Tom Steyer and Herb Sandler: Biggest Hypocrites in America

By: Phil Kerpen | Posted: July 22, 2014 3:55 AM
Phil Kerpen

Phil Kerpen

Liberal megadonor Tom Steyer, failing to raise any significant outside money for his global warming super-PAC, turned to one of his San Francisco neighbors for a million-dollar check. It was Herb Sandler, the subprime mortgage lender at the heart of the housing crisis, and like Steyer a huge hypocrite.

Tom Steyer made his fortune as an international coal financier while enticing investors with a tax-avoidance strategy featuring offshore shelters in the Caymans, Mauritius, and Singapore. Now he’s using that fortune to support liberal Democrats who want to hike taxes and deny hard-working Americans access to the same affordable energy resources that made him rich.

That’s a hard record of hypocrisy to top, but bringing in Herb Sandler does it.

Sandler made his fortune destroying the housing market in the United States and plunging the country into the Great Recession.

He invented a mortgage product called “Pick-a-Pay,” which allowed lenders to pay less than an interest-only payment each month, increasing their outstanding principal. In 2008 the New York Times reported it was “seen by an array of housing analysts and regulators as the Typhoid Mary of the mortgage industry.

The Times quoted California housing lawyer William J. Purdy III: “This product is the most destructive financial weapon ever deployed against the American middle class.”

Sandler didn’t just invent the product. He aggressively and deceptively marketed it. According to Time, Sandler “pushed the mortgage, which offered several ways to back-load your loan and thereby reduce your early payments, with increasing zeal and misleading advertisements.” He pocketed $2.3 billion in 2006 when he sold his toxic loan portfolio to Wachovia Bank, which caused the bank to implode.

Yet Sandler has the astonishing nerve to use his ill-gotten subprime billions to become a major political player, funding a wide array of liberal organizations that purport to stand up for regular Americans. Sandler is the principal donor of the liberal think tank Center for American Progress, the liberal faux journalism outfit ProPublica, and the obscenely misnamed Center for Responsible Lending.

Center for American Progress (CAP) has for years attacked billionaires for political giving. They do it with money from a billionaire who actually caused the subprime crisis. I was invited to CAP once to talk about their attacks on conservative donors and it didn’t go well – for them. I’ve never been invited back, but the staffer who moderated the event now works for Harry Reid.

We’ve since learned that CAP is also heavily funded by the health insurance industry while they lobby for Obamacare, which lavishly subsidizes insurers and forces Americans to buy their products.

Yet that arouses no concern from the “reporters” working for Herb Sandler at ProPublica, who are supposedly nonpartisan but spend a lot of time and effort attacking conservative donors and operatives. Newspapers frequently run their stories without any explanation of who ProPublica is or that its founder is a subprime kingpin.

Worst of all is the so-called Center for Responsible Lending, a group Sandler started with another subprime lender, Martin Eakes. That group is the principal cheerleader for the Obama administration’s Operation Choke Point.

According to former FDIC chairman William Isaac: “Operation Choke Point is one of the most dangerous programs I have experienced in my 45 years of service as a bank regulator, bank attorney and consultant, and bank board member. Operating without legal authority and guided by a political agenda, unelected officials at the DOJ are discouraging banks from providing basic banking services -- deposit accounts, payments processing services, and payroll accounts – to lawful businesses simply because they don’t like them. Bankers are being cowed into submission by an oppressive regulatory regime.”

Could anything be more hypocritical than using money from Herb Sandler to shut off financing from lawful businesses deemed undesirable?

I can think of one thing: San Francisco billionaires Tom Steyer and Herb Sandler funding a super-PAC that attacks conservatives just for trying to keep energy affordable for regular Americans.

Phil Kerpen is president of American Commitment. He is a free-market policy analyst and advocate in Washington. This commentary is reprinted with his permission.


Tags: News, Columns

Comments (1)

3:36PM JUL 22ND 2014
What incredible corporate political spin! And straight from the mouths of the Koch Boys, "...Steyer is fast drawing the ire of the political landscape's resident oil-money billionaires, the Koch brothers." (Slate, July 14. 2-14)

Conservatives are not trying to keep energy affordable for regular Americans, they are doing what they whole-heartedly believe in – protecting the free enterprise system by supporting polluting, American-killing corporations.

It is ridiculous to call a person a hypocrite for changing his mind about an issue when he is forthright about his past and new path. Should we likewise rebuke the millions of reformed alcoholics?

Like millions of Americans, including a few Republicans, Steyer simply wised up as the mounting science overwhelming supported the actuality of man-made global warming. Steyer in Politico, July 14, 2014: “…it’s true—Farallon did make fossil fuel investments under my watch. But the more I learned about the energy and climate problems we currently face, the more I realized I had to change my life. I concluded that the best way to align my work with my beliefs was to make a real change—leaving my role managing a firm with investments across the industrial spectrum, and instead joining in the global effort to find a solution to climate change once and for all.”

In 2010, Steyer signed the Giving Pledge along with Bill Gates, to donate half his fortune to charity. Does this sound like a hypocrite?

I sure hope Mr. Kerpen doesn’t consider himself a legitimate journalists, pushing the Koch’s talking points, and purposefully mischaracterizing as ‘hiking taxes and denying hard-working Americans access to affordable energy,’ the Obama administration’s attempts to reign in pollution that is killing Americans along with our environment. The NYT reported as far back as 2012 that a new study of public opinion found that people are in fact willing to pay more for cleaner energy. Further, researchers at Harvard and Yale, analyzing a survey they conducted found that the average United States citizen was willing to pay $162 a year more to support a national policy requiring 80 percent “clean” energy by 2035.”
How can anyone in good conscience disparage people who want to use their money to protect the public health?

In a recent report, the American Lung Association found that, “Particle pollution from [coal-burning] power plants is estimated to kill approximately 13,000 people a year.” (“Toxic Air: The Case For Cleaning Up Coal-Fired Power Plants,”)

Whatever this has to do with Steyer’s philanthropy, Kerpen writes about Operation Choke Point as if it is a secret plot to kill private enterprise and the free market, quoting Issac, “…unelected officials at the DOJ are discouraging banks from providing basic banking services…to lawful businesses simply because they don’t like them.”

Poppycock! These “lawful businesses” targeted by DOJ include credit card schemes, credit repair services, dating services, debt consolidation scams, drug paraphernalia, escort services, get rich products, selling others personal info, pay day loans, Ponzi schemes, pyramid-type sales, racists materials, telemarketing sales, etc. (Bizzy Blog, May 2, 2014). I say more power to the DOJ for coming down on these bastions of private enterprise.

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