markets that are crucial to New York's consumers and businesses. This includes concerns about vulnerable upstate communities, where concentration in some markets is already very high, and the impacts on New York City’s information-intensive economy, which is particularly dependent on mobile wireless services. Simply put, the impacts of this proposed merger on wireless competition, economic growth, and technological innovation could be enormous.

(The release notes that Schneiderman announced in March "that this office would conduct a comprehensive review of the proposed merger.")



It comes as something of a surprise to think that there are people with decision-making authority in the DoJ who might actually be listening to AG Schneiderman. The last we heard, he was being kicked off of the the coalition of state AGs' executive committee that's been exploring some sort of settlement with the big banks over their conduct in the collapsed mortgage industry, presumably out of pique over Schneiderman's outspoken opposition to the proposed "settlement," whereby the banksters would kick in some cash in exchange for being relieved of pretty much any further liability -- allowing them, in other words, to "move on" rather than being forced forever to "look back."



Which is apparently how we address all major problems in the 21st century. We just move on



To be sure, Schneiderman isn't alone among the state AGs. There's a small but hardy band (necessarily hardy, considering how they're regarded by most of their fellows) who also take their oath of office seriously. That number emphatically doesn't include the Big Cheese of the state AGs, Iowa's Tom Miller, the man who masterminded the "settlement" and the man who apparently gave Schneiderman the boot.



Miller meanwhile is feeling aggrieved. His longtime sidekick, Assistant AG Patrick Madigan, whined:

We’ve been accused of being in bed with the banks. To say that to a group of people who have spent the last seven to 10 years fighting mortgage abuses day in and day out is an insult of the highest order. It's just unreal.

Yeah, Pat, an insult of the highest order. Just unreal. I expect you and Tom were really insulted by the unreal Taibblog post Matt Taibbi wrote back in April, titled "Best Way to Raise Campaign Money? Investigate Banks," which began:

A hilarious report has come out courtesy of the National Institute of Money in State Politics, showing that Iowa Attorney General Tom Miller – who is coordinating the investigation into the banks’ improper mortgage dealings – increased his campaign contributions from the finance sector this year by a factor of 88! He has raised $261,445 from finance, insurance and real estate contributors since he announced that he was going to be coordinating the investigation into improper foreclosure practices. That is 88 times as much as they gave him not over last year, but over the previous decade.



This is about as perfect an example of how American politics works as you’ll ever see. This foreclosure issue is a monstrous story that is somehow escaping national headlines; essentially, all of the largest banks in the country have been engaged in an ongoing fraud and tax evasion scheme that among other things has resulted in many hundreds of billions in investor losses, and hundreds of thousands of improper foreclosures. Last week, the 14 largest mortgage lenders a group that includes bailout all-stars like Citigroup, Bank of America and Wells Fargo, managed to negotiate a settlement with the federal government that will mandate some financial relief to homeowners who have been victims of improper foreclosure practices. It’s unclear yet exactly what damages and fines will be involved in the federal settlement, or how many homeowners will be affected. But certainly there are some who believe the federal settlement was a political end-run around the states’ efforts to extract their own deal from the banks.

"If the banks had to pay what they actually owed" from their mortgage-related malfeasances, Taibbi wrote, "they would probably all go out of business."



In a dandy post on Tom 'n' Pat's Iowhining, Marcy Wheeler takes a closer look at this "fighting mortgage abuses" that, according to Pat, he and Tom have been doing day in and day out these past seven to ten years. (Doesn't that three-year spread leave a lot of days-to-days unaccounted for?) Notes Marcy:

As in the settlement they signed onto with Countrywide in 2008? The one that–according to NV Attorney General Catherine Cortez Masto, Bank of America has basically blown off?

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.



The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

(See DDay for more on Masto’s complaint.)



Perhaps Madigan doesn’t understand this. But pointing to a settlement that, in retrospect, appears to have largely been a PR stunt as proof that you’re not in bed with the banks sort of proves the point that you are.

Back in April, Matt Taibbi ventured that the flow of cash from people in and around the mortgage industry to Tom Miller was "just something to keep an eye on," adding, "It would be interesting to see a similar analysis on the money these same characters have thrown at the Obama administration in the last year."



