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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

“Bobby Jindal, Crony Capitalist”: Giving A Whole New Meaning To The Term “Corporate Welfare”

As much as I hate entertainment tax credit programs, and as obsessed as I’ve become with the bottomless well of opportunism known as Bobby Jindal, you’d think I would have guessed at the cash nexus underlying the prize endorsement of the Lousiana governor’s proto-presidential candidacy by Duck Dynasty star Willie Robertson. But afraid it took a report from Bloomberg Politics‘ Margaret Newkirk to get me to see the connection:

Louisiana Governor Bobby Jindal, a potential Republican presidential candidate, is trying to close a $1.6 billion budget hole without touching as much as $415,000 per episode in tax breaks that may be due to “Duck Dynasty.”

The A&E television reality show takes part in the nation’s most generous entertainment-tax credit program. Jindal is proposing no changes, arguing that reducing such breaks is tantamount to raising taxes. The state approves enough incentives each year to make up at least $200 million in proposed cuts that led Louisiana State University to say that it may plan for insolvency….

Louisiana, which was the site of the most English-language film productions in the U.S. in 2013, pioneered movie credits, approving the program in 2002. All but 13 states now have such programs, according to Film Production Capital, a New Orleans firm that brokers credits….

Feeding Time Productions LLC, which produces [Duck Dynasty], has submitted expenses for its first four seasons that would qualify it for $11 million in credits once approved, according to state data. That includes $4.6 million for the fourth season, or $415,000 per episode. None have yet been certified.

Louisiana offers movie makers credits for 30 percent of in-state spending and allows them to be sold to brokers.

Film-production companies set up as limited liability companies don’t owe corporate taxes in Louisiana. Most therefore sell their credits to someone that does. They are also allowed to sell them back to the state for 85 cents on the dollar.

That’s right: it’s not enough for Louisiana to let film and TV production companies eliminate their state tax liabilities; the state gives them “transferable” tax credits that can be sold on special markets to companies that do have tax liability, and if that fails the state will buy them back. So this is the corporate version of the “refundable tax credits” poor people get via the EITC.

This makes me kind of ill as an abstract matter, and gives a whole new meaning to the term “corporate welfare.” But it’s especially egregious in a state like Louisiana, with a horrendous budget shortfall, and even violates Jindal’s own principle that cutting back on refundable tax credits (e.g., credits from the business inventory tax) doesn’t violate his no-tax-increase pledge.

I’m not saying Bobby’s taking this inconsistent and politically damaging position strictly out of solicitude for Duck Dynasty; he’s slippery enough that there are usually multiple reasons for every objectionable thing he does. But on the other hand, when Mike Huckabee was going out of his way to pander to the Robertsons in his recent book, he didn’t have tax credits to hand them either, did he?

 

By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, May 4, 2015

May 6, 2015 Posted by | Bobby Jindal, Corporate Welfare, Tax Cuts | , , , , , , | Leave a comment

“Huckabee Is Ted Cruz’s Nightmare”: Playing Both Sides Of The Ball

The Upshot’’s Nate Cohn is making the contrarian case for Mike Huckabee. I give him credit for seeing things that others might not, but—despite the optimistic headline: “Mike Huckabee Would Be a More Important Candidate Than You Might Think,” he actually underestimates Huck’s potential as a disruptive factor in this campaign.

It’s unclear what’s in the water in Hope, Arkansas, but that Bill Clinton and Huck are both from the same hamlet is nothing short of miraculous. Put aside the snake oil salesman stuff, and the numerous ridiculous things Huckabee has said to get attention, and you’re left with a man who is essentially the love child of Clinton and Ronald Reagan. I recently argued that only the great politicians like The Gipper and Bubba can oscillate between indignation and compassion. Well, guess what: Huckabee can do both, too. This is a guy who’s so compelling he actually got Jon Stewart to question his own abortion stance.

“I’m a conservative; I’m just not mad about it,” he often quips. Except he can be mad about it—or feign anger, at least. So he can play the reasonable conservative or he can hurl red meat. As they say in football, he can play both sides of the ball. In 2008, Huckabee came out of nowhere to wow us in the debates. The competition will be stiffer this time around, but he can do it again.

The fact that Huckabee is a good communicator—and that he can appeal to evangelical Christians, a hugely important constituency in Iowa—is not exactly the most novel observation. But I think there are two additional things Huckabee has going for him that are not as widely appreciated.

The first is that he spent the last several years as a Fox News host. Now, let’s be honest: It’s unlikely that many people reading this have ever watched Huckabee’s Saturday night show—except to see if he was going to announce for president (or for purely ironic purposes). And I’m not even suggesting you were watching Girls instead. A lot of us who watch Fox shows like Special Report wouldn’t think to turn on Huckabee.

