A fitting coverage for one who is our "pinstriped avenger!"
From John Curry, October 12, 2010
"Mr. Cordray in two years in office has demonstrated a willingness to sue early and often, filing lawsuits against global financial houses, rating agencies, subprime lenders and foreclosure scammers. He has wrested about $2 billion so far, a string of gilded pelts: a $475 million Merrill Lynch settlement, $400 million from Marsh & McLennan and $725 million from the American International Group."
Note from John......don't let this guy down on election day....he certainly didn't let retirees down!
http://www.nytimes.com/2010/10/12/business/12avenge.html?_r=1&src=busln&pagewanted=all
Ohio Attorney General Fights Against Wall Street
By MICHAEL POWELL
New York Times, October 11, 2010
COLUMBUS, Ohio — Back East, at the corner of Broad and Wall Streets, the view is swell. The Dow is soaring, and bankers look pleased.
Richard Cordray, Ohio’s attorney general, has reached several major settlements related to the financial crisis.
Photo: Richard Cordray (Click images to enlarge.)
"Mr. Cordray in two years in office has demonstrated a willingness to sue early and often, filing lawsuits against global financial houses, rating agencies, subprime lenders and foreclosure scammers. He has wrested about $2 billion so far, a string of gilded pelts: a $475 million Merrill Lynch settlement, $400 million from Marsh & McLennan and $725 million from the American International Group."
Note from John......don't let this guy down on election day....he certainly didn't let retirees down!
http://www.nytimes.com/2010/10/12/business/12avenge.html?_r=1&src=busln&pagewanted=all
Ohio Attorney General Fights Against Wall Street
By MICHAEL POWELL
New York Times, October 11, 2010
COLUMBUS, Ohio — Back East, at the corner of Broad and Wall Streets, the view is swell. The Dow is soaring, and bankers look pleased.
Richard Cordray, Ohio’s attorney general, has reached several major settlements related to the financial crisis.
Photo: Richard Cordray (Click images to enlarge.)
But here on East Broad Street, the mood is gloomier. At least 90,000 residential and commercial foreclosure notices will be filed in Ohio this year. Pension funds for teachers, secretaries and janitors have suffered grave losses. And multitudes of the unemployed in Ohio now speak of turning to prayer.
Ohio’s attorney general, Richard Cordray, might be seen as their pinstriped avenger.
“There’s a belief here that Wall Street is a fixed casino and it’s back in business, and we’re left holding the bag,” said Mr. Cordray, whose office overlooks East Broad. “It’s important for us to show we’ll go after a company that does wrong.”
Mr. Cordray in two years in office has demonstrated a willingness to sue early and often, filing lawsuits against global financial houses, rating agencies, subprime lenders and foreclosure scammers. He has wrested about $2 billion so far, a string of gilded pelts: a $475 million Merrill Lynch settlement, $400 million from Marsh & McLennan and $725 million from the American International Group.
Last week, he filed suit against GMAC Mortgage, accusing the loan servicer of filing fraudulent affidavits in hundreds of Ohio foreclosures.
His office has returned money to investors, pension funds, schools and cities. And he has directed millions to agencies fighting foreclosure.
“We see what Washington doesn’t: the houses lying vacant, the eyesore stripped for copper piping with mattresses out back,” Mr. Cordray says. “We bailed out irresponsible banks, but we forgot about everyone else.”
It speaks to this political age that such words are more rarely heard from federal regulators, who walk quietly and carry big bailout checks. Instead state attorneys general, in this case, a sandy-haired 51-year-old Democrat who sits about 400 miles from Washington, are giving full throat to popular outrage.
If Eliot Spitzer, the former New York attorney general, was the prototype of this breed, a handful of current ones, like M
r. Cordray, Martha Coakley of Massachusetts, Lisa Madigan of Illinois, Tom Miller of Iowa and Roy Cooper of North Carolina, lay claim to his mantle.
Ohio’s attorney general, Richard Cordray, might be seen as their pinstriped avenger.
