And Now, For Some Greed On the Other Side of the Blame Fence

As I’ve been saying, the Greed involved in this wall street mess is not just the blame of one sector. We are looking at three prongs of blame here. Congress. Wall Street. Fannie/Freddie and Forced Loans To People Who couldn’t Afford a Home.

Here’s a talel of Wachovia as told by American Thinker entitled How Allies of George Soros Helped Bring Down Wachovia Bank.

Interesting title, hey?  Especially considering I hope to God that the FBI is following George Soros around right now 24/7.

Now I am not usually given to block quoting and posting an entire piece, but these are interesting times time is also of the essence, and I just don’t want to take the chance that you won’t read the whole thing. I somehow think the author will understand this, considering the importance of this article to the American public with respect to the currently sunken Wachovia Bank.

Let me know if you smell any Socialism or Marxism here ok? And Oops! Look! There’s George Soros’ name again! And more than a few other names and organizations you will now recognize too! Take your time, but whatever you do, read it all:

How Allies Of George Soros Helped Bring Down Wachovia Bank

Wachovia Bank, a major institution, has seen its stock plummet and its continued viability called into question, as the nation’s financial crisis muddles forward. [Update: shortly after publication of this article, Citigroup agreed to purchase Wachovia's banking operations in a deal facilitated by the FDIC.] 

Largely ignored in this crisis is the key role played by Herbert and Marion Sandler, founders of Golden West Financial (GDW), one of the largest savings and loans in the nation. Wachovia purchased GDW for $24 billion dollars in 2006. This was one of the worst merger and acquisition deals of all time for the buyer, and remarkably excellent timing on the part of the seller. In essence, Wachovia bought a financial time bomb ticking away, one that exploded this year, bringing down yet another former financial titan and further wrecking Wall Street. [Update: see this commentary from Bllomberg on the role of GDW in the fall of Wachovia.]

How did this transpire and who are the Sandlers?

Herbert and Marion Sandler, a New York lawyer and Wall Street analyst respectively, bought a small California thrift in 1963 and built it into GDW — one of the largest thrifts in the nation. The company’s business was built on adjustable rate mortgages (ARMs. These were mortgages offered at low “teaser” rates that ratcheted upward as interest rates increased. They were often sold aggressively to unsophisticated home buyers who did not comprehend the vast financial risks they were taking, or who assumed that housing prices would rise high enough to provide a profit to them when they sold their houses. They were targets for lenders peddling mortgages that should have been stamped with a skull and crossbones, for these were among the most seductive and dangerous types of mortgage.

This book of business is the core reason for Wachovia’s current difficulties

The Sandlers knew their business far better than any other person could. Not only were they the founders and major owners, they famously ran the company as a husband and wife team for all these years.

So why did they happen to cash out at precisely the right time? Did they see the handwriting on the wall, realizing the massive risks inherent in the mortgages they originated throughout one of the most overheated real estate markets in the nation’s history? They are not talking, but when smart people cash in some of their chips, it’s rarely a good time to bet against them. Nevertheless, Wachovia bet 24 billion dollars and lost big time.

The collapse was primarily caused by the GDW purchase, which became an albatross around Wachovia’s neck soon after the purchase. “Wachovia found itself in ARM’s Way” was the headline of a recent Wall Street Journal article. A huge percentage of these Wachovia ARMs were made to deep subprime borrowers with very poor credit scores. Most of these were “inherited from its ill-timed acquisition of Golden West” at the end of the housing boom in 2006. 

The Sandlers have started to invest their billions of dollars politically, in the manner of George Soros, sugar daddy of many far-left wing groups and an early and prominent supporter of Presidential candidate Barack Obama. Soros has developed an empire of so-called 527 groups, putatively independent political activists groups that have influence within the Democratic Party. These 527 groups include the Center for American Progress, MoveOn.Org, Human Rights Watch, Media Matters and a slew of other like-minded groups .

This set of political organizations also includes the International Crisis Group, whose foreign policy staff is likely to contain the embryonic future of the State Department in an Obama Administration . Eli Pariser, who heads MoveOn.Org, boasts about his group’s role in the Democratic Party:

“Now it’s our party: we bought it, we own it, and we are going to take it back.”

They have already done so, in large measure.

The top four donors to these 527 groups in the last Presidential election cycle (2004) were Soros, Peter Lewis of Progressive Insurance, Steven Bing, and Herbert and Marion Sandler . Collectively they gave 78 million dollars to left-leaning 527 groups. That was just in 2004. They have become much more ambitious over the last few years.

Soros, Lewis, and the Sandlers form a core group of billionaire activists and Democrat partisans who have formed a group called The Democracy Alliance. They realized that they could magnify their power by working in unison and tapping other wealthy donors to further their agenda (the superb Boston Globe article “Follow the money” is a good primer on how money and 527 groups have come together to have a huge impact on politics in America).

The Democracy Alliance is a major avenue to help them achieve their goals. The roster of its growing membership consists of a list of billionaires and mere multi-millionaires who collectively hope to give upwards of 500 million dollars each year to further promote a left-wing agenda.   A partial roster of the Democracy Alliance  membership can be found here.

Half a billion dollars a year can purchase a great deal of influence.

