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A regulator’s blind eye is dangerous to us all

Dave Lieber — Sun, 15 Jan 2012 20:38:25 +0000

UPDATE: In January 2012, federal prosecutors announced that Spencer Barasch, formerly chief enforcement officer in the Fort Worth, Texas office of the Securities and Exchange Commission, had agreed to pay $50,000 to settle charges that he violated federal conflict-of-interest standards by providing representation for financier R. Allen Stanford, the Associated Press reported.

Barasch is now a partner with the Dallas law firm, Andres Kurth LLP.

Malcolm Bales, the U.S. Attorney for the Eastern District of Texas, said the fine, the maximum amount allowed under law, shows that the government is serious about cracking down on former federal officials who attempt to us their influence in the private sector, the AP reported.

Bales said, “There should be zero tolerance for people who serve the public and then go into the private sector and use [that service] for personal benefit,” he said, according to the AP. Barasch’s lawyer, Paul Coggins, a former federal prosecutor, said his client settled witht he government “to avoid the expense and uncertainty of protracted litigation.”

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Now here’s the original Watchdog Nation report:

I nominate Spencer C. Barasch for an asterisk when the whole story of the Great Recession is told by historians in years to come.

Spencer "Mr. Asterisk" Barasch

He is the Steven Bartman of the financial regulatory world.

In a baseball playoff game at Wrigley Field in 2003, Bartman touched a foul ball and disrupted a potential catch by the Cubs’ outfielder. The Cubs lost the lead — and the game. They never made it to the World Series. So Bartman is the Mr. Asterisk of Cubs’ baseball.

Steve Bartman, the Spencer Barasch of the baseball world

The same can be said for Spencer Barasch, too. I’m sure you don’t know who he is. But it’s important that you know these Dirty Dozen Facts about Mr. Asterisk:

1. Barasch was the former head of the Securities and Exchange Commission’s enforcement office in my hometown of Fort Worth, Texas.

2. In 1997, auditors in that office thought that accused swindler R. Allen Stanford may have been conducting a Ponzi scheme.

3. SEC enforcement, led by Mr. Asterisk, closed that inquiry because, he said, the plan lacked U.S. investors. That decision was described by some insiders as unprecedented. But Mr. Asterisk later explained, according to the SEC Inspector General, that he called Stanford’s attorney to sound out the case against him, and Stanford’s attorney explained why there was no case.

4. In 2002, SEC examiners again referred Stanford to enforcement. Again, Mr. Asterisk’s department took no action.

5. In 2003, the SEC received more complaints about Stanford’s investment scheme but did not act.

6. In 2004, SEC examiners prepared another case against Stanford.

7. In 2005, Mr. Asterisk decided once again that examiners will take no action.

8. That same year, Mr. Asterisk leaves the government for the Dallas law firm, Andrews Kurth, where he works today as a defense attorney. SEC staffers finally refer the case to enforcement, where the next year, the SEC opens an official investigation.

9. After leaving the government, Mr. Asterisk asked the SEC’s ethics branch for permission to represent Stanford. In his e-mail seeking permission, Mr. Asterisk wrote: “Every lawyer in Texas and beyond is going to get rich over this case. Okay? And I hated being on the sidelines.” His request was denied.

10. Even though he was denied, Mr. Asterisk did a small amount of work for Stanford in October, 2006, in apparent violation of SEC rules. The SEC has referred this to the State Bar of Texas.

11. In 2009, the SEC sued Stanford and criminal charges, still pending, were also filed. Victims claim losses around $7 billion. Stanford, who remains in jail, maintains his innocence.

12. On March 31, 2010, the SEC Inspector General released a report that targets Mr. Asterisk for the blame in lack of earlier prosecution. Read the full Inspector General report here.

Do you see why this lawyer should be included in any telling of the Great Recession?

A regulator who thwarts justice because he has other goals in mind — including earning tons of money — is a dream come true for Wall Street and a nightmare for the rest of us.