“There’s a belief here that Wall Street is a fixed casino and it’s back in business, and we’re left holding the bag,” said Mr. Cordray, whose office overlooks East Broad. “It’s important for us to show we’ll go after a company that does wrong.”
Mr. Cordray in two years in office has demonstrated a willingness to sue early and often, filing lawsuits against global financial houses, rating agencies, subprime lenders and foreclosure scammers. He has wrested about $2 billion so far, a string of gilded pelts: a $475 million Merrill Lynch settlement, $400 million from Marsh & McLennan and $725 million from the American International Group.
Last week, he filed suit against GMAC Mortgage, accusing the loan servicer of filing fraudulent affidavits in hundreds of Ohio foreclosures.
His office has returned money to investors, pension funds, schools and cities. And he has directed millions to agencies fighting foreclosure.
“We see what Washington doesn’t: the houses lying vacant, the eyesore stripped for copper piping with mattresses out back,” Mr. Cordray says. “We bailed out irresponsible banks, but we forgot about everyone else.”
It speaks to this political age that such words are more rarely heard from federal regulators, who walk quietly and carry big bailout checks. Instead state attorneys general, in this case, a sandy-haired 51-year-old Democrat who sits about 400 miles from Washington, are giving full throat to popular outrage.
If Eliot Spitzer, the former New York attorney general, was the prototype of this breed, a handful of current ones, like M
r. Cordray, Martha Coakley of Massachusetts, Lisa Madigan of Illinois, Tom Miller of Iowa and Roy Cooper of North Carolina, lay claim to his mantle. Photo: Martha Coakley, Lisa Madigan, Tom Miller
Like recessionary scouts, they spot trouble, like a rapacious foreclosure-rescue operator, a predatory credit card company or a financial firm draining a pension fund.
Ms. Coakley secured millions of dollars in mortgage modifications from Countrywide Financial and reached a $102 million settlement with Morgan Stanley over its role in financing the subprime loans that fed the housing crash in Massachusetts.
“We were the first to go after predatory loans — we’re not waiting for federal agencies to act,” Ms. Coakley said.
Some express skepticism, suggesting that such lawsuits are emotionally pleasing but economically destructive. Former Senator Michael DeWine, a Republican who is running against Mr. Cordray, a Democrat, in the November election, has implied that Mr. Cordray wields an antibusiness cudgel. Better to rely on federal regulators, others argue, to constrain global corporations.
That strikes James E. Tierney, director of the National State Attorneys General Program at Columbia, as a bit beside the point.
“Is state action as effective as a federal regulator going after these companies? Absolutely not,” says Mr. Tierney, a former state attorney general for Maine. “But when regulators are too worried about giving offense, there’s no reason an enterprising attorney general can’t go in there,”
Born in Grove City, Ohio, Mr. Cordray was educated at Michigan State, Oxford and the University of Chicago Law School. A Supreme Court clerk, he also argued cases before the court. In 1987, he enjoyed a run as a five-time winner on the television show “Jeopardy!”
Somewhere along the way, he hankered for more. His father ran a program for mentally disabled people; his mother, a social worker, founded an organization of foster grandparents; and he wanted to enter the public sphere.
“We were the first to go after predatory loans — we’re not waiting for federal agencies to act,” Ms. Coakley said.
Some express skepticism, suggesting that such lawsuits are emotionally pleasing but economically destructive. Former Senator Michael DeWine, a Republican who is running against Mr. Cordray, a Democrat, in the November election, has implied that Mr. Cordray wields an antibusiness cudgel. Better to rely on federal regulators, others argue, to constrain global corporations.
That strikes James E. Tierney, director of the National State Attorneys General Program at Columbia, as a bit beside the point.
“Is state action as effective as a federal regulator going after these companies? Absolutely not,” says Mr. Tierney, a former state attorney general for Maine. “But when regulators are too worried about giving offense, there’s no reason an enterprising attorney general can’t go in there,”
Born in Grove City, Ohio, Mr. Cordray was educated at Michigan State, Oxford and the University of Chicago Law School. A Supreme Court clerk, he also argued cases before the court. In 1987, he enjoyed a run as a five-time winner on the television show “Jeopardy!”
