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Eric Cantor’s Opponent Beat Him By Calling Out GOP Corruption

Eric Cantor’s Opponent Beat Him By Calling Out GOP Corruption

by Lee Fang, Republic Report

“All of the investment banks, up in New York and D.C., they should have gone to jail.”

That isn’t a quote from an Occupy Wall Street protester or Senator Elizabeth Warren. That’s a common campaign slogan repeated by Dave Brat, the Virginia college professor who scored one of the biggest political upsets in over a century by defeating Majority Leader Eric Cantor in the Republican primary last night.

The national media is buzzing about Brat’s victory, but for all of the wrong reasons.

Did the Tea Party swoop in and help Brat, as many in the Democratic Party are suggesting? Actually, The Wall Street Journal reports no major Tea Party or anti-establishment GOP group spent funds to defeat Cantor. Did Cantor, the only Jewish Republican in Congress, lose because of his religion, as some have suggested? There’s no evidence so far of anti-Semitism during the campaign. Was Cantor caught flatfooted? Nope; Cantor’s campaign spent close to $1 million on the race and several outside advocacy groups, including the National Rifle Association, the National Realtors Association and the American Chemistry Council (a chemical industry lobbying association) came in and poured money into the district to defeat Brat. The New York Times claims that Brat focused his campaign primarily on immigration reform. Brat certainly made immigration a visible topic in his race, but Republic Report listened to several hours of Brat stump speeches and radio appearances, and that issue came up far less than what Brat called the main problem in government: corruption and cronyism.

Brat told Internet radio host Flint Engelman that the “number one plank” in his campaign is “free markets.” Brat went on to explain, “Eric Cantor and the Republican leadership do not know what a free market is at all, and the clearest evidence of that is the financial crisis … When I say free markets, I mean no favoritism to K Street lobbyists.” Banks like Goldman Sachs were not fined for their role in the financial crisis — rather, they were rewarded with bailouts, Brat has said.

Brat, who has identified with maverick GOP lawmakers like Representative Justin Amash of Michigan, spent much of the campaign slamming both parties for being in the pocket of “Wall Street crooks” and D.C. insiders. The folks who caused the financial crisis, Brat says, “went onto Obama’s Rolodex, the Republican leadership, Eric’s Rolodex.”

During several campaign appearances, Brat says what upset him the most about Cantor was his role in gutting the last attempt at congressional ethics reform. “If you want to find out the smoking gun in this campaign,” Brat told Engelman, “just go Google and type the STOCK Act and CNN and Eric Cantor.” (On Twitter, Brat has praised the conservative author Peter Schweizer, whose work on congressional corruption forced lawmakers into action on the STOCK Act.)

The STOCK Act, a bill to crack down on insider trading, was significantly watered down by Cantor in early 2012. The lawmaker took out provisions that would have forced Wall Street “political intelligence” firms to register as traditional lobbyists would, and removed a section of the bill to empower prosecutors to go after public officials who illegally trade on insider knowledge. And Brat may be right to charge that Cantor’s moves on the STOCK Act were motivated by self interest. Cantor played a leading role in blocking legislation to fix the foreclosure crisis while his wife and his stock portfolio were deeply invested in mortgage banks.

Most self-described Tea Party Republicans, including Rand Paul and Ted Cruz, have railed against Washington in a general sense without calling out the powerful – often Republican-leaning — groups that wield the most power.

Not Brat.

“Eric is running on Chamber of Commerce and Business Roundtable principles,” Brat told a town hall audience, later clarifying that he meant the U.S. Chamber of Commerce, the largest lobbying trade group in the country. He also called out the American Chemistry Council for funding ads in his race with Cantor, telling a radio host that his opponent had asked his “crony capitalist friends to run more ads.” Brat repeats his mantra: “I’m not against business. I’m against big business in bed with big government.”

Indeed, Cantor has been a close ally to top lobbyists and the financial industry. “Many lobbyists on K Street whose clients include major financial institutions consider Cantor a go-to member in leadership on policy debates, including overhauling the mortgage finance market, extending the government backstop for terrorism insurance, how Wall Street should be taxed and flood insurance,” noted Politico following Cantor’s loss. In 2011, Cantor was caught on video promising a group of commodity speculators that he would roll back regulations on their industry.

There are many lessons to be learned from the Cantor-Brat race. For one, it’s worth reflecting on the fact that not only did Cantor easily outraise and outspend Brat by over $5 million to around $200,000 in campaign funds, but burned through a significant amount on lavish travel and entertainment instead of election advocacy. Federal Election Commission records show Cantor’s PAC spent at least $168,637 on steakhouses, $116,668 on luxury hotels (including a $17,903 charge to the Beverly Hills Hotel & Bungalows) and nearly a quarter-million on airfare (with about $140,000 in chartered flights) — just in the last year and a half!

But on the policy issues and political ramifications of this race, it’s not easy to box Brat into a neat caricature of an anti-immigration zealot or Tea Party demagogue, or, in Time’s hasty reporting, a “shopworn conservative boilerplate.” If Brat ascends to Congress, which is quite likely given the Republican-leaning district that he’ll run in as the GOP nominee, he may actually continue taking on powerful elites in Washington.

This article originally appeared on Republic Report.

