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“Jeb Bush’s Big Lehman Brothers Problem”: Jeb Won’t Tell You What Jeb Did Exactly While Working On Wall Street

Jeb Bush says he released 33 years of tax returns this week because he wants to be the most transparent candidate to run for president in 2016. But if that’s really the case, why is he continuing to obfuscate some of his most lucrative and potentially controversial business dealings he had before announcing his candidacy, like his work as an “adviser” for investment bank Lehman Brothers?

So, if Jeb won’t tell you what Jeb exactly did while working on Wall Street, in the interests of transparency and disclosure, I will try.

Not much is known about what Bush actually did for Lehman—the firm that went belly-up in 2008 and sparked the wider financial crisis, and Barclays, the bank that purchased Lehman out of bankruptcy and continues to work out of its midtown Manhattan headquarters. He began working for the former after his term as Florida governor ended in 2007, and continued working for the latter until the end of 2014, when he decided to run for president.

The two banks were his biggest sources of income in recent years: Bush earned more than $14 million working for Lehman and then Barclays, which based on my understanding of simple math accounted for nearly half of the $29 million he made after he left government. Yet in Tuesday’s disclosure, and even in many of his public comments, Bush has downplayed his work for the two banks.

“I also was hired as a senior advisor to Barclays where I advised their clients on a wide range of global economic issues with a mind towards navigating government policies,” he writes in an essay that accompanied the tax returns. It is the only sentence that refers to his time at Barclays. And he doesn’t mention Lehman at all.

In recent weeks I’ve interviewed numerous Wall Street executives about Jeb Bush, and his role at both firms. What emerges is a portrait of a bank “adviser” who operated more like a high-level investment banker.

A spokeswoman for Bush declined to provide specifics about his work for the banks other than point to various media accounts, including those by this reporter. But Bush, according to people with direct knowledge of his activities, helped the firm look for business from well-heeled clients, including everyone from hedge funds to billionaire investors like Carlos Slim Helu, the Mexican business magnate widely regarded as the world’s richest man.

And, in at least one instance, he appears to have been Lehman’s go-to man for an emergency investment during the 2008 financial crisis.

In his seven years working for both banks, Bush was paid handsomely for this work, but he was also thrust into several awkward situations. A couple of years ago, he met with executives from the Minneapolis-based hedge fund Whitebox Advisors, a major Barclays client. Bush was supposed to be providing high-level insight into economic issues for the big hedge fund, which was one of a handful that correctly predicted the mortgage meltdown that eventually led to Lehman’s collapse.

But according to people who were present, the meeting soon turned uncomfortable when Whitebox’s chief executive, Andrew Redleaf, began to openly browbeat Bush on his brother’s record as president, including his handling of the Iraq War.

A spokeswoman for Redleaf declined to comment but would not deny the account; a spokeswoman for Bush had no comment.

One investment banker who has direct knowledge of Bush’s work for Lehman and Barclays says over the past seven years, the former governor has had “dozens and dozens and dozens” such meetings with clients and prospective clients of Lehman and Barclays. One of those clients included Slim, the Mexican billionaire, which looms as one of the most controversial aspects of Bush’s private business dealings. This is because, if accurate, it shows how closely Bush worked with Lehman officials during the firm’s final days.

According to former Lehman executives and various news reports, Bush met with Slim to ask him to make an investment in the firm in the summer of 2008. The investment never happened, and Lehman, famously, filed for bankruptcy in September of that year.

Bush campaign spokeswoman Kristy Campbell seems to deny at least some of this account. “Governor Bush met with Carlos Slim. It was regarding a specific telecom project,” she said in an email. “It was not regarding [a] general Carlos Slim infusion of cash to save Lehman Brothers.”

She would not deny, however, that this investment could in some way have helped prop up Lehman Brothers. In fact, Campbell also refused to outright deny past media reports, including this one in The New York Times, which cites emails explaining how Bush was involved in something called “Project Verde,” a firm-wide effort to get an investment from Slim and potentially help save Lehman from collapse in 2008.

