Tens Of Millions In ‘Consumer Relief’ Funds Going To Liberal Activists
The Obama administration has quietly funneled millions (and potentially billions) of dollars to leftist organizations and politicians that promote liberal policies and win political elections at the entry-level of government, according to the Wall Street Journal.
The funneling mechanism for these funds is the Residential Mortgage-Backed Securities Working Group (RMBS), a collaborative effort by the Securities and Exchange Commission, the Department of Justice (including many United States Attorneys Offices), the New York State Attorney General’s Office, and many others.
The RMBS was created in 2012 following the mortgage-backed securities scandal that ultimately led to the Great Recession. The group is focused on finding “evidence of false or misleading statements, deception, or other misconduct by market participants (such as loan originators, sponsors, underwriters, trustees, and others) in the creation, packaging, and sale of mortgage-backed securities.”
Over the past four years, The RMBS, along with the Department of Justice, has reached “multibillion-dollar settlements with essentially every major bank in America,” the Journal reports.
Goldman Sachs received a $5.06 billion settlement from the Department of Justice regarding conspicuous packaging, marketing, and sales of mortgage-backed securities the company sold consumers from 2005 to 2007. Bank of America received the single largest civil settlement ever in American history to the tune of $16.65 billion dollars to “resolve federal and state claims against Bank of America and its former and current subsidiaries.”
All in all, these banks (and many others) were required to pay some $11 billion in consumer relief–a program that requires banks to pay back funds to consumers who lost assets due to mismanagement. What one finds after inspecting the trail of consumer relief funds is interesting, and anything but relief to the consumer.
Bank of America was able to reduce the penalty imposed by the government by simply “giving millions of dollars to liberal groups approved by the Obama administration,” according to the Washington Examiner. Allegedly, the Justice Department created a provision wherein every dollar a bank gives to nonprofits, it can claim at least two dollars off its settlement.
For example, Bank of America skirted $194 million off its $16.65 billion dollar settlement by giving nonprofits just $84 million in donations, the Examiner reports. Among those groups receiving the funding were Hispanic civil rights council, the National Urban League, and the Neighborhood Assistance Corporation of America.
Other liberal organizations to receive the consumer relief funds (intended to go directly to the victims of fraud or mismanagement) include: the National Community Reinvestment Coalition, La Raza, and many others, the Journal reports.
One of the many problems with this practice is that many of these groups are heavily involved in voter drives, community building and organizing, and “lobbying on liberal policy priorities at every level of government,” according to the Journal.
Rep. Sean Duffy, chairman of the Financial Services Committee’s Oversight and Investigations Subcommittee, said that “instead of directing settlements directly to victims or returning the money to the U.S. Treasury, President Obama set up a slush fund for community organizers and other liberal activists.”
It’s not just nonprofits and organizations receiving this funding; politicians are capitalizing on RBMS as well. Illinois Attorney General Lisa Madigan, a Democrat, said that she obtained $22.5 million in funds from Morgan Stanley’s settlement for her state’s pension funds, according to the Illinois Attorney General website.
New York Attorney General Eric Schneiderman, Democrat and chairman of the RBMS, secured in excess of $400 million from the Morgan Stanley settlement for New York state and nonprofits.
Congress is not taking action to thwart these handouts.
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