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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Assistant city manager in patronage flap resigns

Dave Lieber — Sun, 16 Oct 2011 16:11:12 +0000

An assistant city manager at Fort Worth City Hall resigned in October 2011 after Fort Worth Star-Telegram Watchdog columnist Dave Lieber revealed that she had helped orchestrate secret pay raises for a select few employees and top managers.

Her boss, the interim city manager, didn’t even know about most of them.

At the time, most city employees had gone three years without a raise.

Karen Montgomery had served with the city since August 2006.

Former assistant city manager Karen Montgomery

City officials declined to say whether the raises or any other issue led to her resignation, according to the Star-Telegram.

Read about Montgomery’s role here at Watchdog Nation. (Note these stories originally appeared in the Dave Lieber Watchdog column in the Star-Telegram.

Part I: A City Hall human resources director faces a lonely battle against patronage

Part II: When 100 City Hall workers out of 4,500 get raises, that’s patronage at its finest

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Rick Perry’s plane trips: An example of Sarah Palin’s crony capitalism?

Dave Lieber — Mon, 12 Sep 2011 16:49:17 +0000

Update: On Jan. 3, 2012, the Securities and Exchange filed suit against Life Partners accusing it and top three executives of defrauding shareholders by overvaluing the life insurance policies it buys from its customers, AP reported.

The SEC also accused Life Partners president Brian Pardo of insider trading. Pardo and the company quickly denied the charges.

Original story follows:

Commission Sarah Palin blasted “corporate crony capitalism” in an Iowa September 2011 speech to supporters. Many interpreted this as an attack on Gov. Rick Perry’s pay-to-play political machine.

Maybe this is an example of the type of thing Palin is talking about:

As first reported in the Wall Street Journal and then Dave Lieber’s Watchdog column in the Fort Worth Star-Telegram, when Texas Gov. Rick Perry and his family flew to South Carolina in August 2011 to announce his presidential run, he rode on a private jet owned by a contributor facing major troubles from federal and state regulators.

Brian Pardo, chief executive of Life Partners Holdings of Waco, gave $50,000 in 2010 to Texans for Rick Perry, records show. He’s a pioneer in the life-settlement investment industry, where investors buy death bonds. They pay for portions of strangers’ life insurance policies, pay the premiums and collect after a person dies. If the people exceed life-expectancy estimates, the investments go bad.

At the federal level, the Securities and Exchange Commission notified Life Partners this year that it intends to file an enforcement action related to accounting and disclosure practices.

At the state level, the Texas State Securities Board, part of the executive branch, has investigated Life Partners for more than a year. Recently, the board — working with the Texas attorney general’s office — filed a court petition seeking to force the company to honor its state-issued subpoenas for company records. In court papers, the board says the company engaged in fraudulent business practices.

Life Partners refuses to give information to state securities regulators. Company lawyers say the financial products are not securities and shouldn’t be regulated as such.

AP PHOTO

No federal or state charges have been brought against the company, which has denied wrongdoing. But Life Partners also faces a slew of lawsuits from shareholders and disgruntled customers.

The governor’s rides in Pardo’s airplane — one to Iowa in addition to the South Carolina trip — were first reported on the front page of The Wall Street Journal.

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Life Partners didn’t respond to a request for an interview, but in an e-mail to the Journal, Pardo wrote, “I did not discuss the SEC investigation with the governor, to the best of my recollection.”

Perry spokesman Mark Miner told The Life Settlements Report website, “Mr. Pardo was not on the airplane with Governor Perry.” It wasn’t clear which of the two flights he was referring to.

Pardo told the newspaper that the Perry campaign paid for both trips, as required by federal election law.

Neither the governor’s office nor his campaign responded to a request for information from The Watchdog. The state securities board declined to comment, too.

Life Partners describes itself as a purchasing agent that matches people who can no longer afford or don’t want to continue paying their life insurance premiums — or people who bought policies to resell — with investors who buy fractional interests in the policies.

Life Partners’ estimates on when the original policyholders will die have been inaccurate, with many living longer than expected. The Life Settlements Report, an industry newsletter, said that for 262 deaths reported by the company, life expectancy was double the company’s estimates.