Indeed, former Lehman executives say senior executives at the firm had discussed using Bush as a direct conduit to policymakers—including those reporting to his brother, who was president during the financial crisis—as Lehman was sinking further into insolvency and regulators balked at including the firm in their broader bailout packages.

Campbell says Bush never intervened with people reporting to his brother. “I do want to be very explicit on one point: Governor Bush was never asked to contact his brother’s administration regarding Lehman, and if he had been asked, would not have done it,” she said in an email.

Don’t expect to find any of what I’m reporting here when Bush releases a more detailed financial disclosure form in a few weeks with federal election officials. Given Lehman’s role in the 2008 financial meltdown, it’s easy to see why the former governor would like people to focus on what he billed the other day as the “broken tax system that’s one of the most convoluted and anti-growth in the world” rather than the work he did that earned him millions and forced him to pay into that broken tax system.

It’s of course hard to argue that Bush shouldn’t earn a living from his contacts in business that he made in government (Bush stated he never lobbied on behalf of a company) or inherited through his family connections. This is especially true when you consider the hyper-sleaze of Hillary Clinton, the likely Democratic nominee, who became a mega millionaire almost overnight by constructing possibly the most conflicted political-business-charity machines in modern political history.

But as an avowed small-government conservative, you would think Bush would know all about corrosive effects of crony capitalism, where executives at the big banks sit at its epicenter, ready to call in favors from politicians who in turn can help make those executives make a lot of money. For that reason, it’s time for Jeb to fess up about all the work he did for Lehman and Barclays. Only then can he brag that he’s acting “in the spirit of transparency.”

 

By: Charles Gasparino, The Daily Beast, July 3, 2015

July 5, 2015 Posted by | Financial Crisis, Jeb Bush, Lehman Brothers | , , , , , , , | 1 Comment

“Which Interests Does He Have In Mind?”: Jeb Bush Says He’s Going To Tackle Special Interests In Washington. Don’t believe Him

Jeb Bush didn’t just release 33 years of his tax returns this week. He also had his campaign create a snappy online presentation, complete with graphs, to help everyone understand them. In the accompanying narrative there was one line that caught my eye. While he may have made millions after leaving the Florida governor’s mansion, Jeb wrote, he didn’t debase himself by doing any lobbying. “That was a line I drew and it was the right one. And it’s a line more people should be drawing in Washington, D.C., where lobbying has become our nation’s premier growth industry. And this culture of special interest access is a problem I plan to tackle as President.”

I don’t know about you, but I’m eager to hear more. How exactly will Bush tackle the culture of special interest access? Does he have some strict new rules in mind to lock the revolving door between government and business? Or will it be merely the power of his personal integrity that will keep those dastardly special interests from getting what they want?

Bush might surprise us, but if I had to guess I’d say this is something he’ll pay lip service to during the campaign, but then do little or nothing about if he actually becomes president. He’d be following a well-worn path if he does — candidates always say they’re going to change Washington’s culture and reduce the power of special interests, but somehow they never do.

That’s in large part because the institutions, norms, and relationships of Washington, D.C., are so firmly entrenched that one administration can’t do too much about them. And whatever kind of reform a president might have in mind, it’s always secondary to the policy goals any administration has, so it’s easy to put it to the side in favor of more pressing issues.

While some might like to shut the doors of the Capitol to lobbyists, that’s impossible — their work is protected by the First Amendment, which after mentioning freedom of religion, speech, the press, and assembly, says that we all have a right “to petition the Government for a redress of grievances.” And though there’s plenty of petitioning going on and plenty of grievances crying out for redress, there has actually been a slight decline in the number of registered lobbyists in recent years: While the number peaked at 14,829 in 2007, last year it fell to 11,800. The drop may be due to any number of reasons, but one lobbyist friend told me he was leaving the business because a divided government means there just aren’t enough bills being passed to lobby about.

