Oakland OCCUPY Protesters vs Oakland Police: Economic Injustice vs Brutality

Police use tear gas on Oakland Occupy protesters

Oakland police used tear gas and "flash" grenades Saturday to break up hundreds of Occupy protesters after some demonstrators started throwing rocks and flares at officers and tearing down fencing.

Three officers were hurt and 19 people were arrested, the Oakland Police Department said in a release. No details on the officers' injuries were released.

Police said the group started assembling at a downtown plaza Saturday morning, with demonstrators threatening to take over the vacant Henry Kaiser Convention Center. The group then marched through the streets, disrupting traffic.

The crowd grew as the day wore on, with afternoon estimates ranging from about 1,000 to 2,000 people.

The protesters walked to the vacant convention center, where some started tearing down perimeter fencing and "destroying construction equipment" shortly before 3 p.m., the release said.

Police said they issued a dispersal order and used smoke and tear gas after some protesters pelted them with bottles, rocks, burning flares and other objects.

Most of the arrests were made when protesters ignored orders to leave and assaulted officers, the release said. By 4 p.m., the bulk of the crowd had left the convention center and headed back downtown.

The demonstration comes after Occupy protesters said earlier this week that they planned to move into a vacant building and turn it into a social center and political hub. They also threatened to try to shut down the port, occupy the airport and take over City Hall.

In a statement Friday, Oakland City Administrator Deanna Santana said the city would not be "bullied by threats of violence or illegal activity."

Interim police Chief Howard Jordan also warned that officers would arrest those carrying out illegal actions.

Oakland officials said Friday that since the Occupy Oakland encampment was first established in late October, police have arrested about 300 people.

The national Occupy Wall Street movement, which denounces corporate excess and economic inequality, began in New York City in the fall but has been largely dormant lately.

Oakland, New York and Los Angeles were among the cities with the largest and most vocal Occupy protests early on. The demonstrations ebbed after those cities used force to move out hundreds of demonstrators who had set up tent cities.

In Oakland, the police department received heavy criticism for using force to break up earlier protests. Among the critics was the mayor, who said she wasn't briefed on the department's plans. Earlier this month, a court-appointed monitor submitted a report to a federal judge that included "serious concerns" about the department's handling of the Occupy protests.


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Sources: ABC News, AP, CNN, Wikipedia, Youtube, Google Maps

BLACK Voters In The 21st Century! What Is Our Vote Worth Now?

How Much Is The BLACK Vote Worth In 2012???
I Am A Registered Independent NOT A Registered Democrat! But I’m Supporting Pres. Obama.

As The 2012 DNC Convention In Charlotte, NC Approaches I Feel It Necessary To Pose This Very Important Question To Democrat Leaders:
What Is The BLACK Vote Worth In 2012??
Why Do I Suddenly Feel That While Campaigning For Re-election This Year Pres. Obama Will Slowly Try To Move Towards The Center (Again)??
I Can Almost Feel It Deep Within My Soul That Once Again Pres. Obama Is Listening To His Team In The White House Instead Of "We The People" (Includes BLACK People Too).
His White House Team Is Advising Him To Move Towards The Center To Attract Upper Middle Class WHITE Voters.
Well What About BLACK Voters Being Disenfranchised Due To GOP Voter ID Laws? What About Former Upper Middle Class BLACK Voters Now Unemployed Due To Bush's Deregulated Wall Street Policies?
What About Low Income BLACK Seniors Now Retired With Little To Live On?
What About BLACK Vets Who After Defending Their Country Are Experiencing Difficulty Finding Good Paying Jobs They're Qualified For?
What About BLACK College Students Riddled With Student Loan Debt? What About BLACK College Grads Experiencing Difficulty Finding Work Due To Employment Discrimination?
What about For-Profit Colleges & Vocational Schools Robbing BLACK, Low Income Students Via Student Loans? (Student Loan Mills!)
What About BLACK Youth Locked Up In Prisons In Every State?
What About Police Brutality Such As In Charlotte, NC Where Even With A BLACK Police Chief We Are Still Being Harassed?
What About BLACK Ex-Cons Who Want To Work But No One Will Hire Them?
What About Qualified BLACK Applicants Who Can't Find Employment Due To Unnecessary Background Checks?
What About BLACK Communities Being Hit Hardest By Foreclosures?
What About BLACK Homeless Families & BLACK Homeless Veterans?
What About VA Hospitals Turning BLACK Vets Into Prescription Pill Addicts (South Carolina)??
What About Housing Discrimination Against BLACK Applicants Seeking To Rent In NYC?
What About BLACK Community Leaders (Including Mayors) Receiving Federal Funds But Doing NOTHING To Help Their BLACK Constituents?
What About BLACK Public School Students Being 30 Years Behind WHITE Students? What About BLACK Entrepreneurs Or Would-Be Entrepreneurs Who Can't Get A Break Due To Lack Of Opportunity?
Especially BLACK Entrepreneurs Desiring To Enter Silicon Valley/ Web 2.0?
What About The BLACK Progressives?
What About Us?
We've Been Patiently Waiting For 3 1/2 Years Pres. Obama While Every Other Group Received Something From Your Administration.
What About Us Pres. Obama? I Know You Need EVERY Vote But Please Don't Move Towards The Center & Abandon The American BLACK Community.
What About Us?


