Nov 18, 2011 7:19 PM GMT
Though it should be made clear that it's not just the Democrats who have gained - but it looks like they may have ended gaining the most - which is particularly inconsistent with their supposed world views.
Ethics: As Democrats demonize Wall Street CEOs as the "greedy" fiends of the financial crisis, they've lined their own pockets — both before and after the crisis. Nancy Pelosi's just the latest example.
The former House speaker allegedly gamed financial reforms to boost her personal stock portfolio. The brewing scandal is complicated, but here's the Reader's Digest version:
After a Pelosi staffer left to lobby on behalf of credit-card giant Visa, Pelosi delayed bringing to the House floor a bill to end lucrative "swipe fees" for Visa and other credit providers.
The bill couldn't have come at a worse time for Visa. It planned to launch an $18 billion public stock offering, so stalling Hill action became a priority. The San Francisco-based company curried favor with Pelosi by pumping cash into her re-election efforts, earning its CEO a rare one-on-one meeting with the speaker.
At the same time, Visa offered her husband a VIP cut of the IPO. Paul Pelosi jumped at the offer, buying 5,000 shares at the $44 initial price. In a couple of days, the shares soared to $64. Pelosi later bought 15,000 more, raising the total value of his investment to about $5 million. In the end, the legislation Visa fought starting in 2007 was forestalled two full years.
Publicly, Nancy Pelosi has been a frequent critic of the financial industry. The commission she impaneled in 2009 to investigate the root causes of the crisis summarily indicted Wall Street honchos, while exonerating guilty Democrats, including several who had their hands in the subprime pot. Among them:
Franklin Raines, Fannie Mae's CEO through 2005, who helped plunge the government-sponsored mortgage giant into the subprime abyss, while cooking Fannie's books to score fatter bonuses for himself and other Clinton Democrats on its board. Despite holding 20 hearings and 700 interviews, Pelosi's commission never found room for Raines on the witness list. One of the prime suspects in the crisis got off scot-free.
Henry Cisneros, Clinton's housing chief who strong-armed Countrywide Financial into signing "fair lending" contracts that exposed it to billions in risky subprime loans. Cisneros later joined Countrywide's board. (Pelosi's son also worked for Countrywide.)
Rahm Emanuel, who served on Freddie Mac's board, where he pocketed $320,000 before making millions working for an investment banker in Chicago that brokered high-cost subprime loans to minorities.
Barney Frank, who was one of Fannie's and Freddie's biggest protectors — and beneficiaries of their political donations — on Capitol Hill. Frank landed a plum Fannie job for his gay partner, Herb Moses, whose work involved relaxing Fannie's restrictions on home loans. Frank previously led the House committee charged with oversight of Fannie, which also gave at least $25,000 to Frank's mother's charity in Boston. His glaring conflicts of interest were never investigated.