Molly Ivins warned us about AIG

More specifically, about Phil Gramm:

October 26, 1999

AUSTIN, Texas — I feel vaguely like Henry Higgins in "My Fair Lady," announcing with gleefully inhumane relish: "She'll regret it, she'll regret it! Ha!"

"I can see her now, Mrs. Freddy Eynsford-Hill, in a wretched little flat above the store!

"I can see her now, not a penny in the till, and the bill collectors knocking at the door!"

Which is to say, the new banking bill is a thoroughly lousy idea, and the party most likely to regret it is us.

The 1999 Gramm-Leach Act is about to replace the 1933 Glass-Steagall Act, with the result that bankers, brokers and insurance companies can all get into one another's business. It's a done deal except for the final vote on the conference-committee agreement. The inevitable result will be a wave of mergers creating gigantic financial entities.

"Too Big to Fail" will be the new order of the day. And guess who gets left holding the bag when they're too big to fail? One of these monsters goes down, and it will cost as much as the whole S&L debacle.

And Molly also warned us about Gramm's Commodity Futures Trading Act, a 262-page amendment which he slipped into an omnibus appropriations bill moving toward passage as Congress was preparing to head home for the Christmas recess in 2000.

December 24, 2000

Just before it left town last week, Congress passed a little horror called the Commodity Futures Modernization Act of 2000, brought to us courtesy of heavy lobbying by Wall Street banks and investment brokers.

Frank Portnoy, writing in The New York Times, describes the bill thusly: "First, it lifts a long-standing ban on futures trading in individual stocks, thus allowing investors to buy shares through brokers with very little money down. Second, it protects a lucrative business for bankers — the private financial contracts known as swaps — from being regulated. ... Investors are affected by swaps because they are ... used by many mutual funds and publicly traded companies."

*heavy sigh*

Third Appeals insists 'funds' aren't checks

This has to do with Tom Delay protectorates David Puryear and Alan Waldrop, whose sordid tales of corruption have been detailed previously. Harvey Kronberg, his emphasis:

In a 3-2 ruling (yesterday), Republican Justices Pemberton, Puryear and Waldrop prevailed over Democratic Justices Patterson and Henson.

At issue was whether or not to have the full Court of Appeals rehear a controversial decision late last year that ruled, among other things, that the Texas money laundering statute was unconstitutionally vague. Their argument was the statute used the term "funds" rather than "check"

Defendants John Colyandro and Jim Ellis have been in the soup because of their role in an alleged money laundering scheme in former Majority Tom DeLay's Texans for a Republican Majority. They were accused of sending unusable corporate contributions (illegal in Texas) to the Republican National Committee in DC and having identical amounts routed back as sanitized dollars.

After ignoring prosecutors request for an expedited review and sitting on the case for nearly three years, a three judge panel last year broke along party lines and raised questions about the legitimacy of the indictment.

In a scathing dissent, Democrat Justice Patterson pointed to last minute changes in court procedure and expressed amazement that the court resolved issues not before it -- like the vagueness of the money laundering statute.

Capitol Annex links to Patterson's dissent, and adds:

Perhaps the most interesting thing about the Court’s opinion is that it --until overruled -- sets a precedent under which the state district courts in the 24-county region that makes up the Third Court of Appeals District could throw out all money laundering convictions involving checks prior to the 2005 law change since the court has construed the meaning of “funds” not to include checks for the purpose of Texas’ money laundering statute prior to 2005.

That's worth repeating: corporate political contributions made by check -- laundered specifically to evade the law in Texas -- don't meet the definition of the word "funds", as defined by the three GOP judges on the Third Court of Appeals.

Presumably this case will now go to the Texas Supreme Court -- where Republicans have a 9-0 "majority".