Bank Whistleblowers United Issues Challenge To Presidential Candidates

NEWS ADVISORY
For Immediate Release to News Desks, Assignment Editors, Bookers and Reporters
Contact: Isaiah J. Poole, news@ourfuture.org, (202) 955-5665

WASHINGTON – Four prominent Wall Street whistleblowers – who have identified high-level wrongdoing by the nation’s largest financial institutions and the federal government – will announce on Thursday a challenge to the 2016 presidential candidates to pledge specific, common-sense actions to curb the financial sector’s corrupting influence on political campaigns and government regulators. They have proposed a detailed plan that requires no new legislation or rulemaking to restore the rule of law to Wall Street, end too-big-to-fail and restore the best features of the Glass-Steagall law that used to govern bank activities.

The four – William K. Black, Gary J. Aguirre, Richard Bowen and Michael Winston – have formed a new initiative called Bank Whistleblowers United. They will appear together at a news conference at 10 a.m. Thursday, February 25 hosted by the Campaign for America’s Future at its headquarters, 1825 K Street NW, Suite 400.

Bank Whistleblowers United has as its goal “to create urgent, fundamental changes to break Wall Street’s power over our economy and our democracy,” says Black, an associate professor of Economics and Law at the University of Missouri and a central player in exposing the “Keating Five” savings-and-loan scandal in 1989.

With the political power of the banking sector, and questions concerning over which candidates are likely to be beholden to that power, emerging as central issues in the 2016 presidential campaign, Bank Whistleblowers United will on Thursday unveil a pledge that it will ask each of the presidential candidates to sign. The pledge will include a vow to not accept campaign contributions from those banking institutions and executives engaged in fraudulent behavior during the runup to the 2008 financial crisis. They will also answer questions about why that pledge is important in the context of what has happened in the five years since the Dodd-Frank financial reforms were signed into law.

Brief bios of each of the founding members of Bank Whistleblowers United follow this advisory.

WHAT: Bank Whistleblowers United news conference
Featuring Gary J. Aguirre, William K. Black, Richard Bowen and Michael Winston

WHEN: 10 A.M. Thursday, February 25, 2016.

WHERE: Campaign for America’s Future
1825 K Street NW, Suite 400
Note: Reporters who cannot attend in person can participate by calling
(202) 955-5665, ext. 7099.

Members of Bank Whistleblowers United

Gary J. Aguirre is best known as the Securities and Exchange Commission attorney who, while heading an insider trading investigation of Pequot Capital Management, formerly the world’s largest hedge fund, resisted his supervisor’s demands to give preferential treatment to a Wall Street titan involved in the case. Fired for his so-called “insubordination,” Aguirre would prove to the satisfaction of two Senate committees, a federal court and three federal agencies that the SEC had acted unlawfully. In private practice, Aguirre represents whistleblowers and victims of securities fraud and market abuse. He has law degrees from U.C. Berkeley and Georgetown Law Center (LL.M.) and a master in Fine Arts (Film) from UCLA.

William K. Black is an associate professor of economics and law at the University of Missouri – Kansas City (UMKC) and the Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota Law School. He is a white-collar criminologist. He rose to national prominence as a key figure exposing the “Keating Five” savings-and-loan scandal in 1989, in which five U.S. senators were found to have been involved in negotiating favors for Charles H. Keating, Jr., chairman of the Lincoln Savings and Loan Association, in exchange for campaign contributions. His subsequent book, “The Best Way to Rob a Bank is to Own One,” is considered a classic analysis of corrupting influence of Wall Street on the federal government.

Richard Bowen is the Citigroup whistleblower who repeatedly warned Citi executive management, beginning in 2006, about potential losses related to the purchase and sale of mortgage loans. He provided testimony, along with 1,000 pages of documents, to the Securities and Exchange Commission in July 2008, three months before the bank bailouts. He also gave nationally-televised testimony before the Financial Crisis Inquiry Commission in April 2010. A “60 Minutes” story profiling Bowen, “Prosecuting Wall Street,” has been aired multiple times on CBS and CNBC. He is currently a professor of accounting at the University of Texas at Dallas and a popular speaker in the field of business ethics (www.RichardMBowen.com).

Michael Winston was a high-ranking executive at Countrywide Financial who tried to stop the fraud, corruption and deception he observed at the mortgage lender. His warnings were dismissed or ignored by management, and he was eventually fired. He subsequently took Countrywide and Bank of America to court, winning what the trial judge called an “overwhelming” jury verdict. Though the verdict was later thrown out by an appeals court, Winston’s legal fight was favorably chronicled by New York Times columnist Gretchen Morgenson in the article, “How A Whistleblower Conquered Countrywide.” Winston has served as Distinguished Adjunct Professor at Stichting deBaak (The Netherlands) for 16 years.