Interesting indeed -- I wonder if anyone ever did such an analysis. As he wrote of the bonanza Tom Miller created for himself by making noises about investigating the banks: "This is about as perfect an example of how American politics works as you’ll ever see."



At least for today, however, on the matter of the AT&T takeover of T-Mobile, the Justice Department has taken a different path. It's something.

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Austerity, Rigour... And Why Do Rich People Always Just Get Greedier When They Get Richer?

Market jitters? The American financial industry is pointing to Europe and warning that a collapse of the banking system there could be nigh-- and could be catastrophic for everyone.

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group's implosion nearly three years ago.



Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender's bonds against default is now £343,540.



The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.



"The problem is a shortage of liquidity-- that is what is causing the problems with the banks. It feels exactly as it felt in 2008," said one senior London-based bank executive.



"I think we are heading for a market shock in September or October that will match anything we have ever seen before," said a senior credit banker at a major European bank.

France isn't calling it Austerity, but the proud nation is being dragged into the clutches of the banksters and calling it a "rigour package." Compared to the Austerity measures being proposed in the U.S.-- Obama even floated a trial balloon yesterday that sounded like bringing back indentured servitude-- the French version sounds down right benign.

The measures in the rigour package, dubbed by some the "financial turn of the screw," include:



• An "exceptional contribution" of 3% on taxable earnings for those earning above €500,000 to remain in place until France's deficit had been reduced to 3% of GDP.



• Higher taxes on tobacco and alcohol.



• A modification of capital gains tax on property.



...Among other measures, Nicolas Sarkozy, the French president, is reported to be considering the abandonment of tax-free overtime for workers. This was one of the measures that, under the slogan "work harder to earn more," was a pillar of his election campaign in 2005, but it has cost an estimated €4.5bn in lost revenues. The government is also looking at ending tax breaks for companies.



Having recently abolished the "financial shield," which set a limit on the total amount of tax that the rich were expected to pay, a new tax on the wealthy would avoid accusations that his austerity measures would hit those lower down the income scale in the run-up to next year's elections.



France and Germany are also discussing proposals for a tax on financial transactions-- a measure that is vehemently opposed by Britain.

Not just Britain... Wall Street is going insane at the idea and is spending millions of dollars in lobbying and in direct bribes campaign contributions to it's most dedicated mouthpieces in government. The 25 worst Wall Street shills in the House (this year only):

John Boehner (R-OH)- $986,787

Eric Cantor (R-VA)- $610,250

Chris Murphy (D-CT)- $380,500

Jeb Hensarling (R-TX)- $350,350

Dave Camp (R-MI)- $343,800

Scott Garrett (R-NJ)- $320,185

Ed Royce (R-CA)- $318,004

Kevin McCarthy (R-CA)- $315,200

Spencer Bachus (R-AL)- $309,115

Pat Tiberi (R-OH)- $300,549

Steve Stivers (R-OH)- $282,485

Robert Dold (R-IL)- $272,006

Nan Hayworth (R-NY)- $240,006

Jim Himes (D-CT)- $233,500

Steny Hoyer (D-MD)- $226,670

Randy Neugebauer (R-TX)- $224,133

Steve Israel (D-NY)- $204,000

Carolyn Maloney (D-NY)- $199,750

Debbie Wasserman Schultz (D-FL)- $197,900

Joseph Crowley (D-NY)- $193,750

Shelley Berkley (D-NV)- $189,660

Peter Roskam (R-IL)- $188,700

Denny Rehberg (R-MT)- $187,330

Francisco Canseco (R-TX)- $183,852

Paul Ryan (R-WI)- $181,400

Bolded names are members of the Financial Services Committee, charged with "regulating" the banksters to keep them from ripping off consumers and society at large. Alan Grayson was on that committee when he was in Congress. Wall Street wasn't giving him money then and, now that he's campaigning to get back into Congress they're not donating to him either. I called Alan-- who's just back from a trip to Ghana-- this morning to get his take on all this. He told me he "always found it puzzling that business interests gave lockstep support to Republicans, despite their fondness for auctioning off the law to the highest bidder." He was just warming up:

The Republican Party may be the party of Big Business, but it is also the party of Economic Failure.

