Brown Caught Trying to Weaken Dodd-Frank After it was Passed

johnk   |   Mon, Jun 4, 2012 11:33 AM EST
Brown is Wall Street's buddy. His efforts to close Fenway Park are completely in character with these pro-NY machinations. - promoted by Bob_Neer

The Globe is reporting that they have uncovered e-mails from Scott Brown and his campaign after the passing of Wall Street reform (Dodd-Frank) to further weaken the legislation. It seems that Brown was not satisfied in his role in watering down the legislation, Brown pushed for a loose interpretation of the law, allowing banks to more easily gamble taxpayer backed funds for high-risk investments.

…e-mails obtained by the Globe show that Brown’s work on behalf of the financial sector did not stop when the law was passed. In the second stage, as regulators began the less publicly scrutinized task of writing rules amid heavy pressure from the banking sector, Brown urged the regulators to interpret the 3 percent rule broadly and to offer banks some leeway to invest in hedge funds and private equity funds.

First was a memo in March 2011 from Brown’s legislative director Nat Hoopes which was sent to the Treasury Department, which was coordinating the five agencies writing the rules. A second email was from Scott Brown himself in June 2011 directly to Treasury Secretary Timothy Geithner echoing the earlier memo trying to futher water down rules.

The memo’s impact summarized by former FDIC lawyer Anne Graham:

Ann Graham, a lawyer formerly with the Federal Deposit Insurance Corp. and an advocate of strict regulation who teaches banking law at Hamline University in Minnesota, said Hoopes’s memo urges regulators to “substantially undercut the Volcker rule’’ in ways that would allow banks to skirt the 3 percent limit on hedge fund ownership and delve into riskier investments.

Hmmm, seems like JPMorgan Chase and Scott Brown have more things in common than we realized.

Oh, by the way, Brown’s office declined to make the senator available for an interview on the Globe story.
(Shocked expression on face.)

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14 Comments . Leave a comment below.

  1. I saw this on DKOs this morning
    (0+ / 0-) View voters

    Yet another reason for voters to dislike Scott Brown! Between his voting record and actions like this, he’s clearly very bad for Massachusetts – now we need to get this info to the low-info voters. Canvass, people – it’s time to canvass…

    johnt001   @   Mon 4 Jun 4:06 PM

    • Plus, the FOIA request
      (0+ / 0-) View voters

      is still pending. If Scott was trying to water down legislation last year, what was he doing at the beginning of 2012 when JPMorgan Chase was lobbing hard to water down the bill?

      We know Brown got an influx of cash during that time. We’ll see what he did for it.

      johnk   @   Mon 4 Jun 4:52 PM

  2. He was right on Fenway Park
    (0+ / 0-) View voters

    The seats suck, some of them don’t even point in the right direction, and its small size all but guarantee it will always have the highest ticket prices in the league. A new park would have been a blessing!

    shugbear   @   Mon 4 Jun 4:22 PM

  3. "Uncovered"? These weren't secrets
    (0+ / 0-) View voters

    These memos show that the Senator was actually involved and doing work to be sure the rules are interpreted in ways that don’t disrupt the markets or create costly side-effects, but still accomplish the spirit and intention of Dodd-Frank. Yes, he’s looking out for the interests of the banking industry, but that’s a good thing, in Boston especially, because we have a considerable banking industry and poorly crafted rules could really screw it up, kind of like how HIPAA’s confusing rules and difficult requirements had a dampening effect on the economy and drove up health care costs more than expected. If you read the article, the “loose interpretation” seems reasonable and it’s good someone is presenting those recommendations. I bet lots of them will be agreed to.

    dont-get-cute   @   Mon 4 Jun 4:56 PM

  4. Not shocking. But will Brown putting Wall Street before Main Street impact him politically?
    (0+ / 0-) View voters

    From the recent Boston Globe poll:

    Only 19 percent of voters said they were very familiar with stories about Brown’s fund-raising from Wall Street interests, with 37 percent saying they were somewhat familiar.

    And among those who were at least somewhat familiar, 66 percent said it would not affect their vote.

    From the recent Suffolk Univ. poll:

    When likely voters were asked if a vote for Scott Brown is a vote for Wall Street, 55 percent disagreed and 33 percent agreed.

    Perhaps the volume just needs to be turned up so that Massachusetts residents are more aware of how closely Republican Scott Brown is tied to Wall Street and how willing Brown is to allow Wall Street & big banks to gamble away our economic stability. So spread the word:

    progressmass   @   Mon 4 Jun 5:08 PM

  5. Who will save the bankers?
    (0+ / 0-) View voters

    who

    whosmindingdemint   @   Mon 4 Jun 5:09 PM

  6. Dodd-Frank might have been
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    better with Democrats who weren’t afraid to take on the banks, but the razor thin margin in the Senate gave Scott Brown the power to water down the legislation. As Matt Taibbi writes,

    But the best example of how the watering-down process helped make Dodd-Frank ripe for a later killing was the question of Too Big to Fail. Obama, Geithner and the Democratic leadership in Congress never seriously entertained enacting the most obvious and necessary reform at all – breaking up the so-called “systemically important financial institutions” (the congressional term for “banks so huge we’ll have to bail them out if they collapse”). Rather than simply stopping these firms from getting so big that they’d blow up the universe in a collapse, the Democrats opted for a half-clever semantic trick, claiming they had solved the future bailout question with Title II of the Dodd-Frank Act, known as the “Orderly Liquidation Authority” or “OLA” section of the bill.

    In a nod to FDR, Title II would have forced major financial companies to pay $19 billion into an FDIC-style fund that would cover the cost of any future bailouts. But then the balance of power in the Senate was upset by the election of Republican Scott Brown to Ted Kennedy’s seat in Massachusetts. As the clock wound down toward the bill’s passage, Brown insisted on a change: Instead of making ginormous companies pay $19 billion in advance, the FDIC would first use taxpayer money to pay for any bailouts, and then spend years trying to recover that money from Wall Street by means of an assessment process so convoluted that you could grow a four-foot beard in the time it would take to understand it. Republicans managed to wrangle support, in conference, for the “bailout now, pay later” idea, and it made its way into the final bill.

    Wall Street will be Brown’s Wounded Knee.

    mark-bail   @   Mon 4 Jun 5:38 PM

    • Nope...instead
      (0+ / 0-) View voters

      “Rather than simply stopping these firms from getting so big that they’d blow up the universe in a collapse”

      Nope, instead Bush let them get bigger with mergers and acquisitions on the taxpayer TARP funds. But the banker-friendly Dems (including Obama) didn’t halt that practice, either…

      lynne   @   Mon 4 Jun 6:49 PM

      • Geithner and company
        (0+ / 0-) View voters

        actually pretty much forced BoA to eat up another, sicker bank during the TARP days that is a big driver in all of BoA’s current (biggest) woes.

        Obama picked them, but I believe in a lot of ways the Geithners of the world poisoned the well a lot more than Obama probably realized they would have… I look forward to a day when a future Democratic President is looking for advice from the Krugmans of the world and not former Goldman Sachs guys.

        RyansTake   @   Mon 4 Jun 10:47 PM

    • Clinton signed on to
      (0+ / 0-) View voters

      Gramm-Leach. Democrats signed on to the savings and loan debacle.

      mark-bail   @   Tue 5 Jun 7:02 AM

  7. and it may take
    (0+ / 0-) View voters

    another financial collapse for that to happen

    whosmindingdemint   @   Mon 4 Jun 10:59 PM

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