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Progressive Scorecard Highlights Policy Gap Between Clinton and Sanders

Clinton’s weakness on Wall Street reform, intervention and military spending could explain difficulty in engaging the party’s activists

LISTEN: Teleconference on the Populism 2015 Candidate Scorecard featuring Robert Borosage of the Campaign for America’s Future and Celinda Lake of Lake Research Partners.

Washington, D.C., October 8, 2015 – The Campaign for America’s Future, a progressive center of research and action, today released its Populism 2015 Candidate Scorecard, rating the Democratic presidential candidates.

Bernie Sanders leads the field in the scorecard, with Martin O’Malley and Hillary Clinton trailing close behind. Lincoln Chafee and Jim Webb lag farther behind, largely because their campaigns have yet to detail their platforms.

“This is a unique tool for progressives. We only awarded points for concrete, current policy proposals that address the nation’s most urgent problems,” said Robert Borosage, co-director of CAF.

Clinton scored well on many issues, particularly on immigration and education. Her score was bolstered when she announced her opposition Wednesday to the Trans-Pacific Partnership. However, she lags behind Sanders for weak or nonexistent plans to create more affordable housing and cut defense spending. She opposes breaking up the big banks, reviving the Glass-Steagall limits on financial institutions and imposing a financial transaction tax.

What the scorecard demonstrates, however, is less the gap between Sanders and Clinton than the extent to which all of the major Democratic contenders have pushed populist economic reforms.

All three leading candidates have plans to raise taxes on the rich, make corporations pay their fair share and limit the capital gains tax breaks for investors. All support an increased federal minimum wage, paid family leave and curbing the role of big money in politics.

“These reforms – on money and politics, on trade, on progressive tax reforms, on taking on Wall Street – are popular with most Americans, but unpopular among elites. Finally, candidates are getting that message,” said Celinda Lake, president of Lake Research Partners.

The scorecard measured candidates against the Populism 2015 platform released earlier this year by the Campaign for America’s Future, National People’s Action, the Alliance for a Just Society, Working America and the Working Families Party.

Together, these organizations represent over 2 million members, with chapters in 18 states.

The scorecard, available at candidatescorecard.net, is being distributed by email and in a national online advertising effort ahead of the first presidential debate.

It will be updated frequently thereafter. Activists will be pressing candidates on their positions in the lead up to the early primaries.

Statement of Robert Borosage on the Populism 2015 Candidate Scorecard

Today, the Campaign for America’s Future is releasing its Candidates Scorecard, which scores Democratic candidates on a core populist agenda. For those of you at your computers or phones, it is available at candidatescorecard.net.

Not surprisingly, Bernie Sanders gains the highest scores of the field, with Martin O’Malley second and Hillary Clinton a close third. Lincoln Chafee and Jim Webb lag far behind, largely because their campaigns have not begun to fill out their platforms.

Sanders lead is built on his clear support for major reforms – on breaking up the big banks, Medicare for All, enhancing Social Security benefits, taking on climate change, curbing big money in politics, cutting military spending and opposing costly interventions abroad.

Clinton scored well on many issues, particularly on election reform, immigration and criminal justice reform. Her recent opposition to the Trans Pacific Partnership bolstered her score. On housing and nutrition programs, her scores will rise as she elaborates her platform.

That Sanders leads the others was to be expected, but most striking is the extent to which all the major candidates have endorsed populist economic and political reforms. All three leading candidates have plans to raise taxes on the rich, crack down on corporate tax havens and loopholes, and limit capital gains tax breaks for investors. All support raising the minimum wage, paid family leave and paid vacation, and empowering workers to organize and bargain collectively. All call for curbing the role of big money in politics. All favor action on climate change and a larger public investment in infrastructure and R&D. The contrast with the Republican field is stark and clear.

The growing populist movement in this country is driving this debate. The Sanders surge reflects that. But so does the movement of mainstream politicians – Hillary Clinton and Martin O’Malley – to embrace bolder populist political and economic reforms. All of these candidates accept the reality that this economy is working only for the few. And that isn’t an accident or an act of nature. It is because the rules have been rigged and the deck is stacked against most Americans. And that has to change.