But millions of Americans did watch his show—and guess what? Many of these same Americans will vote in Republican primaries. I think we probably underestimate the impact of hosting a weekly show on Fox News.

Lastly, though, I think there is a huge underserved constituency in the GOP—and that constituency is what might best be termed populist conservatives. These folks tend to be white and working-class and who feel they’ve been left behind in America. They are culturally conservative—but they also want to keep government out of their Medicare.

Mitt Romney was arguably the worst candidate Republicans could have ever nominated to appeal to this constituency. But while candidates like Huckabee and Rick Santorum flirted with going full populist, something always seemed to keep them from really doubling down on it.

One can only assume this is because there is a ceiling on how much populist demagoguery one is permitted to dole out—and still remain a Republican in good standing. There’s a fine line between attacking the “fat cats” and engaging in class warfare, and one doesn’t want to get on the wrong side of that line. But having cashed in, and now finding himself in his post-radio, and possibly post-TV phase, Huckabee might well decide it’s time to throw caution to the wind.

Don’t get me wrong: As a free market conservative, this brand of populism isn’t my cup of tea. Nor do I think Huckabee can win the nomination. He’s always lacked money and organization, and that won’t change. But as a political observer, I can’t help but suspect that there is a huge opening for a conservative candidate willing to be the working man’s conservative.

The last time someone really tried this was when “Pitchfork” Pat Buchanan, and then Ross Perot, ran in 1992. It resonated then, but that was before the “giant sucking sound” really kicked in. Whether it’s globalization or immigration—or whatever “-ation” might have taken your job—it stands to reason that the same grassroots phenomenon that helped Buchanan and Perot tap into an underserved constituency might be even more potent today.

Already known as a tax-and-spender, Mike Huckabee isn’t soon going to win over Steve Forbes or Larry Kudlow or The Club for Growth, so why try? There are tons of Americans out there listening to country radio, clinging to God and guns…and government.

The other day, when New Jersey Governor Chris Christie proposed some fairly modest reforms to save social security (means testing and raising the retirement age to 69), ostensibly conservative readers weighed in against it on the Facebook page of the Daily Caller, where I work.

“I’m entitled to social security because it’s MY money that I have given to the govt since I was 16 years old with the PROMISE I would get it back when I was older. FU Christie.” Yes, this is anecdotal—but this comment was also representative of a lot of comments on that particular post. A lot of conservatives appear to believe there is some lockbox where “their” money is being saved for their retirement.

A few days later came this headline from the Weekly Standard: “Huckabee Bashes Republican Plans to Reform Medicare and Social Security.” As Huckabee himself told The Daily Beast over the weekend, “I’m getting slammed by some in the GOP ruling class for thinking it wrong to involuntarily take money from people’s paychecks for 50 years and then not keep the promise government made.”

Some of the same underlying trends behind the excitement over Elizabeth Warren are present, if dormant, on the right. So how can Huckabee break away from the pack? Most free market conservatives I know agree that “crony capitalism” is a problem. This has become boilerplate language you can expect from everyone from Marco Rubio to Ted Cruz, and it’s a kind of flirting with populism.

But Huckabee appears poised to do what no other Republican will have the ability or the inclination to do—and that is to go full populist in a way that acknowledges the fact that a lot of folks need the government’s help, that resents the fact that the game has been rigged by the rich and the corporations, yet still embraces a culturally conservative lifestyle. This will provoke serious pushback from the libertarian and pro-business wings of the conservative coalition. But if he does it—if he sticks to it—out there in the hinterland, there’ll be a market for it.

Get your pitchforks ready.

 

By: Matt Lewis, The Daily Beast, April 21, 2015; Editor’s note: Matt Lewis’s wife previously consulted for Ted Cruz’s senate campaign, and currently consults for RickPAC, the leadership PAC affiliated with Rick Perry.

April 22, 2015 Posted by | GOP Presidential Candidates, Mike Huckabee, Ted Cruz | , , , , , , | Leave a comment

“So, Who’s Getting The Gigs?”: When The GOP Goes On A ‘Hiring Spree’

If you want to know where Congress is headed, it obviously makes sense to take a close look at elected lawmakers themselves.  But to understand how they intend to get there, you’ll need to understand who they’re hiring.

As Republicans get ready to take complete control of Capitol Hill, GOP officials are going on a “hiring spree,” especially in the Senate, where the new majority will have expanded staffs at both the leadership and committee level.

So, who’s getting the gigs? We can break them down into two broad groups of people. The first, as Anna Palmer reported the other day, are corporate lobbyists.

Lobbyists can come home again.

As Republicans take control of Congress, they are bringing in veteran influence peddlers to help them run the show. Nearly a dozen veteran K Streeters have been named as top staffers to GOP leaders or on key committees as lawmakers prepare to take the gavel in January.

