[original post 4/20/2010]
Last week, in CFPA Czar or Fox in the Hen House? You Decide, I brought you more details about the people and structure of the ACORN-esque Center for Responsible Lending (CRL) and the Center for Community Self Help (CCSH) as part of a series of pieces we’ve been writing about the financial crisis and the proposed Consumer Financial Protection Agency (CFPA).
The importance of the pieces in this series cannot be understated. As Congress faces down a massive power-grabbing partisan financial reform bill this week, it seems to have lost sight of many of the causes of the financial crisis in the first place. While we hear about the exemptions in the bill of institutions like Fannie Mae and Freddie Mac, the stories we’ve been covering on CRL and CCSH further illustrate the dangers of unchecked entities and a government with too much intervention and far too much power.
At the peak of the subprime mortgage boom and the subsequent financial crisis, primary donors to CRL and CCSH basked in billions of dollars in pure profit, thanks in large part to that very intervention and power.
Next, we’re going to introduce you to the questionable lobbying activities of this complex organization. But before we do, let’s review a few pertinent details from our previous posts about this organization:
- John Paulson is the largest single donor to the Center for Responsible Lending. Paulson owns one of the world’s largest hedge funds, and most recently, the SEC has alleged “that Paulson & Co. paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.”
- Herb and Marion Sandler are the second largest donors to CRL, and together with Paulson appear to comprise the majority of the organization’s funding. The couple owned GoldenWest Financial/World Savings bank, before selling it for over $2 billion to Wachovia, which tanked shortly thereafter
- Eric Stein, who once worked for Fannie Mae (an institution currently exempt from regulation in the financial reform bill), was also the longtime leader of CRL and Sr. Vice President of CCSH. Today, Stein sits in Obama’s Treasury Department in charge of crafting the current financial reform legislation and the new Consumer Financial Protection Agency (CFPA).
Now, onto the lobbying.
A complaint that was filed with the House, Senate, and the IRS alleges that CRL, CCSH, and its vast network of non-profit and for-profit companies may have committed serious violations of the Lobbying Disclosure Act (LDA) and the Honest Leadership in Open Government Act (HLOGA). The complaint was filed in the Fall of 2009 by the Consumers Rights League.