Even when they make a sincere effort, presidents have trouble transforming Washington culture. When Barack Obama took office, he announced that no registered lobbyists would be allowed to serve in his administration. That probably helps explain the reduction in registered lobbyists, since many Democrats hoped to get a job with the administration one day, but few people believe the rule has seriously diminished the influence of special interests. After all, the administration found over and over that people it wanted to hire had lobbyist pasts, so it kept making exceptions.

On the flip side, there are public-spirited people who claim they have been shut out by the administration for being the kind of registered lobbyists we would presumably want more of. We’re talking about people who lobbied for causes like domestic violence prevention and environmental protection.

Which brings up the question: How special does an interest have to be before it’s problematically special? When we hear that term, it’s always said with disdain, assuming that somebody’s getting something they don’t deserve. In practice, though, we think of only the interests we don’t like as the ones who shouldn’t have influence.

You could look at it this way: You just need to pick the constellation of special interests you prefer, and vote accordingly. Would you rather that labor unions, environmental groups, and civil rights organizations had the ear of the government, or oil companies, anti-abortion groups, and the NRA? They’re all special interest groups to one degree or another, even if they all believe that what’s good for them is good for America. Chances are that if you dislike a politician for being beholden to special interests, what really turns you off is which interests she listens to.

Of course, that tells only part of the story. Some of the most effective special interest influence is exercised in ways that don’t make headlines, on behalf of interests most people know little about, and much of that isn’t partisan. For years before the financial crisis of 2008, the banking industry was acknowledged by many as the single most effective special interest lobby in Washington, in part because the congressional committees that had oversight of the industry were basically in the industry’s pocket — and that applied to both Republicans and Democrats.

The truth is that special interests are always going to get what they want to at least some degree, because that’s just the nature of special interests. When you have a particular interest in something — let’s say you’re a defense contractor who really wants the government to fund your new fighter plane — you’re going to marshal all kinds of resources to make it happen. The rest of us may have a diffuse interest in the plane not being built, if it’s a boondoggle. But we probably won’t organize to fight it, and our voices won’t be heard by those making the decision.

I’m not arguing for cynicism, or saying that every administration is equally steeped in the kind of legalized corruption that is endemic to Washington. But when a politician tells us he wants to get rid of the special interests, we ought to ask him which interests he has in mind, and exactly how he’s going to go about it. Because chances are it’s little more than posturing.

 

By: Paul Waldman, Senior Editor, The American Prospect; Contributor, The Week, July 2, 2015

July 5, 2015 Posted by | Jeb Bush, Lobbyists, Special Interest Groups | , , , , , , , | Leave a comment

“The Hunt For Clinton ‘Scandals'”: Newly Released Emails Reveal The Hillary You (Still) Don’t Know

With the release of the first batch of the thousands of emails that Hillary Clinton turned over to the State Department, what has America learned about the former Secretary of State and current presidential candidate?

Nothing voyeuristic or venal to thrill journalists ever on the hunt for Clinton “scandals” — but just a few things that voters might be learning for the first time, if all they know about her is what the mainstream media always tell them.

According to the New York Times – a “liberal” newspaper that no longer attempts to conceal its longstanding animus against the Clintons – this initial batch of 3,000-plus emails is “striking” in its “banality,” because so many of the messages from her early months as the nation’s third-ranking official deal with daily problems like scheduling, fax machines, and snow days at Foggy Bottom. Seeking to embarrass her whenever possible, the Times account leads with her apparent concern over possible press comment on a 2009 joint interview with her most notorious predecessor.

Evidently she fretted, for a few minutes at least, that her “distant” relationship with President Obama might be compared invidiously to former Secretary of State Henry Kissinger’s leech-like fastening upon his old boss, Richard M. Nixon.

“In thinking about the Kissinger interview, the only issue I think that might be raised is that I see POTUS at least once a week while K saw Nixon every day,” noted Clinton in an email to aides, using the abbreviation for President of the United States. Then the woman who helped to impeach Nixon snarked: “Of course, if I were dealing w that POTUS I’d probably camp in his office to prevent him from doing something problematic.”

