Obama picks snoops’ lawyer for consumer bureau

Neil Munro White House Correspondent
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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.

Pro-Obama media sites immediately investigated and criticized Wurzelbacher, and the controversy expanded further when news broke that the three state officials searched through state databases for private information on Wurzelbacher.

The officials were Helen Jones-Kelley, the director of the Ohio Department of Job and Family Services, and he two deputies, Doug Thompson and Fred Williams.

The state’s inspector general investigated the searches, and found “no legitimate agency function or purpose for checking.” The IG also said that there was “reasonable cause to conclude that Jones-Kelley committed a wrongful act,” and that she also sought to hide the privacy violation.

All three officials were suspended by Ohio’s Democratic governor, Ted Strickland, and all three subsequently left the state’s payroll. In January, Jones-Kelley was on the Drug Addiction & Mental Health Services Board in nearby Montgomery County.

Fitton’s firm sued the three individuals in March 2009, for “improperly accessing confidential state databases in retaliation for Plaintiff’s exercise of his First Amendment rights, [and threatening to] to chill or silence a person of ordinary firmness from future First Amendment activities.”

“Defendants acted knowingly, willfully and/or maliciously, and with the specific intent to deprive Plaintiff of his constitutional rights and/or with deliberate indifference to Plaintiff’s constitutional rights … [and Wurzelbacher] suffered substantial damages, including emotional distress, harassment, personal humiliation, and embarrassment,” according to the lawsuit.

The lawsuit was rejected August 2010 by Judge Algenon Marbley, who was appointed by President Bill Clinton in 1997. “While this allegation certainly supports a finding that the Defendants’ actions were improper, and perhaps worthy of discipline, it does not necessarily indicate that the actions rise to the level of a constitutional violation,” Marbley wrote in his opinion. “Plaintiff’s allegations, if found to be true, may have been in violation of Plaintiff’s privacy, they do not amount to a constitutional violation of privacy, and Plaintiff’s interest at stake do not implicate a fundamental liberty interest,” he concluded.

Fitton slammed Marbley’s decision, and subsequently appealed. “The implications of this court decision are frightening … How can the American people feel comfortable exercising their First Amendment rights when they may be subject to secret searches by politicized bureaucrats in return?”