And why would lobbyists leave better-paying jobs at K Street firms in order to tackle unglamorous work on Capitol Hill? Because as any good lobbyist knows, they can, when they’re done with their congressional work, return to K Street and demand even more money.

In the meantime, the line between corporate lobbyists and congressional Republicans has long been blurry, but the partnership will now be even stronger as the GOP takes over the Senate for the first time in eight years.

But they’re not the only ones getting new gigs in Congress. The other group includes Heritage Action staffers.

Heritage Action for America is losing three staffers, including its top House lobbyist, to a trio of newbies in the 114th Congress. […]

“One of the great roles of having a permanent 300-person institution is that people take what they learn here and spread that throughout the universe,” said Heritage Action for America’s CEO Michael Needham.

Depending on one’s perspective, that’s either very nice or very scary.

Regardless, taken together, staffing moves like these tell us something interesting about who’ll be doing the legislative legwork for the next couple of years.

 

By: Steve Benen, The Maddow Blog, December 22, 2014

December 24, 2014 Posted by | Congress, GOP, Jobs | , , , , , | Leave a comment

“Elizabeth Warren’s Real And Imaginary Appeal”: The Trap Of The ‘Hidden Majority’ Is Too Often ‘Fools Gold’

Friday night on the floor of the U.S. Senate as part of a doomed effort no one is much paying attention to is not the ideal context for a Big, Memorable Speech. But the excerpts of Elizabeth Warren’s speech against the Wall Street derivatives swap language of the Cromnibus touted by Miles Mogulescu at HuffPost are indeed pretty powerful, though again, comparing them to Obama’s 2004 Democratic Convention speech viewed live by a big chunk of the politically active population seems more than a bit of a stretch.

If, however, Warren keeps this up, she could very quickly make herself the kind of big public figure she has long been to smaller circles of progressive activists. What’s most interesting about her speech is that she placed as great an emphasis on Wall Street influence in the Obama administration Treasury Department as she did on the legislative provisions in the Cromnibus. She’s pulling no punches. And not only does this indicate she will go to the mats to stop the nomination of Antonio Weiss to a top position at Treasury–a fight she looks likely to win–but that she’s launching a broad challenge to the acceptability of any recent Wall Street vets in the ranks of Democratic executive branch officials or advisors. This represents a clear collision course with the administration, and with Hillary Rodham Clinton (Warren’s constant references to Citi in her speech–so closely identified with the key Clintonian advisory Robert Rubin–could not be a coincidence), even if Warren’s public disavowals of interest in a primary challenge to Clinton represent an unshakable private conviction. You could see, say, Bernie Sanders taking up the banner of a primary challenge with Warren playing a key role in the background whether or not she’s formally in the insurgent camp.

Mogolescu, however, probably reflects the views of a lot of Warren’s fans in thinking that she and only she can topple Clinton, but that she can also put together the transformative super-partisan coalition that progressives once thought Barack Obama might spearhead:

It [Warren’s speech] transformed the conventional wisdom about American politics that the main divide is between left, right, and center, when it is really between pro-corporate and anti-corporate. Her declaration that neither Democrats nor Republicans (meaning the voters, not the Washington politicians) don’t like bank bailouts rings loud and true. Tea party supporters don’t like bailouts and crony capitalism any more that progressives do.

I’m afraid we need to call B.S. on this idea of Elizabeth Warren (or any other “populist) becoming a pied piper to the Tea Folk, pulling them across the barricades to support The Good Fight against “crony capitalism.” Yes, many “constitutional conservatives” oppose corporate bailouts. But they also typically support eliminating not just subsidies but regulation of big banks and other corporations; oppose most if not all of the social safety net (and certainly its expansion); and also oppose legalized abortion and marriage equality, for that matter. It’s not even all that clear that Warren-style “populism” will improve Democratic prospects with the white working class, which harbors a host of grievances with the traditional liberalism that Warren embraces beyond her signature financial “issues.”

To most Democrats most of the time, Warren is raising important and legitimate concerns about Wall Street that must be addressed, not just dismissed as “class warfare.” To some Democrats some of the time, she represents a decisive break with the Clinton and Obama traditions that is morally necessary. But let’s don’t pretend there’s a slam-dunk “electability” case for this kind of politics. Yes, the “median voter theorem” of politics that dictates a perpetual “move to the center” by general election candidates has lost a lot of its power just in the last few years. But the countervailing “hidden majority” argument for more ideological politicians of the left and the right is hardly self-evident, and has in the past often been fool’s gold.

 

By: Ed Kilgore, Contributing Writer, Political Animal, The Washington Monthly, December 15, 2014

December 16, 2014 Posted by | Elizabeth Warren, Politics, Progressives | , , , , , , , | 2 Comments

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