Like so many matters dredged up in her old emails, that fleeting anxiety has faded into oblivion. As for weightier decisions, declares Times reporter Peter Baker, those must have been discussed and debated on the telephone rather than via email, where she seemed “acutely aware that anything she wrote could someday be read by a wider audience.” (A strange observation in a newspaper where the working assumption is that she schemed to conceal her emails from public scrutiny forever, but never mind.)

Still, if these emails offer no hint of titillating scandal or slander, they cannot be said to offer no insight into America’s best-known female leader. While the Times grudgingly concedes that these messages reveal “hints of personality,” Time magazine found a woman in full – and someone whose very existence may surprise voters more familiar with the secretive, imperious, self-centered figure so often caricatured in American media over the past 25 years.

Time informs us that the “complex portrait” of Clinton emerging from the emails shows “a management style that is efficient under pressure and reflective in the late hours of the day,” with “bursts of thinking” that sometimes erupted during “sleepless nights circling the globe.” Nothing new there: Everyone knows she is sharp, thoughtful, and driven to get stuff done. But Time describes her with adjectives rarely used in conventional profiles: “humble,” “self-deprecating,” “concerned,” “generous,” and “one of the best bosses” that members of her staff have ever had.

Humble? She usually went out of her way to meet with friends and colleagues, rather than insisting they come to her. Self-deprecating? She joked constantly about herself and her foibles. Concerned? She repeatedly sought ways to help a young girl she had met in Yemen — and she admonished John Podesta, an old friend who now serves as her campaign chair, to “wear socks to bed to keep your feet warm.” Generous? She often expressed gratitude to staff and kept close track of births, illnesses, and other milestones affecting friends, acquaintances, and employees.

Does any of that sound familiar? Not unless you’ve spoken with people who know Hillary Clinton well. The point isn’t that she is any kind of paragon. She is simply a human being, whose friends and former staffers might also mention her flashes of impatience and temper, her wariness toward the press, her efforts to protect family privacy that can sometimes seem excessively secretive.

The question is whether major media outlets, often hostile and suspicious toward Clinton, can yet draw a fuller portrait of a candidate who is so well known; a candidate whose true character, in all its complexity, has been obscured by negative coverage for so many years; a candidate who, despite those persistent distortions, may yet make history again.

 

By: Joe Conason, Editor in Chief, Featured Post, Editors Blog, The National Memo, July 3, 2015

July 5, 2015 Posted by | Hillary Clinton, Media, Press | , , , , , , | Leave a comment

“Basically Impossible”: Chris Christie Promised To Tell It Like It Is. Here’s What That Would Actually Sound Like

In his presidential campaign announcement Tuesday, the reliably brash and blunt Chris Christie vowed that “telling like it is” would be both his campaign motto and his promise to voters.

Even for Christie, whose entire political persona is based on no-nonsense candor, consistently “telling it like it is” is basically impossible. Can you imagine if the New Jersey governor — or any of the other Republican candidates — really told it like it is about the most important issues and challenges facing America? What would that even sound like? Well, maybe something like this:

“…and that’s why I am announcing my candidacy for president of the United States! [Applause.] Thank you! Thank you! Now during my campaign, I’m going to tell it like it is. I’m going to let ‘er rip! [Applause.] Hard truths need to be spoken, and I will speak them.

‘What are these truths?’ you ask. For starters, we Republicans are way too focused on President Obama. Trust me, I’ll have a lot to say during this campaign about the president’s mistakes. Heaven knows, there’s been a lot of them. [Extended applause.] But he’s gone in a year and half. [Extended applause.]

Here’s the thing: The U.S. economy didn’t run into trouble the day Barack Obama took the oath of office. Even before the Great Recession, there were signs something wasn’t quite right. The economy grew by 4 percent annually and created 20 million new jobs during both the Reagan and Clinton booms. But in the [candidate makes air quotes] “Bush boom” of the 2000s, we couldn’t even hit 3 percent growth. And we created only about seven million jobs. Income growth was also a lot slower. I could go on and on. Productivity growth has been terrible during Obama’s Not-So-Great Recovery, but the slowdown started in 2006, when we had a Republican president. We’ve had problems with jobless recoveries and middle-income job lag since the early 1990s. Heck, the new business startup rate in this country has been falling for 30 years!

