As Chuck Baldwin asked in “Thoughts on the Spitzer Sex Scandal” posted
here the other day,
“Why did the hammer fall on Governor Spitzer now? … The Republican and
Democrat parties alike are awash in sexual immorality – both
heterosexual and homosexual. And 99% of this debauchery is never
reported. The guilty politicos are never ‘caught’, never ‘outed’.
“So, why was Governor Spitzer ‘caught’? Don’t forget that Spitzer has
been carrying on this way for at least ten years. Suddenly, now, he is
“They say that Governor Spitzer was Client 9 for this particular hooker.
So, who are clients 1-8? And who are clients 10-100? Why do we not know
their names? Anyone able to afford this prostitute’s price of $1,000 per
hour has to be someone of means. Who were they?
“Were the other clients CEOs of Fortune 500 companies? If so, which
ones? Were they congressmen or senators? If so, who? Were they White
House executives? Were they Pentagon brass? Were they media celebrities?
If so, what are their names? Were they foreign diplomats? If so, who are
they, and from which countries did they come? Do you get my point?
“How is it that in this elaborate FBI sting, only Governor Eliot Spitzer
Greg Palast offered an answer to these questions in “Eliot’s Mess”, also
posted here the other day:
“While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in
a hotel room in Washington, just down the road, George Bush’s new
Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over
$200 billion in a tryst with mortgage bank industry speculators.
“Both acts were wanton, wicked and lewd. But there’s a BIG difference.
The Governor was using his own checkbook. Bush’s man Bernanke was using
“This week, Bernanke’s Fed, for the first time in its history, loaned a
selected coterie of banks one-fifth of a trillion dollars to guarantee
these banks’ mortgage-backed junk bonds. The deluge of public loot was
an eye-popping windfall to the very banking predators who have brought
two million families to the brink of foreclosure.
“Up until Wednesday, there was one single, lonely politician who stood
in the way of this creepy little assignation at the bankers’ bordello:
“Who are they kidding? Spitzer’s lynching and the bankers’ enriching are
“Instead of regulating the banks that had run amok, Bush’s regulators
went on the warpath against Spitzer and states attempting to stop
predatory practices … ordered the states to NOT enforce their consumer
“Indeed, the feds actually filed a lawsuit to block Spitzer’s
investigation of ugly racial mortgage steering. Bush’s banking buddies
were especially steamed that Spitzer hammered bank practices across the
nation using New York State laws.
“And that very same day the bail-out was decided – what a coinkydink! -
the man called, ‘The Sheriff of Wall Street’ was cuffed. Spitzer was
“He had just finished signing these words for the Washington Post about
predatory loans: ‘Not only did the Bush administration do nothing to
protect consumers, it embarked on an aggressive and unprecedented
campaign to prevent states from protecting their residents from the very
problems to which the federal government was turning a blind eye’.
“Bush, Spitzer said right in the headline, was the ‘Predator Lenders’
Partner in Crime’. The President, said Spitzer, was a fugitive from
justice. And Spitzer was in Washington to launch a campaign to take on
the Bush regime and the biggest financial powers on the planet.
“Spitzer wrote, ‘When history tells the story of the subprime lending
crisis and recounts its devastating effects on the lives of so many
innocent homeowners the Bush administration will not be judged favorably’.
“Naming and shaming and ruining Spitzer – rarely done in these cases -
was made at the ‘discretion’ of Bush’s Justice Department.”
Here is the article that Governor Spitzer wrote for the Washington Post
just before the Bushies named, shamed and ruined him:
Predatory Lenders’ Partner in Crime
How the Bush Administration Stopped the States from Stepping in to Help
by Eliot Spitzer
Washington Post, page A25 (February 14 2008)
Several years ago, state attorneys general and others involved in
consumer protection began to notice a marked increase in a range of
predatory lending practices by mortgage lenders. Some were
misrepresenting the terms of loans, making loans without regard to
consumers’ ability to repay, making loans with deceptive “teaser” rates
that later ballooned astronomically, packing loans with undisclosed
charges and fees, or even paying illegal kickbacks. These and other
practices, we noticed, were having a devastating effect on home buyers.
In addition, the widespread nature of these practices, if left
unchecked, threatened our financial markets.
Even though predatory lending was becoming a national problem, the Bush
administration looked the other way and did nothing to protect American
homeowners. In fact, the government chose instead to align itself with
the banks that were victimizing consumers.
Predatory lending was widely understood to present a looming national
crisis. This threat was so clear that as New York attorney general, I
joined with colleagues in the other 49 states in attempting to fill the
void left by the federal government. Individually, and together, state
attorneys general of both parties brought litigation or entered into
settlements with many subprime lenders that were engaged in predatory
lending practices. Several state legislatures, including New York’s,
enacted laws aimed at curbing such practices.
What did the Bush administration do in response? Did it reverse course
and decide to take action to halt this burgeoning scourge? As Americans
are now painfully aware, with hundreds of thousands of homeowners facing
foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it
embarked on an aggressive and unprecedented campaign to prevent states
from protecting their residents from the very problems to which the
federal government was turning a blind eye.
Let me explain: The administration accomplished this feat through an
obscure federal agency called the Office of the Comptroller of the
Currency (OCC). The OCC has been in existence since the Civil War. Its
mission is to ensure the fiscal soundness of national banks. For 140
years, the OCC examined the books of national banks to make sure they
were balanced, an important but uncontroversial function. But a few
years ago, for the first time in its history, the OCC was used as a tool
In 2003, during the height of the predatory lending crisis, the OCC
invoked a clause from the 1863 National Bank Act to issue formal
opinions preempting all state predatory lending laws, thereby rendering
them inoperative. The OCC also promulgated new rules that prevented
states from enforcing any of their own consumer protection laws against
national banks. The federal government’s actions were so egregious and
so unprecedented that all fifty state attorneys general, and all fifty
state banking superintendents, actively fought the new rules.
But the unanimous opposition of the fifty states did not deter, or even
slow, the Bush administration in its goal of protecting the banks. In
fact, when my office opened an investigation of possible discrimination
in mortgage lending by a number of banks, the OCC filed a federal
lawsuit to stop the investigation.
Throughout our battles with the OCC and the banks, the mantra of the
banks and their defenders was that efforts to curb predatory lending
would deny access to credit to the very consumers the states were trying
to protect. But the curbs we sought on predatory and unfair lending
would have in no way jeopardized access to the legitimate credit market
for appropriately priced loans. Instead, they would have stopped the
scourge of predatory lending practices that have resulted in countless
thousands of consumers losing their homes and put our economy in a
When history tells the story of the subprime lending crisis and recounts
its devastating effects on the lives of so many innocent homeowners, the
Bush administration will not be judged favorably. The tale is still
unfolding, but when the dust settles, it will be judged as a willing
accomplice to the lenders who went to any lengths in their quest for
profits. So willing, in fact, that it used the power of the federal
government in an unprecedented assault on state legislatures, as well as
on state attorneys general and anyone else on the side of consumers.
The writer is governor of New York.