 

Let’s take the stock market, that very apt measure of how rich the rich are.  In Tommy McCall’s classic 2008 article Bulls, Bears, Donkeys and Elephants, he pointed out that $10,000 invested in the stock market under Democratic presidents would have grown to $300,671, while $10,000 invested under Republican presidents would have “grown” to $11,733. That’s a 2907% Democratic profit versus a 17% Republican profit. Is that still true? Sure enough, the stock market started to recover less than one month after Barack Obama was sworn in.

 

Since federal spending alone now equals almost a quarter of GNP, is it really good for business to make government small enough to “drown in the bathtub,” as Grover Norquist always demands?

 

And how, exactly, is the banking system supposed to function without regulations? Reserve requirements are regulations. They are the only limits on the banks’ unbridled speculation and gambling with other people’s money. Remove the regulations and a crash will quickly follow. That wouldn’t be good for business.

 

Republican economic mismanagement takes down both the rich and the poor. In other countries, the rich seem to understand that, but not here. Here, the blanket support for Republicans by Big Business and the filthy rich amounts to an economic death wish.

 

There is an old saying: “if you’re so smart, how come you ain’t rich?” I have a different question: when it comes to political self-interest, how can rich people be so dumb?

If we can't count on Congress to protect us-- and we can't-- who can we turn to? That was the whole idea of why Elizabeth Warren came up with the Consumer Financial Protection Bureau-- and why Wall Street fought so hard to cut it off at the knees. Obama has been nearly as friendly to Wall Street as any Republican president and it would be foolish to expect him to change his stripes. Matt Taibbi has done some great reporting in Rolling Stone about one of the few places where consumers can look for redress: New York's crusading Attorney General, Eric Schneiderman. Basically, Wall Street and their political puppets-- from Obama and the GOP to the rest of the states' attorney generals-- have "cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes." Schneiderman is the odd man out.

The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.



This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.  



...But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don’t have a deal. They need the certainty of having all 50 states and the federal government on board, or else it’s not worth paying anybody off. To quote the immortal Tony Montana, “How do I know you’re the last cop I’m gonna have to grease?” They need all the dirty cops on board, or else the whole enterprise is FUBAR. 



In addition to the global settlement, Schneiderman is also blocking an individual $8.5 billion settlement for Countrywide investors. He has sued to stop that deal, claiming it could “compromise investors’ claims in exchange for a payment representing a fraction of the losses.”



If Schneiderman thinks $8.5 billion is an insufficient, fractional payoff just for defrauded Countrywide investors, then you can imagine how bad a $20 billion settlement for the entire industry would be for the victims.



In that particular Countrywide settlement deal, it looks like Bank of New York Mellon, the New York Fed, Pimco and other players negotiated on behalf of defrauded investors. They told the Times they were happy with the deal, but investors outside the talks told Gretchen they weren’t happy with the settlement.  



Schneiderman apparently listened to those voices instead of the Mellon-Fed-BofA crowd, which infuriated the insiders who struck the actual deal. In a remarkable quote given to the Times, Kathryn Wylde, the Fed board member who ostensibly represents the public, said the following about Schneiderman:



It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street-- love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.



This, again, is coming not from a Bank of America attorney, but from the person on the Fed board who is supposedly representing the public!



This quote leads one to wonder just what Wylde would consider “indefensible,” given that stealing is pretty much the worst thing that a bank can do-- and these banks just finished the longest and most orgiastic campaign of stealing in the history of money. Is Wylde waiting for Goldman and Citi to blow up a skyscraper? Dump dioxin into an orphanage? It’s really an incredible quote.

Remember this?







She's running for the Senate now, in Massachusetts, against Wall Street's "favorite" senator, Scott Brown. Wall Street and the financial services industry are financing his campaign. Can you help Elizabeth's? Our House candidates worthy of help, like Grayson, are on another page-- this one.

What happens when NYS AG Eric Schneiderman tries to hold the banksters to account? The White House puts the screws to him

New York State Attorney General Eric Schneiderman -- Glenn Greenwald reminds us today that he predicted in May there was likely to be rough going for Schneiderman for refusing to roll over for Wall Street and the banksters, but he "assumed the pressure would come from the banks themselves, not from top Executive Branch officials."





"It is high time to describe the Obama Administration by its proper name: corrupt."

-- Yves Smith, the opening paragraph of her Naked Capitalism blogpost "Corrupt Obama Administration Pressuring New York Attorney General to Support Mortgage Whitewash"

by Ken



I don't know about you, but this literally makes me sick to my stomach.