You can’t blame ObamaCare or Dodd Frank for all that. [Confused murmurs from audience.] The truth is technological automation and global competition are presenting new challenges to American workers. To meet those challenges and to turn them into opportunities means embracing new approaches, not recycling old ones. Certainly tax reform is part of the answer. I mean, we’re Republicans after all. Tax cuts are what we do. But you have to be savvy about cutting taxes when you’re already $18 trillion in the red. You need to pick your spots and get the most bang for your buck, like tax cuts and credits that boost working-class incomes — a rising tide is not lifting all boats right now — and spur business investment.

You want to do deep, across-the-board tax cuts like President Reagan did? Fine. God bless you. But keep in mind that for every percentage point you cut from those tax rates, you lose about $70 billion a year in revenue. And don’t expect to make up anywhere near that in economic growth. Even the Reagan tax cuts lost money, and the tax code was in far worse shape back then. [Unintelligible shouts from audience.] Heck, 40 percent of Americans don’t even pay income taxes.

Oh, and while we’re thinking about tax reform, keep in mind the federal tax burden will almost certainly need to rise in the future because we’ll have a lot more old folks. [Booing.] And we’ll have to pay for their pensions and healthcare. Smart entitlement and healthcare reform can reduce that tax increase — in that way it’s like a future tax cut — but it’s highly unlikely to eliminate it. Democrats need to accept that projected future benefits will need reduction, and Republicans need to accept a higher tax burden. [Extended booing.] Republicans should also be in favor of spending less money on rich people through tax breaks for homes and health insurance. [Several fist-shaking audience members stomp out.]

There’s just too much short-term thinking in this country. I mean, I’m no scientist, but we are doing something new to our planet and it hardly seems crazy to take out some insurance against a worst-case outcome. [Boos continue, get louder.] Let’s invest more in basic clean-energy research and remove regulatory barriers to more nuclear power. Maybe also eliminate the corporate income tax and replace it with a carbon tax. I note that even my friends on the Wall Street Journal editorial page said the other day that might be a good idea. And let’s not let Corporate America off the hook here. Too much short-termism there, as well, not just in Washington. Too much cash being returned to investors rather than going to fund new investment and innovation.

Now turning to foreign policy… Wait, where did everybody go?”

 

By: James Pethokoulis, The Week, July 2, 2015

July 5, 2015 Posted by | Chris Christie, Economic Growth, Economy | , , , , , , , , , | Leave a comment

“The Southern Strategy Doesn’t Work Anymore”: Rick Perry Wants To Reach Out To Black People. He’ll Have To Do A Lot Better

Yesterday, Rick Perry went to the National Press Club in Washington to deliver a speech that may have seemed unusual, in that it was characterized as an effort to reach out to African Americans, but actually contained much less than meets the eye. Perry presented traditional Republican priorities — tax cuts, regulatory rollback, slashing safety net programs — as a gift the GOP wants to bestow on African Americans and acknowledged that his party hasn’t exactly been welcoming to them. But if this is “reaching out” beyond the whites who form almost the entirety of the GOP’s voters, it isn’t going to accomplish much. Here’s an excerpt:

There has been, and there will continue to be an important and a legitimate role for the federal government in enforcing Civil Rights. Too often, we Republicans, me included, have emphasized our message on the 10th Amendment but not our message on the 14th. An Amendment, it bears reminding, that was one of the great contributions of Republican party to American life, second only to the abolition of slavery.

For too long, we Republicans have been content to lose the black vote, because we found we didn’t need it to win. But, when we gave up trying to win the support of African-Americans, we lost our moral legitimacy as the party of Lincoln, as the party of equal opportunity for all. It’s time for us, once again, to reclaim our heritage as the only party in our country founded on the principle of freedom for African-Americans.

We know what Democrats will propose in 2016, the same thing, the same things that Democrats have proposed for decades, more government spending on more government programs. And there is a proper and an important role for government assistance in keeping people on their feet. But few Presidents have done more to expand government assistance than President Obama. Today we spend nearly one trillion dollars a year on means tested antipoverty programs. And yet, black poverty remains stagnant.

