Executive Branch Corruption?

The Market Ticker ^ | 6/20/09 | Karl Denninger

[FromLori]

Corruption is a strong word, but it appears warranted given the two stories of import this weekend. First, on the firing of inspectors general:

WASHINGTON - -- He was appointed with fanfare as the public watchdog over the government's multi-billion dollar bailout of the nation's financial system. But now Neil Barofsky is embroiled in a dispute with the Obama administration that delayed one recent inquiry and sparked questions about his ability to freely investigate.

Treasury, you see, is refusing to turn over documents - items that Barofsky believes he needs to do his job properly.

Mr. Barofsky's job is, for those of you who need a refresher, to investigate potential fraud and abuse in the TARP program. One would think that Treasury would be very interested in the integrity of that program, and submit without quarrel to any inquiry by the OIG's office, which was incidentally set up for the specific purpose of "watchdogging" the program itself.

It appears not.

Then there are two other IG firings:

The first dismissal occurred last week, when the White House terminated Gerald Walpin, inspector general of the service agency AmeriCorps. Walpin claims his dismissal was unjust, the result of political interference.

This one is particularly interesting because AmeriCorps is part and parcel of Obama's trademark "GIVE" bill - that is, the "youth service" corps that was put together for supposed "civic purposes."

The IG in question, Gerald Walpin, was a Bush appointee. The WSJ wrote this about the controversy:

A George W. Bush appointee, Mr. Walpin has since 2007 been the inspector general for the Corporation for National and Community Service, the federal agency that oversees such subsidized volunteer programs as AmeriCorps. In April 2008 the Corporation asked Mr. Walpin to investigate reports of irregularities at St. HOPE, a California nonprofit run by former NBA star and Obama supporter Kevin Johnson. St. HOPE had received an $850,000 AmeriCorps grant, which was supposed to go for three purposes: tutoring for Sacramento-area students; the redevelopment of several buildings; and theater and art programs.

Mr. Walpin's investigators discovered that the money had been used instead to pad staff salaries, meddle politically in a school-board election, and have AmeriCorps members perform personal services for Mr. Johnson, including washing his car.

At the end of May, Mr. Walpin's office recommended that Mr. Johnson, an assistant and St. HOPE itself be "suspended" from receiving federal funds. The Corporation's official charged with suspensions agreed, and in September the suspension letters went out. Mr. Walpin's office also sent a civil and/or criminal referral to the U.S. Attorney for the Eastern District of California.

Now remember, we were sold "an open administration" and "hope and change." What we appear to have received is just the change - about 2 cents, while the other 98 are siphoned off as political favors, and when an independent watchdog does their job and is uncovering what sure looks like a prima-facie case of looting of the public treasury, obtaining the approval of the corporation's own people and referring the matter for prosecution, The Obama Administration sacks him.

Second, there is the outright lying by The Obama Administration with regards to his "notice" to critics of his "financial overhaul" proposal:

"These are the interests that have benefited from a system which allowed ordinary Americans to be exploited," Obama said. The president said he would stand up for his plans, saying: "While I'm not spoiling for a fight, I'm ready for one. The most important thing we can do to put this era of irresponsibility in the past is to take responsibility now."

Does that include Fannie, Freddie, and Lockhart? Remember this from just yesterday?

June 19 (Bloomberg) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said.

The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday.

And my comment thereupon:

If you are underwater on your house and take a deal like this, you are as dumb as a box of rocks and have just consented to being bent over the table and violated repeatedly. That our government would propose "allowing" such a thing is fomenting financial rape upon The American Public. Period.

I will stake a case of scotch on the bet that there will be no "clear, plain" disclaimer on any such refinance "offer" containing the following language in 14-point block type:

CAUTION TO THE CONSUMER:

Refinancing of your mortgage under this program will turn your mortgage into a "recourse" loan in all 50 states. If your current mortgage is a purchase money first mortgage - that is, it was originally issued to purchase a property for you to live in as your principal residence, you may be immune under the law from collection of any amount exceeding the foreclosure recovery if you fail to pay. If you execute this refinance, you will permanently lose any such protection and may be subject to a suit for collection or even garnishment of your wages should you default. You are strongly advised to consult with both LEGAL and ACCOUNTING experts of your own choosing before signing this document to determine what, if any, rights you are WAIVING VOLUNTARILY by executing this document.

If you currently owe more on your loan than your home is worth IT MAY BE TO YOUR ULTIMATE BENEFIT TO INTENTIONALLY DEFAULT INSTEAD OF REFINANCE AND GIVE UP YOUR HOME. This is particularly true if the offered refinance extends the term of your loan or includes closing costs and fees into the new principal balance. ONLY QUALIFIED LEGAL AND ACCOUNTING ADVISERS CAN ANALYZE YOUR PERSONAL CREDIT, INCOME AND HOUSING SITUATION AND DETERMINE IF THIS REFINANCE IS IN YOUR BEST INTEREST AND YOU ARE STRONGLY ADVISED TO SEEK SUCH REPRESENTATION BEFORE EXECUTING THIS DOCUMENT. NO LOAN OFFICER OR GOVERNMENT EMPLOYEE CAN DO SO, AND ANY SUCH REPRESENTATION TO THE CONTRARY IS BOTH FALSE AND CRIMINAL FRAUD.

If President Obama's "consumer protection" was real along with his intentions in that regard, he would not have trotted out Lockhart with his "HOPE Plan changes" without making such a strong statement.

Of course he didn't, because the political cronies over at Fannie and Freddie - yes, even now - are more important to him than YOU, the citizen who was originally screwed through fraudulent appraisals, artificially inflated "values" and complex loan products that were inadequately explained to you yet sold as a means for you to "afford" to "own" a home that you in fact could never actually obtain clear title to given your personal circumstances of credit, assets and income. Yes, some of you (perhaps even most) were willing participants in this scam, but that belies the point: your culpability wasn't singular and yet now you're being asked to stick your neck on the chopping block while those who profited from your naiveté (or worse) keep their fancy houses, cars, yachts and political patronage.

Funny how the facts interfere with the "Hope and Change" fantasy Olympics.

[OldBlondBabe]

later read

[M. Espinola]

Obama is a product of the corrupt Chicago Dem machine, which is now in the White House.

[upchuck]

Gotcha. Sorry. Good question.

[Atom Smasher]

FYI post #5. Any thoughts?

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R-E-V-O-L-U-T-I-O-N?

Vote all of their a$$es OUT! Watch out for the ones that try to make good at the last minute...just to try & save their jobs...OUT!