You may recall that NYS Attorney General Eric Schneiderman (formerly my very own state senator, whose election as AG was one of the few bright lights to come out of the 2010 election) has been one of the few public officials unwilling to close the books on the question of criminal culpability connected with the economic meltdown. For one thing, he has refused to go along with the proposed settlement many of the state attorneys general are prepared to accept which would administer a resounding slap on the wrist to the economy-wrecking banksters. And for another, he has pursued investigations of his own.



Naturally this has annoyed the bankster nabobs. Actually, it seems to have annoyed them quite a lot. They just want to get on with their lives, which they're able to do thanks to all that cash we dumped in their laps because we were told that if we didn't, the world would come to an end. For a lot of Americans, jobless and homeless, the world pretty much has come to an end. The banksters, meanwhile, are raking in the dough and giving themselves bonuses as if they'd never been doing better. (And maybe they hadn't.)



You know and I know that it wasn't just temporary lapses in judgment on the part of those rich and powerful banksters which brought the economy down, somehow without bring the rich and powerful banksters down with it. To a lot of people who know more about this stuff than I do, it's pretty clear that crimes were committed, and at the very least somebody in law enforcement should have been taking a damned close look at where the law may have been crossed and how those lawbreakers can be called to account. Is it really not obvious that failure to hold criminals to account for their criminal behavior (a) legitimizes it and (b) contributes to the already out of control contempt those people have for the law? If they've come to think of themselves as above the law, well, can you blame them? They are above the law, aren't they?



It seems the banksters were so peeved with this Schneiderman fellow that they sent shock waves rolling all the way to our nation's capital, where it has turned out they could hardly have wished for a friendlier reception. It's hard to imagine the most business-friendly Republican administration going into action more quickly or more forcefully, bringing pressure to bear on this Schneiderman fellow to get in line with the administration line.



Here's Gretchen Morgenson writing in the NYT:

Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal



Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.



In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.



Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.



But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation. . . .

Mouthpieces for Secretary Donovan and for various functionaries in the Justice Dept. (whose nominal boss, AG Eric Holder, has -- not exactly uncommonly -- been mostly invisible) have chirped back indignantly that no, they're really on the side of the besieged homeowners and muscling this Schneiderman fellow into being sensible will actually benefit the . . . oh, I'm sorry, it's too ridiculous even to repeat.



There's really nothing for me to add to what's already been written by some of the biggest guns in the noncaptive media: Marcy Wheeler ("2 Funny Things about Obama Administration’s Effort to Pressure Eric Schneiderman"; is it necessary to specify that Marcy doesn't mean ha-ha funny?), Yves Smith (the post from which I quoted at the top, "Corrupt Obama Administration Pressuring New York Attorney General to Support Mortgage Whitewash"), and Glenn Greenwald ("Obama administration takes tough stance on banks").



Glenn has the advantage of writing after, and quoting from, Marcy and Yves (Glenn also directs attention to "this article from Joseph Stiglitz on how failure to criminally prosecute mortgage fraud would destroy the rule of law"; the Stiglitz piece, by the way, is headed "Justice for Some"), though he's at pains to point out that he wrote in May "about the commendable -- one might say heroic -- efforts of New York State Attorney General Eric Schneiderman to single-handedly impose meaningful accountability on Wall Street banks for their role in the 2008 financial crisis and the mortgage fraud/foreclosure schemes."



Near the end of his piece today, Glenn quotes from the wind-down of his May post:

It is worth keeping a watchful eye on Schneiderman's investigative efforts and doing everything possible to provide what will undoubtedly be much-needed support if, as appears to be the case, he is serious about taking on these pernicious factions and impeding the conspiring by the political class to protect their benefactors/owners.

He adds now, though: "I assumed the pressure would come from the banks themselves, not from top Executive Branch officials." He goes on to suggest that it's not just the Senate that, as Senate Majority Whip Dick Durbin put it, the banks "frankly own" -- that they hold the deeds to both houses of Congress and another piece of property on Pennsylvania Avenue as well.



Its present tenant seems to be doing all he can to ensure that the next one is the likes of, say, Willard (I'm thinking Willard Romney should be known by just one name, like Charo or Cher) or Rick Perry.

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