Somewhere along the way, he hankered for more. His father ran a program for mentally disabled people; his mother, a social worker, founded an organization of foster grandparents; and he wanted to enter the public sphere.
Photo: Richard Cordray
Mr. Cordray began running for office.
His yearning often went unrequited; voters, he noted with a hike of the eyebrows, elected him state representative but rejected his run for Congress and an early attempt at state attorney general.
He shrugs.
“I really got my head pounded in over the years in politics,” Mr. Cordray says. “My wife thought I was nuts.”
Eventually, he downsized his ambitions, and ran successfully for Franklin County treasurer and later for state treasurer. And in 2008, he won a special election for attorney general.
Mr. Cordray is no William Jennings Bryan inveighing against the evils of monopoly capital. He can be eloquent about corporate misbehavior, in an eyes-downcast and soft-spoken fashion. (His language reads hotter on the page than it sounds in person.)
He is, however, tapping a populist tradition in Ohio. This is where politicians mounted challenges to the Standard Oil monopoly of John Rockefeller and where Senator John Sherman led a late 19th-century campaign to pass the Sherman Antitrust Act, which was the first law to require the federal government to investigate companies suspected of running cartels and monopolies.
Mr. Cordray carefully describes his allegiance to capitalism, although he says the financial crisis should explode forever the efficient-markets theory, popular with economists, that the best market is a self-correcting one. (Adam Smith’s “Wealth of Nations” shares space on his office bookshelf with books by the urbane Keynesian John Kenneth Galbraith.)
“The notion that banks will just get things right over time is perhaps true,” Mr. Cordray says. “But over what time period, and at what terrible cost to the individual American?”
Certainly, he has not minced words in pursuing a steady stream of cases against corporations.
He accused Marsh & McLennan of conspiring to eliminate competition in the insurance business by generating fictitious quotes. He denounced three credit rating firms, Fitch Ratings, Moody’s Investor Services and Standard & Poor’s, for giving inflated ratings to packages of troubled mortgages put together by the big investment houses. He says that Ohio pension funds lost close to half a billion dollars by investing in those triple-A rated securities.
And last October, he accused Bank of America officials of concealing critical facts in the acquisition of Merrill Lynch, even as that firm careened toward insolvency. Top bankers, he said, had not come remotely clean about the extent of the losses at Merrill and its bonuses.
The lawsuit against Bank of America was the first of its kind, although Mr. Cordray’s actions drew rather less press than a lawsuit filed months later by Attorney General Andrew M. Cuomo of New York. Mr. Cuomo, whose skill with the tactical leak, news release and the lawsuit is considerable, tends not to work closely with his fellow state attorneys general, say two officials from states other than Ohio.
Attorneys general are perhaps more successful at extracting large sums of money than in changing corporate behavior. A Goldman Sachs or Marsh & McLennan, to this view, tends to see such settlements as a cost of doing business.
“The settlements are large, but the changes in behavior don’t seem to be that large,” said Daniel C. Richman, a former federal prosecutor and professor at Columbia Law School. “These targets have massive amounts of money to pay off and continue on their merry way.”
Raise this criticism to Mr. Cordray and he nods in agreement.
“In an ideal world, if the S.E.C. had done its job, that would be much better,” he said. “Our settlements make up for the losses fractionally.”
As it happens, Mr. Cordray now faces a more existential threat. Legal challenges to corporate misbehavior are not proven electoral gold. This year, Ms. Coakley, a Democrat, fell to Republican Scott Brown in a race to fill the Senate seat of Edward M. Kennedy.
And polls show Mr. Cordray running behind in his race with Mr. DeWine. He’s no natural glad-hander — he apologizes when he realizes he has automatically extended his hand at a luncheon. More paradoxical, he finds himself at risk of being identified with “them,” which is to say the establishment that Ohio residents view as having failed them.
Again, he shrugs. He is not inclined to blame voters for his troubles.