Let me say a word about the scorecard. It measures candidates against the Populism 2015 platform released earlier this year, before the campaign began, by the Campaign for America’s Future, National People’s Action, the Alliance for a Just Society, Working America and the Working Families Party. Together, these organizations represent over 2 million members, and nearly 1,000 organizers, with chapters in 20 states.

The scorecard provides a unique, user-friendly resource. We award points for concrete, current policy proposals that address the nation’s most urgent problems. In each area, we describe the criteria and then provide links to each candidate’s appropriate speech or platform item, providing a handy resource for reporters, bloggers, activists and interested citizens.

The scorecard, available at candidateascorecard.net, is being distributed by email and in a national online advertising effort ahead of the first presidential debate.

It will be updated frequently thereafter. Activists will be pressing candidates on their positions in the lead up to the early primaries. And scores will change as candidates continue to elaborate their platforms.

State of the Union Response: Right Direction, But Bolder Reforms Needed

WASHINGTON – President Obama’s State of the Union speech on Tuesday night framed the right questions for what America’s working families need in today’s economy, but he stopped short of the bold reforms needed to undo the rigging of the economy to benefit the few, Campaign for America’s Future co-director Robert Borosage said in his response today.

“Obama focused the speech about values and direction, not on programs,” he wrote in his article, published this morning on OurFuture.org. “This made the choices clear – and neatly closeted the reality that many of the programs are gestures, not near the scope needed to deal with the problem addressed.”

While President Obama offered several proposals that are vital for working-class people, Borosage wrote that “the real question is that posed by Sen. Elizabeth Warren: What happens when the rules are rigged to benefit the few? We may all play by the same set of rules but find that the deck has been stacked. Changing the rules requires taking on big money and entrenched interests – and here the president largely takes a pass.”

“Progressives should applaud the president’s combative populist message,” Borosage wrote. “But while the president frames the argument well, making this economy work for working people once more will take far bolder reforms” – and a populist progressive movement mobilized to press for those reforms.

The article, “President Obama Gets His Swagger Back: The Scope and Limits of His State of the Union Address,” is reprinted in full below and can also be accessed at http://ourfuture.org/20150121/president-obama-gets-his-swagger-back-the-scope-and-limits-of-the-sotu.

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President Obama has his swagger back. Ignoring the electoral rebuke of 2014, he claimed the growing economy as a mandate for his progressive agenda, delivering a State of the Union address bristling with veto threats and challenging the Congress to stand with working families.

The speech was designed to rouse Obama’s popular majority coalition against the Republican congressional majority. While it ended with a long, soaring peroration about “one America,” in Obama’s signature voice, the speech itself threw down a gauntlet at Republicans, inviting a debate about direction that will frame the 2016 election. It presented a president willing to compromise but ready to fight.

To that end, Obama focused the speech about values and direction, not on programs. This made the choices clear – and neatly closeted the reality that many of the programs are gestures, not near the scope needed to deal with the problem addressed.

“The era of big government is over” is over. President Obama defended activist government on the side of working people. There was no rhetorical tacking to the conservative winds, in contrast to Bill Clinton. Obama wants his administration to mark the end of the conservative era that began with Reagan and the beginning of a new era of reform.

His reforms are grounded in the center-left establishment consensus, now dubbed “middle-class economics.” The rhetoric echoes Clinton: “the idea that this country does best when everyone gets their fair shot, everyone does their fair share, everyone plays by the same set of rules.” If she runs, Hillary will have no problem carrying this argument.

But the real question is that posed by Sen. Elizabeth Warren: What happens when the rules are rigged to benefit the few? We may all play by the same set of rules but find that the deck has been stacked. Changing the rules requires taking on big money and entrenched interests – and here the president largely takes a pass.

The Wage Initiative

The most popular part of the speech will surely be what the Economic Policy Institute dubs the president’s wage initiative. He calls for raising the minimum wage, pay equity, paid sick days, revival of overtime protections, tax credits for more affordable child care. These are vital reforms for low-wage workers; all enjoy support of two-thirds or more of the American people. If the Republican Congress blocks them, as seems likely, they can be driven forward in blue states and big cities, and by procurement reform at the national level.

Yet for wages to rise across the board, we need a full employment economy that makes workers, not jobs, scarce. We need to empower workers to organize unions and bargain collectively. And we need to reform perverse executive compensation policies that give corporate CEOs multimillion-dollar personal incentives to cook the books, ship jobs abroad, suppress wages, and plunder their own companies for short-term returns. The president heroically assumes that full employment is on its way. And while he mentions the need for unions, he does so wistfully: “We still need laws that strengthen rather than weaken unions, and give American workers a voice.” And the notion that more employers might “see beyond the next quarter’s returns” is but a forlorn hope.