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Sources: Charlotte2012, Youtube, Google Maps

Romney, Wolf Blitzer & Santorum Win Thursday Night's GOP Debate (Florida)

Romney beats Gingrich at his own game


The first competitive debating technique I teach is AARP. No, I don't tell my teams to debate like older people. Argue. Attack. Respond. Presence.
Mitt Romney has improved in all four areas, and I can't overstate how important that was in Thursday night's CNN/Republican Party of Florida debate, especially presence.

Argue: Make your case. Romney was better at explaining his ideas.

One example:

On immigration, Romney said the issue involves three categories of people: those who come here illegally on their own, people brought in by coyotes and those who are waiting on one in their own home country. Romney said he believed we should focus our attention on the latter two groups and make legal immigration work better. That idea played well in the debate.

Attack: Point out your opponent's weaknesses. Romney improved here as well. In response to a question that had been first aimed at Newt Gingrich about colonizing the moon, Romney said he would fire anyone who brought him such an idea in this economy. (He really does like firing people.) He went on to make the point that candidates need to stop pandering by promising projects to voters, and ended with, "We've got to say no to this kind of spending."

Gingrich responded that we should not be "cheap everywhere." But he lost the point, especially with fiscally conservative Republicans. Moon colonies, to many, sound utterly ridiculous in this economy, and Romney exploited that fact.

Respond: Don't let criticisms go unanswered. Again, Romney learned from previous debates. He first had an excellent line answering Gingrich's assertion that grandmothers and grandfathers were not likely to "self-deport."

Romney came back:

"Our problem is not 11 million grandmothers." Boom! It both mocked Gingrich's grandmother self-deportation argument while at the same time underscoring the vast issue of illegal immigration.

And on his investments in Freddie Mac and Fannie Mae, Romney countered by saying that they were made from a blind trust (a "backward step" in debate strategy).

Romney continued with the "pivot forward" technique, which turns a potential negative into a positive by reminding us that one's financial accomplishments "... shouldn't be seen as a detriment ... [but] as an asset to help America." Perfect. Isn't it nice when something plays out exactly like you drew it up?

Presence: No matter how good your argument is, your delivery must be convincing. Romney made his stand in Florida. He changed his demeanor. And that one change was more important than all the other improvements combined.

I believe Republicans in the South Carolina primary rejected Romney because he didn't look or act like a winner in the debate there. He does now. He bested Gingrich on attitude in front of a raucous crowd -- Gingrich's usual "comfort zone." In other words, he beat Gingrich at his own game.

The first example was when he told Gingrich to stop calling him "anti-immigrant." Romney stared down the former House speaker and said, "The idea that I'm anti-immigrant is repulsive. Don't use a term like that." What followed next was telling.

Gingrich looked away and actually mumbled (almost inaudibly) "I'll tell you what ... " And trailed off. The lecturer (Gingrich) got lectured! It wasn't the slick Mitt with the professional style anymore.

It was a man-to-man stare-down. And Newt blinked. Romney was indignant and believable. That one debate moment might have shifted the balance permanently in his favor.

