Obama picks snoops’ lawyer for consumer bureau

President Barack Obama wants the first chief of his new Consumer Financial Protection Bureau to be Richard Cordray, the former Ohio attorney general who offered free legal support to three state officials who snooped through confidential state databases in search of information about Joe Wurzelbacher, nicknamed “Joe the Plumber.”

Then-State Attorney General Cordray enthusiastically rushed to the defense of these bureaucrats when Joe the Plumber sued them in court,” said Tom Fitton, the head of Judicial Watch, a law firm that represented Wurzelbacher. “Mr. Cordray has a record of placing politics above the rule of law … he is no friend of the little guy,” said Fitton.

Wurzelbacher’s lawsuit was rejected in August 2010 by a Democrat-appointed judge. The decision was appealed in January.

Cordray, a Democrat, chose to defend the three officials — one of whom was a prominent Obama donor — even though state law allowed him to decline to support employees when they acted “manifestly outside the scope of … official employment or official responsibilities, with malicious purpose, in bad faith or in a wanton or reckless manner.”

Cordray explained his decision to the Dayton Daily News in November 2009 by saying “we have followed the process provided … and had a judgment to make and that’s the judgment we made.”

Cordray’s decision was immediately criticized by Republicans, including local prosecutor Mike DeWine, who said “I think taxpayers will be shocked to find that their tax dollars are going to defend them.” A year later, the voters tossed Cordray out of the AG’s office and elected DeWine.

“It was a discretionary call,” said Fitton. “Given the misconduct that was found, and that the [employees] were placed on leave, and were forced to resign, [the snooping] was done outside their official capacities” and did not deserve the state’s legal support. (White House will not name Elizabeth Warren to lead consumer bureau)

Despite Cordray’s courtroom support for government snoops, Obama chose him to head the new consumer protection bureau. “As Ohio’s attorney general, Rich helped recover billions of dollars in things like pension funds on behalf of retirees, and stepped up the state’s efforts against unscrupulous lending practices,” Obama said during a six-minute speech in the White House’s Rose Garden.

The new bureau puts “one consumer watchdog in charge, with just one job: looking out for regular people in the financial system,” Obama said. He was flanked by two Tele-prompters, Cordray, Treasury Secretary Timothy Geithner, and Elizabeth Warren, a Harvard law professor who urged greater oversight of the financial sector by government-funded lawyers.

Obama did not answer questions.

Warren had worked for six months to establish the new agency and was slated to become the bureau’s first chief. The Senate’s Republican minority strongly opposed her role and the agency’s clout. Cordray’s nomination is widely seen as a White House effort to bypass the Republican opposition that would have faced Warren. (Warren: Consumer bureau ‘in reality is much better than the dream ever was’)

The Cordray controversy began when Obama was campaigning in Wurzelbacher’s Toledo neighborhood on October 12, 2008. Wurzelbacher asked about his tax plans and Obama’s responded that “It’s not that I want to punish your success; I just want to make sure that everybody who is behind you that they’ve got a chance at success, too. I think when you spread the wealth around, it’s good for everybody.” The media covered the exchange widely and Wurzelbacher appeared on ABC and CBS news shows. Republican candidate John McCain also cited the conversation in a presidential debate three days later.