AFP Photo/Jay Paul

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Last Remaining Populist House Republican Faces K Street’s Own Wolf Of Wall Street

Last Remaining Populist House Republican Faces K Street’s Own Wolf Of Wall Street

by Lee Fang, Republic Report

Congressman Walter Jones, a Republican who represents a wide swath of eastern North Carolina, might not strike you as a populist. But as a lawmaker, the veteran politician with a slow Southern drawl has become a gadfly in his own party for thumbing his nose at powerful political interests. He is the only GOP co-sponsor of the DISCLOSE Act, a measure to reveal the donors of dark money campaign advertisements. He is among the loudest critics of the wars in Iraq and Afghanistan, telling an audience once that “Lyndon Johnson’s probably rotting in hell right now because of the Vietnam War, and he probably needs to move over for Dick Cheney.” And Speaker John Boehner removed Jones from the House Financial Services Committee, which oversees Wall Street. His sin? Bucking leadership and supporting many bills to further regulate the financial sector, along with serving as the last remaining House Republican to have voted for the Dodd-Frank reform package.

The Republican establishment has attempted to remove Jones from office by dispatching a number of primary challengers over the years. For this cycle, a former Bush administration aide named Taylor Griffin is the party favorite to finally wipe out Jones.

Several outlets, such as Bloomberg News, have reported that Griffin’s candidacy is being heavily promoted by the financial industry. JP Morgan Chase, Bank of America, Wells Fargo and other banks helped fuel the $114,000 fundraising haul Griffin reported in his first campaign disclosure report. Earlier this week, a SuperPAC financed in part by hedge fund titan Paul Singer went on air with a negative ad against Jones.

What hasn’t been reported, however, is that Griffin himself is a longtime political consultant for the biggest predators of Wall Street.

Republic Report has obtained a disclosure report that shows that Griffin’s client list reads like a who’s who of financial interests that have preyed upon North Carolina families for short term gain.

Griffin, whose career includes a stint on the the Bush election campaign team and Treasury Department, is a co-founder of Hamilton Place Strategies, a “policy and public affairs” firm that boasts of its team of former government officials. Like many companies that work to influence policy within the Beltway on behalf of corporate interests, Hamilton Place Strategies does not register under the Lobbying Disclosure Act, though it advertises its ability to shape the regulatory environment. The company, which specializes in public relations, is located a stone’s throw from K Street and the White House in a corridor of Washington favored by many influence peddlers.

Griffin touts himself as a conservative small businessman. His campaign website “About” section only makes a passing reference to his prior position with Hamilton Place Strategies, noting obliquely that he founded a “leading public policy consulting firm, quickly growing it to a business that included over 20 employees on its payroll.” Before launching his campaign in October, Griffin sold his share of the firm and moved to New Bern, a city within North Carolina’s third congressional district.

Griffin’s client list has never before been reported. But a mandatory candidate filing, disclosed by the House Clerk last week, opens a window into his business operation.

Griffin worked for Lender Processing Services Inc. (LPS), the infamous company that forged foreclosure documents on behalf of the big banks. In a practice that became known as “robo-signing,” LPS created over “1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.” Citigroup, Bank of America, Wells Fargo, JPMorgan Chase and Ally Financial allegedly used robo-signing to engage in unlawful foreclosures. The robo-signing tactics were reportedly used extensively in North Carolina.

Though Griffin revealed his LPS work on his disclosure form, he also refused to list other clients, noting that “certain confidential clients are not reported due to terms of agreement into at the time services were retained.” But public statements from his company, including from Tony Fratto, another co-founder of Hamilton Place Strategies, shows the firm has been working for Magnetar Capital, a hedge fund famous for helping inflate the housing bubble that led to the 2008 financial crisis.

In a Pulitzer Prize-winning article for ProPublica, reporter Jesse Eisinger revealed that Magnetar helped create “arcane mortgage-based instruments, pushed for risky things to go inside them and then bet against the investments,” a scheme that earned them hundreds of millions of dollars. Now, according to reports, Magnetar is back in the housing business, taking advantage of low prices to buy up homes and rent them out.

As part of their strategy to dupe investors, Magnetar allegedly enlisted the rating agency Standard & Poor’s to provide a high-level A-grade listing for Magnetar’s synthetic financial products. Though it’s not clear what he did for the firm, Griffin lists McGraw-Hill Financial, the parent company of Standard & Poor’s, as one of his clients (the firm has been accused of engaging in other fraudulent rating schemes that led to the financial collapse).

Another Griffin client, according to his ethics form, is an interest group that is actively lobbying to hike property insurance rates on North Carolina families, including those in the Outer Bankers region Griffin hopes to represent.

Griffin works for the Property Casualty Insurers Association of America, a trade association for property insurers. This year, the PCIAA promoted a state property insurance hike as high as 35 percent on homeowners in North Carolina beach communities. In Washington, the PCIAA’s team of 10 registered lobbyists worked to oppose the Homeowner Flood Insurance Affordability Act, recently passed legislation designed to “freeze premium increases on most homes governed by flood-insurance rate maps.”

As the Charlotte Observer reported, without this legislation, some coastal families faced flood insurance rate hikes from $850 a year now to as high as $21,000.

Griffin’s campaign did not respond to Republic Report’s request for comment about his personal finances. The forms, however, have other revelations.

Griffin has told reporters that he sold his shares in Hamilton Place Strategies, suggesting that he is no longer affiliated with the firm or in public policy consulting. However, the disclosure reports show that he has continued to earn a living from Hamilton Place Strategies — at least in excess of $5,000 — and this year earned income (likely through his other consulting firm, Sulgrave Partners) from PCIAA, McGraw-Hill Financial, Huron Healthcare, Motorola Mobility, and other clients.

In his first television advertisement that began airing this month before the May 5 primary, Griffin says that he is the “clear conservative choice for Congress.” In a spot that is clearly biographical in natural, Griffin references his consulting work for the financial sector interests thusly: “I’ve also owned my own business, so I know what it means to make a budget and stick to it.” Left unsaid, the $406,000 a year he earned promoting the very worst of Wall Street.

This article originally appeared on Republic Report.

Photo: Gage Skidmore via Flickr