The other memorable example was when Gingrich was trying to avoid repeating negative statements he made about Romney's finances.

Moderator Wolf Blitzer pressed him, and Gingrich appeared about to squirrel his way out of it when Romney interjected, "Wouldn't it be nice if people didn't make accusations somewhere else that they weren't willing to defend here?" Kaboom! Again, Romney's stage presence was stronger.

And although Gingrich eventually answered the question, by then it was unimportant.
For his part, Rick Santorum went overboard repeatedly.

There's a fine line between criticizing others and being overzealous. Remember, I liked his approach in my previous debate analysis, but last night, Santorum's emotions were overdone.

He looked overheated. In fact, Romney at one point said to him in response to Santorum's passionate phrasing of a question on health care in Romney's home state, "It's not worth getting angry about." The content of Santorum's argument was lost in what sometimes seemed like a manic delivery. He needs to take it down just a notch or two.

Ron Paul? He was pretty darn funny last night, telling Blitzer at one point that the subject at hand didn't really interest him; challenging everyone to a 25-mile bike ride to demonstrate his good health; and suggesting sending politicians to the moon, instead of building colonies there.

But my favorite moment was when Paul was asked about a hypothetical phone conversation he might have with Raul Castro from the Oval Office. Paul's response? "I'd ask him what he called about, you know?" Awesome.

My takeaway: Republicans want somebody to fight for them, and after South Carolina, they seemed to think Gingrich was that guy. Not anymore. As of last night, Republican voters should see Romney as strong enough to be president. And more than anything, that's why he won the debate.

Romney's found his presence. And now that he has, there's zero chance he'll give it up the rest of the way through the primaries.


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Sources: CNN

North Carolina HOAs Gone Rogue! Lawmakers Refuse To Act! (Developer Political Donations)

HOA forecloses on family; neighbors lose, attorneys profit

Not all the foreclosures emptying homes across the Carolinas originate from banks and lenders. Increasingly, the institution doing the foreclosing is made up of neighbors who run the homeowners association–known as the HOA.

Consider one family’s story:

Michelle Roberts’ parents helped her and her husband buy their first home in Gaston County in 2003. Even though she and her husband Darin paid the mortgage, her mom and dad signed the note. Their names are on the deed. That means her parents are on the hook now that the home is in foreclosure and the courts have ordered her family to pack up and leave this week.

“We're going to have to move back in with mom and dad for a while,” Michelle said, sitting among boxes in her living room. “We have no choice.”

This is not one more bank foreclosure–one more mortgage gone bad. No, the Roberts are losing their home to their neighbors–their HOA.

“We just wanted them to work with us,” said Michelle. “We didn't neglect paying them on purpose. They neglected to notify us.”

The Mountain View Community Association off of Spencer Mountain Road near Ranlo, North Carolina and its management company, Hawthorne Management of Charlotte, did not send a bill to the Roberts for years.

“Not one word for six years,” said Michelle, “Not one word.”

The HOA lost track of the Roberts lot and two others when the builder transferred the property to their family. Then in May of 2009 the HOA sent Michelle’s parents a statement asking for almost six years worth of dues at once–$945.

“I don’t know how we would pay that, and I don’t think it’s fair,” said Michelle’s husband Darin Roberts.

At first the Roberts say they called a neighbor who served on the board of the HOA.

“She said, ‘Don’t worry about it. We’ll work it out. It’s not that big of a deal,’” said Darin.

That was before the lien notices and threatening letters began arriving from the HOA’s law firm.

“We were blindsided,” said Michelle.

So the Roberts tried repeatedly to work out a payment plan.

“They wanted a $444-a-month payment and refused to accept anything less than that,” said Michelle.

“I had my daughter selling brownies on the weekend,” Darin said. “I borrowed from my sister. I did overtime. I’m a middle class family dude that tries to pay his bills and feed his family.”

The Roberts made payments totaling $888 last May–which sounds like they’d paid off the bulk of their original HOA debt.

“You would think wouldn’t you?” said Michelle. “You would think.”

But no.

By that point, the HOA’s attorneys were involved. And they charged far more than the original debt in fees and court costs to try to collect it all. Court records show the Roberts whole payment went to legal fees–not to the HOA.