Let’s be clear about one thing: The GOP didn’t “give up” trying to win the black vote. It spent decades building and maintaining electoral majorities on the encouragement and exploitation of racism. It was a sin of commission, not a sin of omission. And the reason the party is now reevaluating the “Southern strategy” isn’t that it had some kind of moral epiphany, it’s because the strategy doesn’t work anymore.

While we’re on this topic, permit me a digression on this “party of Lincoln” business, which is something Republicans say when they’re trying to convince people they aren’t actually hostile to black people. As Antonin Scalia would say, it’s pure applesauce. Here’s the truth: One hundred fifty years ago, the Republican Party was the liberal party, and the Democratic Party was the conservative party. They reversed those positions over time for a variety of reasons, but the Republicans of today are not Abraham Lincoln’s heirs. Ask yourself this: If he had been around in 1864, which side do you think Rick Perry would have been on? If you took more than half a second to answer, “The Confederacy, of course,” then you’re being way too generous to him, not to mention the overwhelming majority of his fellow Republicans.

All that isn’t to say that it’s impossible for Republicans to turn over a new leaf and truly give African Americans a reason to consider their party. But if they’re going to be at all successful, it will take both a change in policy and a change in attitude.

A change in policy, at least outside of some very specific areas, is extremely unlikely to happen. Perry discussed the issue of incarcerations related to the drug war, and that’s one example where Republicans really are coming together with Democrats to reevaluate the policies of recent decades. They deserve credit for that. But there’s almost nothing else they’re offering, other than to argue that the things they already wanted to do, such as cutting taxes, will be great for black people, too.

Then there’s the argument Perry and others make about safety net programs: that people of color are being enslaved by them, and if we only cut those shackles then they’ll rise up. This argument — that the Republican Party wants to slash the safety net only because it cares so much for the poor — has never persuaded anyone in the past, and it isn’t likely to in the future.

And what about the change in attitude? The most fundamental reason Republicans can’t get the votes of African Americans is that the party communicates to them, again and again and again, that it isn’t just ignoring their needs but is actively hostile to them. When conservative justices gut the Voting Rights Act to the cheers of Republicans, and then states such as Perry’s Texas move immediately to impose voting restrictions that they know will disproportionately affect African Americans, it sends a very clear message.

Perry began his speech with a harrowing story of a lynching in Texas in 1916, which was surely meant to convey to African Americans that he understands the legacy of racism. But it also sends an accompanying message: that he believes racism is about the violent oppression of the past and has nothing to do with the lives African Americans lead today. And that’s another message African Americans hear loud and clear. Every time any issue of race comes up, whether it’s about police mistreatment or discrimination in employment or anything else, the first response of conservatives is always to say, “Oh c’mon, what are you complaining about? Racism is over.”

If Perry really wanted to “reach out” to African Americans and convince them that something has changed, here’s a way he could do it: He could say something about the endless stream of race-baiting that comes from the most prominent conservative media figures. If you’ve listened to Rush Limbaugh or watched Bill O’Reilly, you know that one of the central themes of their programs is that white people are America’s only victimized racial group, while African Americans form a criminal class that deserves to be constantly harassed by the police because they’re a bunch of thugs the rest of us need protection from. Day in and day out, those programs’ white audiences are told that Obama is some kind of Black Panther enacting a campaign of racial vengeance upon them. “All too often I have seen this president divide us by race,” says Perry, when the media figures his party lionizes are constantly telling their audiences to see politics through the lens of their own whiteness and nurture their racial resentments.

And Perry can tell black people that it’s welfare that’s really keeping them down, but because of his party, the first African American president had to literally show his birth certificate to prove he’s a real American. That’s just one of the things it’s going to take an awful lot of reaching out to make them forget.

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line, The Washington Post, July 3, 2015

July 5, 2015 Posted by | African Americans, Republicans, Rick Perry | , , , , , , , , , | Leave a comment

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