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Claim
DNC Ad Claims "Republicans Stood By While Wall Street Ran Wild" And "Looked The Other Way." "For years, Republicans stood by while Wall Street ran wild. Risky bets, lax regulations. When the economy collapsed, Republicans looked the other way." (DNC, "For Years," TV Ad, 4/19/10)
Facts
President Bill Clinton Admitted His Policies Regarding Fannie Mae, Freddie Mac Paved The Way For Current Financial Crisis. "Clinton ... said that Democrats weren't entirely blameless, stating that they should have highlighted problems with Fannie Mae and Freddie Mac and 'tried more aggressively to regulate derivatives.' He also acknowledged that there was possible danger in his administration's policy of pressing Fannie Mae, the mortgage company, to lower its credit standards for lower- and middle-income families seeking homes. 'I think, through the lens of this, it looks like that was true,' Clinton said." (Walter Alarkon, "Clinton Rejects Blame For Financial Crisis," The Hill, 9/25/08)
• And Former Clinton OMB Chief Put Fannie Mae In The Business Of Buying Sub-Prime Loans, Resisting Proper Government Oversight. "Under Raines's watch, Fannie started a pilot program to buy subprime mortgages and began buying home loans with no-money-down financing ... According to a report by Fannie Mae's regulator--The Office of Federal Housing Enterprise Oversight (O.F.H.E.O.)--Fannie Mae's lobbyists tried to insert language into an appropriations bill that would have reduced O.F.H.E.O.'s funding until its chief regulator, Armando Falcon, was fired ... [W]hen former congressman Richard Baker (Republican of Louisiana) called for a stronger regulator in 2000, Fannie Mae responded by calling his constituents, eliciting an avalanche of letters complaining he was trying to 'raise mortga ge costs.'"(Bruce Feirstein, "100 People To Blame," Vanity Fair, 9/25/09)
Clinton Also Signed Repeal Of Glass-Steagall Act That Allowed Banks To "Run Into Trouble," Leading To Their Bailouts. "But 10 years later, the end of Glass-Steagall has been blamed by some for many of the problems that led to last fall's financial crisis ... the huge banks born out of the revocation of Glass-Steagall, especially Citigroup, and the insurance companies that were allowed to deal in securities, like the American International Group, would not have run into trouble had the law still been in place ..." (Cyrus Sanati, "10 Years Later, Looking At Repeal Of Glass-Steagall," The New York Times, 11/12/09)
• Then-Treasury Secretary, Current Obama Economic Adviser, Larry Summers Said Repeal Would Improve Economy. "Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century ... This historic legislation will better enable American companies to compete in the new economy." (Cyrus Sanati, "10 Years Later, Looking At Repeal Of Glass-Steagall," The New York Times, 11/12/09)
And President Clinton Regrets Taking Advice Of Former Treasury Secretaries Robert Rubin And Larry Summers For His Failure To Regulate The Derivatives Market. "Former President Bill Clinton said his Treasury Secretaries Robert Rubin and Lawrence Summers were wrong in the advice they gave him about regulating derivatives when he was in office. 'I think they were wrong and I think I was wrong to take' their advice, Clinton said in an interview on ABC's 'This Week' program broadcast yesterday." (Joshua Zumbrun, "Clinton Calls Advice He Received On Derivatives 'Wrong'" Bloomberg , 4/19/10)
• Clinton Says Rubin And Summers Told Him Derivatives Didn't Need Transparency. "Their argument was that derivatives didn't need transparency because they were 'expensive and sophisticated and only a handful of people will buy them and they don't need any extra protection,' Clinton said. 'The flaw in that argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.'" (Joshua Zumbrun, "Clinton Calls Advice He Received On Derivatives 'Wrong'" Bloomberg, 4/19/10)
Claim
DNC Ad Claims That Republicans Are Working With Wall Street Lobbyists To "Block Reforms" To Financial Regulation. "Now Republicans are working with Wall Street lobbyists to block reforms ..." (DNC, "For Years," TV Ad, 4/19/10)
Facts
But Goldman Sachs Leaders Endorse Many Provisions Of Obama-Dodd Bailout Bill. "Given that much of the financial contagion was fueled by uncertainty about counterparties' balance sheets, we support measures that would require higher capital and liquidity levels, as well as the use of clearinghouses for standardized derivative transactions. More broadly, we support proposals that would improve transparency for investors and regulators and reduce systemic risk, including fair value ac counting." (Lloyd Blankfein & Gary D. Cohn, Goldman Sachs 2009 Annual Report, 4/7/10)
• Because In 2008 Election Cycle, President Obama Was The Largest Recipient Of Donations From JP Morgan, Goldman Sachs, Citi Group, AIG, Morgan Stanley And Bank Of America, Raking In Over $3,456,000. (Center for Responsive Politics, OpenSecrets.org, Accessed 4/16/10)
• Obama Received At Least $996,595 From Goldman Sachs During The 2008 Election. (Center for Responsive Politics, opensecrets.org, Accessed 4/20/10)
• And According To Center For Responsive Politics, Democrats Have Accepted At Least $7,125,624 From Goldman Sachs Since The 2006 Election Cycle. (Center for Responsive Politics, OpenSecrets.org, Accessed 4/16/10)