In fact, the paralegal working for the law firm e-mailed the Roberts that, “Your account will be charged $45 for every payment plan request” even if the lawyers refused to accept the terms.

“It’s just burying us deeper and deeper,” said Michelle. “Trying to fix the problem is just making it worse. Every time they touch it, every time they pick up the phone, we’re getting billed again.”

The Roberts gave up. The HOA and its law firm foreclosed.

“Now it just seems like the HOA’s can do whatever they want anytime they want,” Darin said.

And that original bill of less than a thousand dollars? T he attorneys added almost $6,000 in court costs and legal fees.

“The people that are benefiting are the attorneys,” said Michelle. “They’re getting five times what the original bill was.”

The people who are not benefit ting from this HOA foreclosure? The neighbors. Because the foreclosure means the HOA–the neighbors–now own the Roberts home.

“I don't know what good that is,” said Michelle. “People can't sell their homes who legitimately want to sell their homes now.”

Foreclosures can drive down property values for the neighbors since would-be buyers look to comparable nearby properties – known as “comps” – to gage the price they should pay. And foreclosed homes often sell at fire-sale prices, dragging down the neighborhood average.

“The HOA will get their $975,” said Michelle. “But they’ll also have an empty house along with the others they’ve done this to.”

The I-Team searched through Gaston County Register of Deeds records and found six more foreclosures in the last year and a half in the same Mountain View neighborhood from the same Hawthorne Management company and the same law firm: Sellers, Hinshaw. (Click here to read an e-mail from Sellers, Hinshaw)

“We try to work with people,” attorney Tim Sellers told the I-Team in an earlier interview.

Sellers refused to speak on camera about Mountain View and the Roberts.

“The vast majority of the ones we deal with if they’re not in compliance we work to get ‘em in compliance,” he said.

Sellers sent the I-Team a five page time line (click here to read) detailing two years of back-and-forth with the Roberts concluding, “Collection action was authorized only when the Association received no response from the owners or after the owners defaulted on the written agreement for installment payments.”

The Roberts say they made a good faith effort to try to pay an old debt during trying times and lost their home in the process.

Sitting on her couch before loading it on the truck, Michelle summed it up: “We’re like every other family. We’re struggling. We’ve had to take three pay cuts in the banking industry just to keep a job. My business was cut in half. My father has a rare and aggressive cancer.”

Michelle’s father, Dennis Hiatt, said he may go bankrupt. Between breaths from an oxygen tank he says: “It may be legal what they’re doing but it’s just not right.”




NASCAR driver loses four year legal fight with HOA


Todd Bodine is accustomed to the sound of winning.

The NASCAR driver has won the sport’s truck series twice, most recently last year. But earlier this month, if you were to pass by the Bodines’ well-kept home in the Harris Village neighborhood of Mooresville, you would have heard the sound of Todd Bodine losing, as he and a crew of helpers tore down his prize pool house and tiki hut board by board and piece by piece, the result of an epic four-year battle with his homeowners association, or HOA.

A select committee of North Carolina lawmakers considering reforms of the HOA statutes heard that 53% of owner-occupied homes in the state are governed by HOA’s. But few of those homeowners sue their HOA and appeal all the way to the state Supreme Court, only to lose and have to tear down a structure, plus pay opposing attorneys’ fees and fines in the hundreds of thousands of dollars. The Bodines did.

“I think I’ve been done wrong,” Bodine said, sitting in shorts by his pool, the remnants of his poolside bar covered with a tarp. “And it’s incredible how unjust it is.”

The disagreement started in July of 2007 when the HOA board president who the Bodines had entertained over beers as they built their pool abruptly told them the pool house was not approved. “The president never said ‘it's OK for you to start building,’” said Keith Black, the Greensboro attorney who represented the Harris Village HOA.

Todd Bodine insists the HOA president had told him verbally to go ahead and build. “Everything was always, fine, OK, looks good,” said Bodine.

The issue came to a head at an emergency meeting in the Bodines’ driveway. Bodine was upset. “It was on then. I got in his face,” Bodine said. He and his wife went inside their home while the board members talked things over. The board members signed a “Request for Architectural Approval” checked “approved” pending the approval of the Town of Mooresville Codes Department, which the Bodines quickly secured.

