Washington Prowler

Driving in Reverse

What comes after Emanuel? Soros-Sandler progressives target new mortgage industry devils.

By 9.13.10

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WHAT COMES AFTER EMANUEL?
White House insiders say that the "vibe" inside the Obama Administration is that "Rahm is running" for mayor of Chicago, but that it is perhaps the least surprising turn of events in what is expected to be "a house cleaning" after the midterm elections."Maybe it's just me," says a longtime Obama aide, "but I think a lot of us feel that the President was ill-served by White House staff that did not have the pre-existing relationship or ties to him, and the result is the mess we're in right now. The President needs more of what I'd call the 'true believers' close to him and a lot of us think that is what is going to happen after November."

White House chief of staff Rahm Emanuel has not announced whether he will in fact run for mayor of Chicago, though it appears he is undertaking the kind of pre-campaign research and preparation to do just that. President Obama has already endorsed such a run.

Emanuel has been the No. 1 example of a "non-Obama insider" for many Democrats who have complained about the mounting failures of the Administration. Before signing on with Obama, Emanuel was a strong Hillary Clinton supporter. "Obama hired [Emanuel], not because he trusted him, but because he had more experience in the White House and in Washington than he, or just about anyone else Obama associated himself with, did."

Emanuel, according to longtime associates, took the job, in part, because he had his eye on long-term political strategy for himself. As one of them puts it, "You had the bulk of Chicago's liberal establishment tied into Obama, some of whom Emanuel did not have strong relationships with. These past two years have been great for him to solidify his political and fundraising connections back home for whatever it is he decides to do."

Much of the D.C. parlor talk now is who will replace him. The current favorite -- mostly among journalists who use him as a source -- is Phil Schiliro, the current Assistant to the President for Legislative Affairs. Several weeks ago, when, regardless of the Chicago mayoral run, it was assumed that Emanuel would be jumping ship, Schiliro was one of several names in play. But with Republicans poised to gain ground on Capitol Hill, and with the antagonistic approach to legislation the Obama Administration has taken, White House insiders now think Schiliro would not be the right man to reach out to Republicans on deal-making.

What some Obama White House aides hope happens is that Obama reaches down to some of his longer-standing political acquaintances and draws them back into the "inner circle." "If we only have two years left, we need true believers who are going to work hard to put the country on the path that we want the country to be on, and do it in a way that make it very difficult for the next administration to roll back. That is the political calculation we want to see in the President."

MORTGAGE BUSTERS
Leftist groups with ties to George Soros and other big-money donors of the Obama Administration are pressuring Democrat House committee aides and legislators to demand Congressional hearings on the reverse mortgage industry. Those companies' profiles have been raised over the past six months, in part, due to extensive cable TV and radio advertising. In fact, over the summer, Mother Jones and the left-wing George Soros-funded Media Matters launched attacks against American Advisors Group (AAG), a firm that markets reverse mortgages.

A reverse mortgage is a type of home loan marketed to seniors that allows them to draw cash on the home equity that built up over years of mortgage payments they have paid. The lender typically requires no repayment until the homeowner no longer uses the home. In fact, the Obama Administration's Department of Housing and Urban Development offers a reverse mortgage program similar to those advertising in today's tough economic climate.

The timing of the attacks and the attempt to use the summer media reports to push for congressional activity is not a coincidence. "The story gets planted on a website, and then Media Matters picks it up and tries to make a mountain out of a molehill, and then groups like Free Press or the Center for American Progress or Citizens for Responsibility and Ethics in Washington (CREW) jump in and push the story into the more political arena," says a former MoveOn.org staffer.n>

According to political consultants who have in the past coordinated with the leftist and secretive Democracy Alliance as well as a number of other leftist donor organizations, such as the New Progressive Coalition, the Progressive Donor Network, the Arca Foundation and Proteus Fund, many of them with ties to George Soros, among others, the attacks on AAG, as well as other companies that advertise on Fox News and conservative talk radio, are largely being coordinated by the political operations with ties to left-wing media.

"There isn't a single progressive publication, think tank or blogger who wouldn't kill to tap into the connections and money that is sitting out there from the Alliance or any of those groups," says a former political consultant who is now a member of the Obama Administration. "If Soros or one of the Alliance members wants something done -- or someone thinks it will help them connect to the Alliance or one of the donors -- it usually gets done."

In this case, the attacks on the reverse-mortgage industry, and AAG in particular, appear to be for the pleasure of Herbert and Marion Sandler, billionaires and the former co-CEOs of Golden West Financial. Until 2006, Golden West operated as the World Savings Bank, which was one of the innovators of the so-called "pick a pay" mortgage. Under the terms of such a loan, homeowners were allowed to pay less than the amount of interest being charged, sometimes for as long as a decade. The Sandlers never had to deal with the fallout of such loans. They sold their institution to Wachovia in 2006 for billions, and the rest is history.

The Sandlers have used their profits to join forces with leftist Soros in the Alliance, among other entities, which help fund just about every left-wing entity with ties to the Obama Administration, including MoveOn.org, Free Press, and Media Matters. Marion Sandler has served on the board of the Center for American Progress, and the Sandlers recently donated $10 million for the creation of ProPublica, a nonprofit, left-leaning investigative journalism operation founded by former employees of the Wall Street Journal.

In the case of AAG, some of the attacks and research against the business appears to have been generated by individuals with ties to the Center for Responsible Lending (CRL) and its for-profit network of affiliated credit unions and lending funds known as the "Center for Community Self-Help." Self-Help pushes subprime lending programs, while the Center for Responsible Lending attacks other for-profit loan programs. Its website has linked to a number of article warning consumers against reverse mortgages, claiming that industry is the next subprime disaster.

Besides the Sandlers, another major private donor for CRL is notorious hedge-fund operator John Paulson, whose company paid Goldman Sachs to structure a transaction in which Paulson & Co. took short positions against mortgage securities that Paulson's firm thought might be ripe for collapse, but which were sold to Goldman clients as longer-term investment vehicles. Paulson won big; Goldman clients lost. Paulson gave CRL $15 million three years ago, and according to an ethics complaint filed against CRL, some of those funds were used by CRL to lobby Congress. Paulson was not a part of the ethics complaint.

Back in 2007, CRL lobbied Congress for legislation blocking such loan programs as short-term "payday" loans, has lobbied for and supported the Obama Administration's financial services reform agenda, and sources say, there is a move afoot to fund a campaign that would encourage Congress to look at the reverse-mortgage industry. Perhaps most notoriously, CRL and its for-profit partner have had extensive ties to Association of Community Organizers for Reform Now (ACORN), to promote their home-mortgage programs.

Now, beyond the attacks on reverse mortgages, the Soros-Sandler-backed groups also plan to coordinate a campaign against renewal of the Bush tax cuts, and in support of greater stimulus spending by the federal government. 

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