Invest and Tax

The speech also makes a muscular case for public investment – in 21st-century infrastructure, in research and development, in new energy, in education and training to create a skilled workforce. (The need for an informed democratic citizenry goes unmentioned.) The president calls for making two years of community college free, and for lowering debt burdens for college students.

To pay for this, the president issues his most populist – and most popular – challenge:

”For far too long, lobbyists have rigged the tax code with loopholes that let some corporations pay nothing while others pay full freight. They’ve riddled it with giveaways that the super rich don’t need, while denying a break to middle-class families who do.

..Let’s close loopholes so we stop rewarding companies that keep profits abroad, and reward those that invest in America. (APPLAUSE) Let’s use those savings to rebuild our infrastructure and make it more attractive for companies to bring jobs home.

And let’s close the loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth. We can use that money to help more families pay for childcare and send their kids to college.”

This argument — on the need for public investment paid for by progressive tax reform – is vital to our country’s future. And it is politically potent – putting Republicans in the position of starving vital investments to protect tax breaks for the powerful. The president’s bold position should be applauded, even if the actual spending he calls for doesn’t come close to closing the growing investment needs.

The Missing New Foundation

President Obama claims a new foundation for the economy, based upon a revival of manufacturing, rising exports, energy independence, higher test scores and graduation rates, a reformed Wall Street.

But the claim is mocked by the reality. The president’s reforms that address the rigged rules and distorted structure of our economy are largely in place. Yet, trade deficits are back, with the deficit with China unprecedented in the annals of history. We haven’t regained the manufacturing jobs lost in the crash, much less those lost the decade before. The big banks are bigger and more concentrated than ever – still too big to fail, too big to jail and too big to manage. CEO pay continues to soar, while workers wages stagnate.

And in his call for renewing fast-track trade authority – to grease the skids for passing potential trade treaties with Asian and European countries – the president is doubling down on the failed policies of the past. Ironically, this is the one area where he will gain bipartisan support, with the leaders of both parties arrayed with multinational banks and corporations in support.

The president’s case for fast track was particularly disingenuous, a retread of the false promises of the past accords. “95 percent of the world’s customers live outside our borders.” No, 95 percent of the world’s population does; customers are people with money, and far more concentrated. “China wants to write the rules” in Asia. No, while Asian countries are imitating China’s model of trampling trade rules; they are threatened, not entranced, by their increasingly assertive giant neighbor. An agreement designed to make Vietnam an alternative source of low-cost labor for American corporations while protecting investors with their own private legal system is hardly a deal to “benefit American workers.” The claim that this administration has cracked down on currency and trade violations is risible.

Absent also from the speech is any discussion of limiting the role of big money in politics or cleaning up the corruption of Washington and the Congress. For a president once willing to challenge the Supreme Court to its face over Citizen’s United, the omission is telling. We’ll fight over climate change, raising the floor under workers, basic worker protections, investing in the future. But big money and the core structural rules stacked against working families aren’t yet on the agenda.

The Foreign Policy Vision

President Obama’s presentation of his foreign policy offered a similarly stark contrast between his vision and his policy. He has been the leading advocate for ending the war on terror, for removing U.S. troops from Iraq and Afghanistan, for reasserting our values and protecting our Constitution in an age of terror. He makes a strong case for smart diplomacy rather than bluster and military adventure. His opening to Cuba, insistence on negotiations with Iran, and increasing caution in the face-off with Russia all exemplify his vision in action. His call once more to close Guantanamo in the face of congressional cowardice is admirable. He is the anti-Bush, with Hillary positioning herself to his right.

Yet at the same time, troops are returning to Iraq in the fight against ISIS. We remain engaged in Afghanistan. Drones and hit squads hunt terrorists in nations across the globe. The president has asserted unprecedented prerogatives to surveil, arrest, detain, even kill people – including citizens – on his own authority. His administration has protected intelligence officers who lie to Congress while hunting whistle blowers to expose the truth to Americans. Perhaps he can use the last two years to continue to bring his practice in line with his sensible vision.

Progressives should applaud the president’s combative populist message. We should challenge the Republican Congress that stands in the way. We should be pushing various parts of the wage initiative and the public investment agenda at the state and local level.

President Obama will end as the most liberal president since Nixon, if not Johnson. But while the president frames the argument well, making this economy work for working people once more will take far bolder reforms. His years may mark the beginning of a new era of progressive reform, but only if people in motion force the argument.

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