The company’s former life-expectancy estimator, a Reno, Nev., doctor, handled up to 200 individual medical reports a week. His job was to guess how long each person would live. By one estimate, he spent nine minutes per case compared with an industry standard of more than an hour reviewing a person’s health history.

Pardo is quoted in the WSJ as saying he supports Perry for president.

Is this the kind of matter that Sarah Palin is talking about?

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Dave Lieber, the author, is The Watchdog columnist at the Fort Worth Star-Telegram in Texas. His new book, Bad Dad, was just released and is getting dynamite reviews. It’s a true-story mystery thriller about what happens when the worst 10 minutes of your life go viral. The columnist is arrested by a police force he investigated. Learn more atwww.BadDadBook.com where you can read Chapter One. The hardcover and e-book are for sale at BadDadBook.com. Immediate shipment!

Disagreement over texting at movie theater leads to assault charge

Dave Lieber — Mon, 12 Sep 2011 14:37:06 +0000

This column about texting in movie theaters by Watchdog Nation founder Dave Lieber touched a nerve with many people when it first appeared in the Dave Lieber Watchdog column in the Fort Worth Star-Telegram. The story received more than 100,000 Internet hits and turned out to be the #1 most read story in 2011 on the newspaper’s website. You can decide for yourself how you feel about this unusual situation.

Meet Dale Fout and Brenda Godwin. One weekday in April, they both went to a movie theater in Grapevine. Sat a row apart. Didn’t know each other.

By coincidence, they were born in the same year, two days apart. Both are 54. Fout, a marketing consultant, describes himself as a 220-pound “pretty big guy. I’m broad. I’m not fat. Used to play football.” Godwin says she is a 136-pound skin care specialist. Here’s how they met in the theater.

Her side

“He had his phone out. The light was shining at me. I’m thinking, ‘He’s going to turn it off.’” But he didn’t. ‘OK, this is ridiculous.’ So I reached over and tapped him on the shoulder. It was very bright. I was only trying to get his attention. He whipped around and said, ‘Don’t ever touch me.’ I was a little taken aback. ‘I wouldn’t have touched you if you didn’t have your phone out.’

“He jumps up and whirls around towards me and says, ‘I am charging you with assault,’ and he flew out of the theater.”

His side

Dale Fout

“I got a text, and I responded to it because it was something important. It was something that was on a deadline situation, OK. I held it against my chest purposely where I could barely see it. … I could text but hide the majority of the light coming from the phone.

“She said something. I couldn’t make it out. That’s why I turned. She was probably saying something like, ‘Get off your phone.’ I turned, and she pushed. She just happened to push my neck at the time my neck was in an awkward position. Kinda like having a little fender bender, and you get a little whiplash in your neck, you know.”

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Police report

“Fout advised he had been assaulted and his neck was in pain,” officer Emily Hays wrote. Fout was treated for neck pain by Grapevine paramedics. “Fout said a female who was sitting behind him in Theater 8 grabbed him by the shoulder because he was texting during the movie,” Hays wrote. “Fout said he got up, walked out of the theater and asked management to call police.”

Godwin told police, Hays wrote, that “she tapped him on the shoulder with one finger to ask him to stop texting. Godwin advised the male then jumped out of his chair and ran outside of the theater.

“Fout stated he was offended by the contact and desires prosecution. Godwin was issued citation #P0039176 for assault by contact.”

Police comment

“We’re the middle person on this,” Lt. Todd Dearing says. “Assault by contact is usually not something like this. It’s usually a shove.” Because police didn’t witness the incident, a ticket was written. It’s a misdemeanor, the equivalent of a traffic ticket. “We stay neutral in these things. That’s what the courts are for.”

The legal side

The common thinking is that in Texas, unwanted touching can justify an assault charge. That’s true, but there are requirements.

The law says: “A person commits an offense if the person … intentionally or knowingly causes physical contact with another when the person knows or should reasonably believe that the other will regard the contact as offensive or provocative.”

