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".

Stanford Financial and Ben Barnes -- and the big picture

Truly remarkable how he is connected to all these scandals:

From the Sharpstown banking fraud that ended his political career to the current financial collapse of his lobby client Stanford Financial Group, former Texas Lt. Gov. Ben Barnes has played a constant character on the stage of state and national scandals. ...

Most recently, Barnes surfaced when the Securities and Exchange Commission last month filed a fraud lawsuit against his client Stanford Financial Group and its founder R. Allen Stanford. When Stanford was missing, Barnes was the person who confirmed that he had been served with the lawsuit.

Barnes’ lobby firm earned $1.8 million representing Stanford Financial between 2002 and 2008, working issues ranging from federal regulation of offshore banks to tax codes for the U.S. Virgin Islands. Barnes was surprised by the company’s collapse.

“It’s hard to believe. Our firm wasn’t hired to look at the books or do anything with the business,” Barnes said.

Over the years, Barnes has been associated with the 1971 Sharpstown scandal, the collapse of his real estate business with former Gov. John Connally, the GTECH lobbying controversy at the Texas lottery, and (Dan) Rather’s 60 Minutes report in 2004 on President George W. Bush’s service in the Texas Air National Guard.

Did you know that Barnes was once labeled the "51st senator" by Tom Daschle? I didn't:

Barnes is one of the top money-raisers for Democratic U.S. senators. He and his wife, Melanie, personally gave more than $600,000 to federal Democratic candidates and committees since 2004. Barnes last month donated $1 million to the Lyndon B. Johnson School of Public Affairs at the University of Texas.

When the U.S. Senate was evenly divided early in this decade, then-Majority Leader Tom Daschle called Barnes the “51st senator.”

Democratic Senatorial Campaign Committee Chairman Sen. Chuck Schumer at a New York luncheon for 250 committee donors last year singled out only two fund-raisers with exceptional praise. Barnes was one.

The clients Barnes has represented before Congress have paid his firm $24 million since 1999. They include:

• Texas top trial lawyers John Eddie Williams of Houston, Wayne Reaud of Beaumont and Harold Nix of Daingerfield.

• Ruth Parasol, an Internet gambling entrepreneur from California who first made a fortune off of Internet pornography, earning her the nickname of “Princess of Porn” in the British press.

• GloFish, an Austin company that markets genetically altered tropical fish that glow in the dark.

• The Huntsman Cancer Institute in Utah for which Barnes says he obtained a $100 million appropriation for cancer research.

• Moynihan Station Developer LLC, a company renovating New York’s Penn Station, tearing down Madison Square Gardens and renovating 16 blocks of Manhattan.

Financial corruption -- or at least his nearly constant association with those who are financially corrupt -- has been a hallmark of Ben Barnes' life.

If the Democratic party wants to avoid traveling down the same path as the Republicans, it needs to end its association with Barnes and his ilk.

(Yes, I hear the peals of laughter.)

Separating fact fom blarney

No, this is not a post about the latest conservative hypocrisy. Today I am Perry Hussein O'Reilly:

Up until the mid-nineteenth century, most Irish immigrants in America were members of the Protestant middle class. When the Great Potato Famine hit Ireland in 1845, close to a million poor, uneducated, Catholic Irish began to pour into America to escape starvation. Despised for their religious beliefs and funny accents by the American Protestant majority, the immigrants had trouble finding even menial jobs. When Irish Americans in the country's cities took to the streets on St. Patrick's Day to celebrate their heritage, newspapers portrayed them in cartoons as drunk, violent monkeys.

However, the Irish soon began to realize that their great numbers endowed them with a political power that had yet to be exploited. They started to organize, and their voting block, known as the "green machine," became an important swing vote for political hopefuls. Suddenly, annual St. Patrick's Day parades became a show of strength for Irish Americans, as well as a must-attend event for a slew of political candidates. In 1948, President Truman attended New York City 's St. Patrick's Day parade, a proud moment for the many Irish whose ancestors had to fight stereotypes and racial prejudice to find acceptance in America.

Watch "Gangs of New York" for another primer on the persecution of my people.