Monday, July 21, 2008

Obama Finance Director is Failed Subprime Banker

There's some dabate this morning as to whether the media's not just in the tank for Barack Obama, but whether there's a vast left-wing conspiracy to put the Illinois Senator in the White House.

Rasmussen, for example, reports that 49 percent of voters believe that media outlets are trying to help Obama with their coverage, up from 44 percent a month ago. What's more, CBS News asks, "Is Obama Getting Too Much Coverage?" And it's not just that: The New York Times has apparently rejected John McCain op-ed rebuttal to Obama's "Plan for Iraq" from last week.

On a related note, there's some left-wing agitation of late surrounding Randy Scheunemann, a top-foreign policy advisor to McCain. According to
Lindsay Beyerstein:

John McCain's senior foreign policy adviser is a close business associate of Stephen Payne, the lobbyist caught on tape offering access to top administration officials in exchange for donations to the Bush Library.

This is explosive news because Payne's company's entire business model is international influence peddling in exchange for oil and gas leases from politically unstable and dictatorial regimes.
Presumably, Beyerstein's looking to expand Congress' Stephen Payne/Worldwide Strategic Partners cash-for-access probe of the Bush administration to the McCain campaign. As Beyerstein notes, emphatically:

Scheunemann, is listed as a member of Worldwide Strategic Energy's executive team...
Interesting, neither Beyerstein nor other contingents in the leftosphere are chumming the scandal waters this morning over the Wall Street Journal's report that Penny Pritzker, the national campaign finance chair of the Obama presidential campaign, is a former director of Superior Bank, an Illinois subprime institution half-owned by the Pritzker family. The bank's collapse resulted in the loss of savings for 1,400 depositors, and the institution was subject to a FDIC reorganization plan costing taxpayers tens of millions of dollars:

For the Pritzker family of Chicago, the 2001 collapse of subprime-mortgage lender Superior Bank was an embarrassing failure in a corner of their giant business empire.

Billionaire Penny Pritzker helped run Hinsdale, Ill.-based Superior, overseeing her family's 50% ownership stake. She now serves as Barack Obama's national campaign-finance chairwoman, which means her banking past could prove to be an embarrassment to her - and perhaps to the campaign.

Superior was seized in 2001 and later closed by federal regulators. Government investigators and consumer advocates have contended that Superior engaged in unsound financial activities and predatory lending practices. Ms. Pritzker, a longtime friend and supporter of Sen. Obama, served for a time as Superior's chairman, and later sat on the board of its holding company.
Sen. Obama has long criticized predatory subprime mortgage lenders and urged strong actions against them.

In a prepared statement, the Obama campaign noted that Ms. Pritzker was never accused of wrongdoing by regulators in connection with Superior, and that her family agreed to pay $460 million to help defray the costs of Superior's collapse.

In a written response to questions, Ms. Pritzker said the reasons for Superior's fall "were complex. They include changes in accounting practices, auditing failures, reversals in regulatory positions and general economic conditions." During her tenure at the thrift, she said, she believed it followed "ethical business practices" and complied with "fair lending laws." For years, she said, Superior's financial statements were found to be acceptable by regulators.

The Obama campaign recently faced a controversy related to mortgage lending. A member of Sen. Obama's vice-presidential selection committee resigned after a
Wall Street Journal story said he received favorable treatment on personal loans from Countrywide Financial Corp., a major subprime lender.

Ms. Pritzker's connection to Superior dates to the late 1980s, when the late Jay Pritzker, her uncle and then the family patriarch, moved to buy from federal regulators a troubled Illinois savings and loan. Ms. Pritzker, who has law and business degrees from Stanford, was to be the venture's chairman, said Mr. Pritzker's partner on the deal, New York real-estate developer Alvin Dworman, in a December 2006 deposition. "Jay bought the bank for her," he said in the deposition, taken in connection with litigation in Illinois state court related to the collapse. Mr. Dworman declined a recent interview request. Ms. Pritzker, in her statement, said she never heard her uncle mention her as a reason for the purchase.

Ms. Pritzker served as Superior chairman until 1994. During that period, Superior "embarked on a business strategy of significant growth into subprime home mortgages," which were then packaged into securities and sold to investors, according to a 2002 report by the Treasury Department's Inspector General.

"Superior was at the forefront of the securitizing of subprime mortgages," says Timothy Anderson, a retired bank consultant who has studied Superior and other failed thrifts.

If we use the same logic that Beyestein employs to suggest "explosive" implications for Scheunemann ties to Worldwide Strategic Energy, we should see similar outrage regarding Ms. Pritzker's background as subprime banking predator.

It is highly contradictory that Barack Obama employs a subprime lending boss as his finance director, when
his own campaign platform on the economy pledges to "crack down on fraudulent brokers and lenders."

Recall that Barack Obama has
a catastrophic record of failure in housing policy as an Illinois state legislator. He's also a machine politician, and in the case of Penny Pritzker, it appears that Obama finds no conflict of interest in favoring billionaire banking magnates who are on record as bilking small-time investors of their personal nest eggs.

More change we can believe in?