Jeff Bellin, SMU assistant professor of law, says that a tap is not an assault but that a shove may be.

“It would be a jury question, but I think most people would agree that tapping someone on the shoulder, even if you don’t know them, is normal. We expect that kind of interaction in our everyday lives.”

A jury would have to decide which person to believe. Fout’s injury would be key. He says his neck hurts “a little bit. I’m seeing a chiropractor. It’s not like she knocked me to the floor. … The therapist said, ‘Yeah, she put a knot right there.’ A tap on the shoulder isn’t going to cause that.”

Godwin says, “If he hurt his neck, that’s probably because of the way he whipped around.”

Because Godwin lives in Richmond, Va., she said it would be too expensive to return and fight the charge. So she paid a $260 fine.

After this story appeared, Fout appeared on the local TV news to defend himself.

What should you do?

The incident occurred at Cinemark Tinseltown, whose policy is to give texters a chance to behave. If they don’t, they are removed and given a refund or a rain check.

“If they are texting, we ask them to return to the theater at a time when they are less busy and can enjoy the movie,” Cinemark spokesman James Meredith says.

Watchdog tip: Although Cinemark says it sends employees into each theater every 20-30 minutes to check behavior, why wait? Go outside and talk to a staffer about the problem. Let that person do the deed.

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Public officials’ use of social media sparks debate

Dave Lieber — Sun, 13 Jun 2010 21:32:39 +0000

You thought Facebook and Twitter were ways to tell the world what you had for breakfast? Or that cellphone texting means you can ask your spouse what’s for dinner?

Well, what about school board and City Council members who use those social media and communication tools to subvert the concept of open government?

The council member who text-messages another member during a meeting and asks, “How am I supposed to vote?”

The school board members who use Facebook’s private chat to decide which contractor should get hired for a multimillion-dollar job.

According to state law, officials are not supposed to deliberate or discuss public matters at any unannounced meeting held in private. And the public has a right to inspect or copy many government records, which can include e-mail and other electronic postings.

The Texas attorney general’s office is strict about that.

But the new communication tools have become “second nature” to everyone, including public officials in Texas, said William McKamie, a San Antonio lawyer who serves as city attorney for several municipalities. People feel more uninhibited about communicating when using them, he said.

That can lead to trouble.

It did lead to two debates Friday in Fort Worth at the annual meeting of the State Bar of Texas.

McKamie suggested that state lawmakers clarify rules about social media for public officials, and he bristled at the idea that elected officials should be so limited in discussing public business.

Sitting beside him on an open-government panel, Wanda Garner Cash, a University of Texas journalism professor, had a different view. The Texas Public Information Act, she said, should apply to all forms of communication. That includes, as an example, smartphones regardless of who owns or is paying for them, she said.

“I disagree with that,” McKamie said.

Cash cut him off: “Public communication is public communication.” Even if an official uses a personal cellphone to discuss public business, it’s still subject to the state law, she said.

But McKamie said public officials “don’t give up their First Amendment rights when they get elected to an office.”

“It has nothing to do with First Amendment rights,” Cash countered. “It has to do with conducting business — whether it’s done on your home phone or your office phone.”

The debate is no longer just theoretical.

Several Texas cities and public officials (including Arlington City Councilman Mel LeBlanc) have sued to remove the criminal penalties in the state’s Public Information Act. A trial is scheduled for fall in a Pecos federal courtroom.

As Rod Ponton, Alpine city attorney and a lead lawyer on the case with Houston attorney Dick DeGuerin, explained it at a second panel discussion Friday: “The First Amendment was written more than 200 years ago and, of course, we didn’t have Twitter. We didn’t have e-mail. We didn’t have electricity. But the idea was that political speech should be protected.”

Ponton said the state law has had a chilling effect on elected and appointed officials’ communication because they are afraid that they could go to jail for up to six months if caught breaking the law.

State Rep. Carol Kent, D-Dallas, also on the panel, said that during her five years as a Richardson school board member, the threat of a criminal conviction “certainly yanks your chain a little bit, and it gets your attention.”