“Politicians are kind of like adolescents, always looking in the mirror and assuming that’s what people see,” he says. “But there’s a great anxiety out there, a great unease about our future. Most people are hurting, and they don’t have the time to pay attention to us.”
His yearning often went unrequited; voters, he noted with a hike of the eyebrows, elected him state representative but rejected his run for Congress and an early attempt at state attorney general.
He shrugs.
“I really got my head pounded in over the years in politics,” Mr. Cordray says. “My wife thought I was nuts.”
Eventually, he downsized his ambitions, and ran successfully for Franklin County treasurer and later for state treasurer. And in 2008, he won a special election for attorney general.
Mr. Cordray is no William Jennings Bryan inveighing against the evils of monopoly capital. He can be eloquent about corporate misbehavior, in an eyes-downcast and soft-spoken fashion. (His language reads hotter on the page than it sounds in person.)
He is, however, tapping a populist tradition in Ohio. This is where politicians mounted challenges to the Standard Oil monopoly of John Rockefeller and where Senator John Sherman led a late 19th-century campaign to pass the Sherman Antitrust Act, which was the first law to require the federal government to investigate companies suspected of running cartels and monopolies.
Mr. Cordray carefully describes his allegiance to capitalism, although he says the financial crisis should explode forever the efficient-markets theory, popular with economists, that the best market is a self-correcting one. (Adam Smith’s “Wealth of Nations” shares space on his office bookshelf with books by the urbane Keynesian John Kenneth Galbraith.)
“The notion that banks will just get things right over time is perhaps true,” Mr. Cordray says. “But over what time period, and at what terrible cost to the individual American?”
Certainly, he has not minced words in pursuing a steady stream of cases against corporations.
He accused Marsh & McLennan of conspiring to eliminate competition in the insurance business by generating fictitious quotes. He denounced three credit rating firms, Fitch Ratings, Moody’s Investor Services and Standard & Poor’s, for giving inflated ratings to packages of troubled mortgages put together by the big investment houses. He says that Ohio pension funds lost close to half a billion dollars by investing in those triple-A rated securities.
And last October, he accused Bank of America officials of concealing critical facts in the acquisition of Merrill Lynch, even as that firm careened toward insolvency. Top bankers, he said, had not come remotely clean about the extent of the losses at Merrill and its bonuses.
The lawsuit against Bank of America was the first of its kind, although Mr. Cordray’s actions drew rather less press than a lawsuit filed months later by Attorney General Andrew M. Cuomo of New York. Mr. Cuomo, whose skill with the tactical leak, news release and the lawsuit is considerable, tends not to work closely with his fellow state attorneys general, say two officials from states other than Ohio.
Attorneys general are perhaps more successful at extracting large sums of money than in changing corporate behavior. A Goldman Sachs or Marsh & McLennan, to this view, tends to see such settlements as a cost of doing business.
“The settlements are large, but the changes in behavior don’t seem to be that large,” said Daniel C. Richman, a former federal prosecutor and professor at Columbia Law School. “These targets have massive amounts of money to pay off and continue on their merry way.”
Raise this criticism to Mr. Cordray and he nods in agreement.
“In an ideal world, if the S.E.C. had done its job, that would be much better,” he said. “Our settlements make up for the losses fractionally.”
As it happens, Mr. Cordray now faces a more existential threat. Legal challenges to corporate misbehavior are not proven electoral gold. This year, Ms. Coakley, a Democrat, fell to Republican Scott Brown in a race to fill the Senate seat of Edward M. Kennedy.
And polls show Mr. Cordray running behind in his race with Mr. DeWine. He’s no natural glad-hander — he apologizes when he realizes he has automatically extended his hand at a luncheon. More paradoxical, he finds himself at risk of being identified with “them,” which is to say the establishment that Ohio residents view as having failed them.
Again, he shrugs. He is not inclined to blame voters for his troubles.
“Politicians are kind of like adolescents, always looking in the mirror and assuming that’s what people see,” he says. “But there’s a great anxiety out there, a great unease about our future. Most people are hurting, and they don’t have the time to pay attention to us.”
posted by Kathie Bracy at 6:20 PM
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