The Sandlers certainly know quite a bit about leverage from their savings and loan days.

Among the beneficiaries of their largesse: Air America, ACORN (a group that has very close and long lasting ties to Barack Obama and has a long history of engaging in voter fraud. Citizens for Responsibility and Ethics in Washington (basically a private detective group focused on the private faults and foibles of Republicans), Media Matters, a media watchdog group that engages in harsh partisan attacks against media figures and articles it considers supportive of Republicans). The list goes on and on.

They are not merely out to elect Democrats, but to also permanently realign U.S. politics and shift our society and culture in a far-left wing direction.

One of the steps the Sandlers have taken on their own is to start ProPublica with a 10 million dollar donation, a sum which they promise to replenish annually. This is an outfit that will engage in investigative journalism and will provide its “findings” to larger media outlets for greater impact at no cost. American Thinker was among the first outlets to express wariness over ProPublica and the approach it would take given the ideology of its founding couple. Even Jane Mayer of the New Yorker described the Sandlers as hard-core partisans. Other publications shared our concern about ProPublica. Investor’s Business Daily commented in an editorial:

 Could a couple of left-wing billionaires really be sincere about creating a “nonpartisan,” “non-ideological” center for investigative reporting? Or is the pair just paying more to drive the media agenda further left?

One problem: The Sandlers fund both leftist causes and the Democratic Party. In fact, they rank in the top tier of donors. In 2004 they gave MoveOn.org $2.5 million, or as much money as their philanthropic ally, George Soros.

Along with Soros and billionaire Peter Lewis, the Sandlers fund some of the most important players of what is now known as the “progressive” left. In 2003, the three together funded about a third of the Center for American Progress think tank, which has close staff ties to Hillary Clinton.

Now if this enterprise were called a “progressive” nonprofit, as other projects are, it wouldn’t be news. But given the chairmanship of Herbert Sandler, and Steiger’s claim that ProPublica will be run according to the “strictest standards of journalistic impartiality and fairness,” there’s reason to wonder if this isn’t a new bid to drive the political agenda leftward under media disguise.

“We will look hard at the critical functions of business and government, the two biggest centers of power, in areas ranging from product safety to securities fraud, from flaws in our system of criminal justice to practices that undermine fair elections,” its Web site says.

I would be very surprised indeed if the malfeasance of ACORN will ever be investigated by Publica, for its undermining of fair elections.

Unsurprisingly, though, ProPublica has already shown that agenda-driven journalism is its founding principle. One of its first pieces of “investigative journalism” was an attack on the oil and gas industry for developing the Marcellus Shale (a vast natural gas reservoir located in northeast America). ProPublica reported that developing this domestic energy source would damage the environment and advocated that these resources not be developed.

The New York Sun took ProPublica to task for the accuracy of its reporting and for the foolishness of its conclusion:

 

Geology.com reports on a study earlier this year by a geology professor at the State University of New York at Fredonia, Gary Lash, who found that the Marcellus Shale may contain more than 500 trillion cubic feet of natural gas.

If 10% of that is recoverable, it could supply America’s natural gas needs for two years and would have a “wellhead value” of $1 trillion, according to Geology.com. In other words, by the time the story is over, upstate New York will end up looking not like Appalachia but like Dallas or Dubai.

The national security consequences would also be considerable. Every unit of energy that comes from upstate New York is a unit that doesn’t have to come from Iran or Venezuela or Saudi Arabia or some other nation hostile to America and known for spawning or supporting terrorists.

As for the environmental risks, they are surmountable. As we noted in our July 25 editorial, “The Barnett Shale,” that natural gas field has been mined without any ill effects on the metropolitan area of Dallas Fort-Worth, which sits atop it. Not only have there been no ill effects, there have been remarkable benefits in terms of prosperity, growth, and increased tax revenues.

Maybe the Sandlers are helping their political ally George Soros, a hedge fund manager who runs an offshore fund whose investors may well include some of the world’s wealthiest and most anti-American petrocats. Shielded from scrutiny by offshore operations, the names of Soros’s investors are a closely-guarded secret. But perhaps more than a few of them would look askance at expedited development of our own energy resources. We would be less dependent on petrodollar rich abroad, and the price of oil and gas would weaken, should domestic energy resources like the Marcellus Shale be developed.

While the Sandlers personally made 2.4 billion dollars on the 24 billion dollar sale of Golden West Financial to Wachovia,  the employees (including their own former employees) and shareholders of Wachovia, including those who have invested their retirement money and children’s college funds in Wachovia stock and bonds, are not doing nearly so well. Communities where Wachovia has branches that may be closed as a cost-saving measure will also suffer. But worst hurt of all will be the homeowners who were sold mortgages that they should have never been offered, by a lender far more sophisticated than they were.

And here I thought that Democrat partisans were supposed to protect the little people.

So far as I know, the Sandlers have not offered to reinvest any of their gains into Wachovia to help it recover. It appears to be far more fun taking those ill-begotten billions and use them to fund an ever-expanding “left-wing conspiracy.”

Keep an eye on the Sandlers if Barack Obama becomes President. As I wrote, they know about leverage.

 

Ed Lasky is news editor of American Thinker.