“When you come into office and you take the oath, you know you’re going to face a higher level of scrutiny for the conversations that you have.

“You have to behave differently. You’re going to have to be more careful about the things you do, the things you say.”

Ponton called that unfair. “Public officials shouldn’t lose their rights to speak,” he said.

Hardly, according to panelist Keith Elkins, executive director of the Freedom of Information Foundation of Texas. He said his group could find only one example in 40 years where a Texas elected official was convicted and served jail time in such a case.

“I don’t think there is a real rush to the courthouse where overzealous prosecutors are trying to put elected officials in jail. … We hear pretty much hear the opposite.”

People contact a district attorney for help when they believe that their elected officials violated the open-meetings law with private deliberations, but prosecutors don’t want to take the case, he said.

What’s more, “if you only had one violation, something must be working.”

But Ponton said the use of social media may lead to more prosecutions. “Because if tweets go around, or e-mail or Facebook, the discussion of public matters is not posted,” he said. “Now you have an electronic trail which proves there has been political discussion among a quorum, and they could be indicted.”

Kent agreed that it was “chilling in a sense” but said that it was also “being ethically responsive to the notion that the public has a right to know what a school board is thinking about or discussing.”

While McKamie called for state lawmakers to rewrite rules, Cash said little needs to change. Whether you’re conducting public business “in an official meeting or on the hood of a pickup truck,” she said, it’s still the people’s business.

What do you think?

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Want to learn more and see the documents involved? Click on this WatchdogNation.com link to read an earlier post.

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Inadequate regulations hurt economic recovery

Dave Lieber — Sat, 05 Jun 2010 20:10:46 +0000

Have you ever heard of Ravi Batra? He’s a Southern Methodist University Professor of Economics.

Ravi Batra

I’ve never met the man, but I’m familiar with his work.

He was one of few U.S. economists who predicted the Great Recession. He also predicted the rise of Islam and the rise of a charismatic leader (Barack Obama).

Now when he gazes into his crystal ball, he sees more doom and gloom.

And his predictions make sense.

With all the billions of government dollars poured into the U.S. economy, the recovery is still as weak as a patient stuck in intensive care.

According to Gayle Reaves, the top editor at Fort Worth Weekly, Batra now worries about the lack of government regulation.

Reaves writes that, in the professor’s opinion, “the financial reforms being pushed through Congress aren’t enough, that the economic team brought on board by Obama represents just more of the same old stuff, and that too many of the big bankers and other architects of the last crisis are still in power.”

She continues, “Almost no one likes his ideas — except thousands of regular folks, business leaders, and admirers across a spectrum of professional disciplines, who may not agree with Batra on every point but who believe that his theories out to be included in the global debate now going on over how to fix the economy.”

I found Reaves’ profile of Batra very thought provoking and highly recommend that you spend a few minutes reading it. Find “The U.S. Economy: Still a House of Cards” right here.

The scariest part of the profile? Reaves writes, “Continuation of old policies and old ways of looking at the economy, he says, are going to lead America — and thus the world — to another crisis soon, probably later this year. If and when that happens, Batra says, there will be little capacity left for any more taxpayer bailouts — and with unemployment still at near-record levels, the pain for the country could be much worse even than last time.”

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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Goodfellas: Bernard Madoff and Mafia Boss Carmine Persico

Dave Lieber — Wed, 31 Mar 2010 22:06:46 +0000

In prison, Bernard Madoff is best buds with reputed Mafia Crime Boss Carmine Persico.

Does this bother you?

It bothers WatchdogNation.com. We can’t stop imagining the ramifications. Somebody says something terrible about Bernie, and Carmine makes a phone call.

Remember this scene from Goodfellas?

So how’s that working for you when the Greatest Thief in History has the Mafia tentacles at his beck and call? How’s that for “putting somebody away and throwing away the key?” Can’t these two dudes be separated?

Carmine Persico

This nugget of information was buried on the bottom of a well-reported story in the March 18, 2010 Wall Street Journal, “Madoff beaten in prison” by Dionne Searcey and Amir Efrati.

Duh.

