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 hes 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.
Thats 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 didnt 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 didnt go well for them. Ive never been invited back, but the staffer who moderated the event now works for Harry Reid.
Weve 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 administrations 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 dont 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.