Galvin alleged that Bear Stearns and UBS violated a 2003 settlement barring self-interested stock research, an agreement that followed the Nasdaq crash of 2000. Wall Street firms also paid hefty fines after regulators accused analysts of writing biased research reports to win lucrative investment deals from companies the analysts covered.
As part of the global settlement, firms promised to keep their sell-side operations away from the investment banking side.
"Recent revelations that research analysts issued positive reports on mortgage lenders...even as those companies faced more and more defaults suggests that the commitment of 2003 has not been met," Galvin said in a prepared statement. Gramm’s Baggage
There’s still more baggage that comes with Gramm’s connection to the McCain campaign, especially as it tries to reestablish McCain’s reputation as a maverick opposed to the corrupt ways of Washington.
As chairman of the Senate Banking Committee in 1999, Gramm pushed through legislation undoing the Depression-era Glass-Steagall Act by eliminating the wall between heavily regulated commercial banks and lightly regulated investment banks.
Some economists blame this deregulation for contributing to the rapid growth in sub-prime mortgage lending, its securitization into investment bundles and thus the recent crisis in the mortgage markets that has pushed the U.S. economy to the brink of a major recession.
In 2000, Gramm shepherded through another anti-regulatory law that lightened up government oversight of energy-commodity trading. Houston-based Enron and other energy traders exploited the changes in a scheme to drive up California energy prices and gouge consumers out of an estimated $40 billion. [See Consortiumnews.com’s “McCain Defends Enron Loophole.”]
Nevertheless, McCain has made clear he won’t throw his old friend over the side. There’s even talk that Gramm could expect an appointment as Treasury Secretary in a McCain administration.
Plus, there are positive political aspects. Gramm’s anti-regulatory and pro-business record has bolstered McCain’s standing with economic conservatives, an important Republican constituency.
So, despite Gramm’s troublesome connections to UBS lobbying, the sub-prime mess and the Enron scandal, McCain’s “econ brain” appears to remain firmly in place.
Jason Leopold is editor of the online investigative news magazine The Public Record, http://www.pubrecord.org, and the author of the National Bestseller, "News Junkie," a memoir. Visit www.newsjunkiebook.com for a preview. He is also a two-time winner of the Project Censored award, most recently, in 2007, for an investigative story related to Halliburton's work in Iran. He was recently named the recipient of the Military Religious Freedom Foundation's Thomas Jefferson Award for a series of stories he wrote that exposed how soldiers in Iraq and Afghanistan have been pressured to accept fundamentalist Christianity.
It should be pointed out that UBS has donated more to Obama than any other candidate this season. UBS AG donated $370,130 to Obama and UBS AG donated $93,815 to McCain
by
POdVet (0 articles, 0 quicklinks, 0 diaries, 31 comments)
on Thursday, June 5, 2008 at 5:53:34 PM
is, I believe, a Swiss bank. What the heck is what is essentially a foreign entity doing donating to our presidential candidates in the first place?
How about total public financing for candidates who qualify?
How about jail terms at hard labor for lobbyists who write our laws, influence our legislators or other national leaders, or otherwise pimp for a narrow band of special interest groups? Come to that, instead of calling them lobbyists, why not just refer to them as pimps. (okay, I guess that is one too far-gives pimps a bad name).
Come to think of it, how about jail terms at hard labor for politicians who receive these handouts?
We could still make a cut for non profits and NGO's to present material to Congress with out having to put up with the rubbish of having some damn bank or other business interest or party of wealth butting into our national business by trying to turn the heads of our pols with campaign contributions. Let them compete in legitimate hearings and be heard that way, instead of through lobbyists behind closed doors.
by
Jack Harrington (0 articles, 0 quicklinks, 0 diaries, 401 comments)
on Saturday, June 7, 2008 at 12:20:03 PM
2 comments
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