When Bernie disappeared to the prison infirmary at the North Carolina medium security prison where he is serving a life sentence, everyone said he slipped and fell. Well, it ain’t so.

But buried near the bottom of the lengthy piece is the best part: Bernie is still giving financial advice in prison.

“He gave me ideas on my index funds,” a former inmate told the WSJ.

Quoting the WSJ:

“Mr. Madoff advised him to diversify, saying he should invest in funds that track the S&P 500 index of stocks ‘where my money would be in all the stocks instead of putting my eggs into one basket,’ the former inmate said.

“He said Mr. Madoff also warned him off of day trading. ‘I was trying to get into day trading and he’s like, ‘That’s not for you. That’s for individuals like me with millions to spare,’ ‘ he said.”

Then in the second to the last graph, buried, was this:

“Both inmates said Mr. Madoff also socialized with reputed Columbo crime-family boss Carmine Pesico, whose attorney couldn’t be reached.”

We called the U.S. Bureau of Prisons to discuss this, but as of this posting, no one has returned our call.

And so it brings to mind that legendary food preparation scene in Goodfellas. See it above from youtube.com.

Just change the names to Bernie and Carmine. And don’t put too many onions in the sauce.

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Will U.S. consumers get the protection we need?

Dave Lieber — Sun, 14 Feb 2010 18:03:30 +0000

President Barack Obama’s proposal to create a Consumer Financial Protection Agency came in with a bang. But it appears to be going out with a whimper.

Before the proposal was introduced in Congress last year, Treasury Secretary Tim Geithner said of the economic meltdown. “This crisis was caused, in part, by a lack of consumer protections.”

And?

Watchdog Nation checked in with several Washington, D.C., sources last week to learn what’s happening to the proposal in Congress.

The answer? Not much.

The bill passed the House but is stuck in the Senate.

“Opposition to financial reform is intense, coming in particular from big banks and other monied interests that seek to protect the status quo,” the Consumer Federation of America said in a recent statement.

The U.S. Chamber of Commerce says a new agency would hurt small-business owners that rely on credit cards, home-equity loans, auto-title loans and other sources of consumer lending to finance their businesses.

“The idea sounds great on its face, but we need to have a serious discussion about what the CFPA would actually do and what authority it would have,” Ryan McKee of the chamber told me. “The potential for unintended consequences is great.”

The CFPA would give federal regulators power to oversee mortgage companies, mortgage brokers, finance companies, payday lenders and other nonbank providers. Businesses would be blocked from offering financial products that charge prepayment penalties, unjustified fees and excessive interest rates.

Supporters say the agency would provide the public with better information about how to avoid so-called abusive lending and credit problems, and would improve disclosure to borrowers.

It would merge the enforcement divisions of several government agencies into the new agency.

The chamber says it worries that small businesses would lose access to credit, something they already struggle with because they are either too small or too new. The predicted result? Business closures, fewer startups, slower growth and the loss of jobs.

The chamber is also concerned that the proposal would ban products that are abusive but doesn’t clearly define abusive, said McKee, senior director for the chamber’s Center for Capital Markets Competitiveness.

Another sticking point for the chamber: The bill requires “too much disclosure” to consumers.

“Having too much disclosure is like having no disclosure at all,” McKee said, adding: “We need to simplify the disclosures so people get straightforward information.”

The chamber’s solution: Close gaps in existing laws that kept regulators from finding major problems; increase authority for regulators to enforce existing rules; and make sure regulators from various agencies communicate better.

The proposal for a CFPA was first floated in 2007, a year before the meltdown, by Harvard Law School professor Elizabeth Warren. She noted that federal regulators won’t allow a toaster that could burst into flames to hit the market. But mortgages and other “dangerous financial products,” she wrote, are not similarly regulated.

Elizabeth Warren

With questionable loans, she wrote, families can suffer from “wiped-out savings, lost homes, higher costs for car insurance, denial of jobs, troubled marriages, bleak retirements and broken lives.”

Warren is considered a strong candidate to head the agency — if it ever comes into existence.

Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, is carrying the ball for the CFPA. But he’s running into a strong defense put up by Sen. Richard Shelby of Alabama, the top Republican on that panel. Shelby has called the proposal “a folly and dangerous.”

It all comes down to whether Dodd and Shelby can agree on a compromise.

“We have reached an impasse,” Dodd said this month. “While I still hope that we will ultimately have a consensus package, it is time to move the process forward.” Dodd says he hopes to release a new proposal this month.

Sen. Richard Durbin, D-Ill., explained last year why he believes it’s tough to get a proposal through: “The banks — hard to believe, in a time when we’re facing a banking crisis, that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

Susan K. Weinstock, director of financial reform for the Consumer Federation, said she views that as the major hurdle.

“How much are senators hearing from individual consumers about this? How much do consumers know about this?”

What do you think? I’m most interested in your comments on this.

Better yet, contact your congressional representatives and let them know what you think. If you don’t know who they are, visit www.votesmart.org and type in your zip code — and you’ll quickly find out.

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Do you want to learn more?

House Resolution 4173, known as the Wall Street Reform and Consumer Protection Act, is now in the Senate.

It merges regulatory powers of the Federal Reserve, Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the Office of Comptroller of the Currency, the Federal Trade Commission and the National Credit Union Administration.

Here is where you can read more about the actual bill.

Here is where you can watch videos and read more to learn about the U.S. Chamber of Commerce’s opposition.

Here is where you can learn about the Consumer Federation of America’s support.

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The story of Warren McGraw is a warning to all

Dave Lieber — Sat, 13 Feb 2010 05:18:03 +0000

Have you ever heard of Warren McGraw?

Probably not.

I first met him in the early 1980s when I covered him as a Statehouse reporter in West Virginia. He served as the state Senate President. He was a passionate liberal firebrand who earnestly believed in the good of working men and women.

Later, he was elected to the West Virginia Supreme Court.

But then something awful happened to him when he ran for reelection in 2004.

Don Blankenship, owner of Massey Energy, one of the largest coal companies in the world, spent an estimated $3.5 million on behalf of McGraw’s Republican opponent, Brent Benjamin.

He paid for a TV ad that criticized McGraw of voting to “free an incarcerated child rapist, and of allowing that rapist to work in a public school.”

McGraw said later, “They say our court set a child molester loose in our schools. It’s absolutely untrue. I’m embarrassed to go out in public. They’ve absolutely destroyed me.”

McGraw did not write the opinion in the case. But he was part of the majority that sent the case involving the molester back down to a lower court for further action. Yes, it was probably a mistake. But everyone in public life makes a mistake of some type. That’s part of public life. McGraw’s career in West Virginia spanned decades.

At the time of the election, everyone knew that Blankenship’s company was likely to be involved in cases before the Supreme Court during Benjamin’s subsequent 12-year term, including one supposed $77 million case.

Indeed, just three years later, Benjamin cast a crucial vote overturning a $50 million verdict — despite requests that he recuse himself because of a the obvious conflict of interest.

The loser in that case took his appeal all the way to the U.S. Supreme Court, which eventually ruled in a very important decision in 2009 “that elected judges must step aside from cases when large campaign contributions from interested parties create the appearance of bias.”

That decision found that excessive campaign contributions pose “an unconstitutional threat to a fair trial.”

So far so good.

But here’s what’s most disturbing.

The U.S. Supreme Court also ruled recently that limits on campaign contributions by corporations denied these same corporations their right to free speech.

So please, someone, anyone, correct me if I’m wrong, but here’s what I believe.

The Supreme Court ruling will open the floodgates to any corporation doing just what Don Blankenship did: paying for ads that distort the record of any candidate or incumbent whose intentions are the opposite of corporate executives.

In a half century of life on this planet, I have never seen a threat to our democracy as this.

Right now, we have a two senators from each state. But in just a few years, our senators will represent car companies, banks, coal companies, health insurance companies, etc.

Tell me if I’m wrong.

But I really do believe that because of the Supreme Court decision, our democracy is doomed.

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