And It Was Obama Who Scuttled Bipartisan Negotiations Three Times To Use Financial Regulation Debate As Political Weapon. "[S]ome Democrats believe continued action after health care reform will show real momentum for their agenda. But others argue that the White House would be better off -- politically, anyway -- if Democrats could hit the campaign trail in the fall and blame ... Republicans for blocking the reform bill." (Manu Raju and Eamon Javers, "Dems Bristle At Reform Deadline," Politico, 4/5/10)
• FEBRUARY: White House Pulled Sen. Chris Dodd (D-CT) Away From Negotiation With Sen. Richard Shelby (R-AL). "Just six days earlier, Dodd had said he hit an impasse with Senator Richard Shelby, the committee's top Republican, in talks that have dragged on for more than a year over tightening oversight of banks and capital markets ... Gregg said he believes Dodd and Shelby had an agreement on consumer protection before talks broke off. 'If the white house hadn't sort of pulled back the Democratic membership on that issue, we could all go forward in a bipartisan way.'" (Kevin Drawbaugh, "GOP's Gregg Sees Progress On Financial Regulation," Reuters, 2/12/10
• MARCH: White House Pressured Dodd To Abandon Bipartisan Negotiations With Sen. Bob Corker (R-TN). "Dodd announced Thursday he would schedule a committee markup the week of March 22 even though he and Sen. Bob Corker (R-Tenn.) had not struck a final deal... Corker said negotiations were on 'the 5-yard line' and blamed politics ... for complicating the talks ... 'There is no question that White House politics and healthcare have kept us from getting to the goal line,' ..." (Silla Brush, "Banking Chairman Dodd To Go It Alone On Financial Overhaul," The Hill, 3/11/10)
• LAST WEEK: Sens. Blanche Lincoln (D-AR) And Saxby Chambliss (R-GA) Were Nearing Bipartisan Deal On Derivatives Until "White House Raised Objections To A Potential Compromise." "White House officials have raised objections to a potential compromise between Democrats and Republicans on the Senate Agriculture Committee regarding rules governing derivatives trading ... The pressure from the White House and Treasury Department could complicate the broader congressional effort to rework financial regulation, as it could derail a bipartisan deal. ... The Senate Agriculture Committee proposal, spearheaded by panel chairman Blanche Lincoln and Saxby Chambliss was seen by many as one of the few parts of the bill that could attract b ipartisan support." (Damian Paletta, "Hurdle Emerges To Financial Revamp," The Wall Street Journal, 4/13/10)
Claim
DNC Ad Claims Republicans Working Against Reforms "That Would Protect Consumers And Prevent A Future Bailout." "Republicans are working....to block reform, reforms that would protect consumers and prevent a future bailout. Tell Republicans it's time to reform Wall Street." (DNC, "For Years," TV Ad, 4/19/10)
Facts
But Federal Trade Commission Fears That Obama-Dodd Bill Could Have "Overall Result" Of "Less Protection For Consumers, And Fewer 'Cops On The Beat.'" "The Federal Trade Commission ... writes to express its strong and unanimous concerns with certain provisions in the 'Restoring American Financial Stability Act of 2010,' which was recently reported by the senate banking committee ... We fear that the overall result could be less protection for consumers, and fewer 'cops on the beat.'" "As this complex measure is currently drafted, however, it could inadvertently restrict the ability of the FTC - an independent, bipartisan agency - to work with a new Consumer Financial Protection Bureau ('Bureau') to stop unfair and deceptive practices that prey on consumers of fin ancial products and services. Moreover, as drafted, the Senate bill could even inhibit the FTC's authority with respect to nonfinancial products and services. In light of this, we fear that the overall result could be less protection for consumers, and fewer 'cops on the beat.'" (Federal Trade Commission, Letter To Sen. Hutchison, 4/16/10)
Rep. Brad Sherman (D-CA) Says Obama-Dodd Bill Has "Unlimited Executive Bailout Authority." "But there are serious problems with the Dodd bill. The Dodd bill has unlimited executive bailout authority. That's something Wall Street desperately wants but doesn't dare ask for. The bill contains permanent, unlimited bailout authority." (Politico's "Health Care Arena," 4/19/10)
• Obama-Dodd Bill Creates $50 Billion Permanent Bailout Fund That Senate Democrats Plan To Keep. (Page 277, S. 3217, Restoring American Financial Stability Act Of 2010, Introduced 4/15/10; Carrie Budoff Brown, "Dems Stand By $50B Fund," Politico, 4/19/10)
• Obama-Dodd Bill Could Lead To More Taxpayer-Funded Bailouts By Expanding Federal Reserve's Power To Establish "Policies And Procedures Governing Emergency Lending." (Page 1365, S. 3217, Restoring American Financial Stability Act Of 2010, Introduced 4/15/10)
• Obama-Dodd Bill Could Make Taxpayer-Funded Bailouts Even More Expensive By Allowing FDIC To Make "Additional Payments" To Firms That Backed Failed Financial Companies. (Page 245, S. 3217, Restoring American Financial Stability Act Of 2010, Introduced 4/15/10)
• Obama-Dodd Bill Uses Taxpayer Dollars To Guarantee Debt Of Banks And Bank Holding Companies Through The Power Federal Reserve And FDIC. (Page 1379, S. 3217, Restoring American Financial Stability Act Of 2010, Introduced 4/15/10)
• Obama-Dodd Bill Could Institutionalize Bailouts By Allowing A New Financial Oversight Council To Determine Which Companies Are "Too Big To Fail." (Page 35, S. 3217, Restoring American Financial Stability Act Of 2010, Introduced 4/15/10)