But the dispute continued. The board’s attorney contends that the document was conditional on the Bodines submitting final drawings with dimensions and that the board never realized how large the structure would be. The HOA had issued interpretations of the covenants limiting the size of “accessory buildings” including tool sheds and utility buildings to 320 square feet. But the document was never recorded as part of the covenants.”They ignored the phone calls, the e-mail and built the thing,” said Black.

So when the Bodines returned home after several weeks on the road racing, they faced threatening letters and the prospect of fines from the HOA. “They were fining us $100 a day which is absurd,” said Bodine. The Bodines filed suit.

Bodine insists the HOA targeted him, knowing he could afford the fines. “I was gouged pretty hard because of who I am,” Bodine said. “I believe a lot of it was because of my celebrity as a NASCAR driver.”

But Black, the HOA’s attorney, says the lawsuit had nothing to do with Bodine’s status, further saying the HOA tried to settle. “They said, ‘No. We're not gonna do it. You're wrong. Kiss our rear end. We'll see you in court,’” said Black.

If it’s true that you can’t fight city hall, Todd and Janet Bodine found you really can’t fight the HOA. They lost at every level. It started when the trial judge gave a directed verdict to the HOA so the jurors who sat through days of testimony never even got to deliberate. “We were all dumbfounded,” said Bodine. Then the Bodines lost on appeal. And finally the state Supreme Court refused to even hear the case.

In the whole four years no one said the Bodines’ pool house hurt Harris Village. “Hell it was nice looking,” said Black. “That wasn't the issue. Nobody said it's ugly and you have to take it down.”

Instead the HOA stood on principle and said if they let the Bodines build a pool house without the permission of the HOA board – then what next? “They open the door for anybody and everybody else to say, ‘Well I want to paint my house purple and have pink toilet seats all over the front yard,’” said Black.

The Bodines say other Harris Village homeowners have broken the architectural guidelines of the HOA, so they believe the fight got personal. “I think it was a small group of people out for vengeance,” said Bodine. “They saw their cash cow and they were going for it.”

So now the Bodines are on the hook for their own attorney’s fees, the HOA’s attorneys’ fees and almost $40,000 in accrued fines. The HOA put a lien on their home for the unpaid fines. Bodine was fed up. “I told ‘em, ‘Take it. Take the house,” he said.

Having exhausted their appeals in the courts, the Bodines would like the state legislature to consider reigning in the powers of HOA’s, a group of almost 18,000 neighborhood governments in North Carolina run by neighbors. “A lot of time their power is just way too strong,” said Bodine.

Black and other attorneys representing the HOA’s say that neighbors have legal remedies built into the law and if they don’t like the way the HOA is run they can always throw out the board by electing someone else. “Anytime somebody loses all of a sudden they want it to be changed,” said Black.

But the Bodines are hardly the only homeowners to run afoul of a group of neighbors bent on tearing down their property. And the state legislature is considering several bills to reform HOA’s. None of them will help the Bodines who this month tore their pool house to the ground.


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Sources: McClatchy Newspapers, WCNC, Google Maps

America Rapidly Spiraling Into GOP Engineered Double-Dip Recession

Visit msnbc.com for breaking news, world news, and news about the economy

10 signs the double-dip recession has begun

Friday's news on GDP shows the double dip has arrived — an expansion of only 1.3 percent and consumer spending up 0.1 percent in the second quarter. Astonishingly low by any account. The debt ceiling trouble and lack of a longer term resolution to the deficit will make it worse.

The U.S. has entered a second recession. It may not be as bad as the first. Economists say that the Great Recession began in December 2007 and lasted until July 2009. That may be the way that the economy was seen through the eyes of experts, but many Americans do not believe that the 2008-2009 downturn ever ended. A Gallup poll released in April found that 29 percent of those queried thought the economy was in a “depression” and 26 percent said that the original recession had persisted into 2011.

It is any wonder that many Americans believe that the economic downturn is still in progress? Home prices have fallen to 2002 levels. Values have dropped nearly 50 percent in parts of Florida, California, Nevada and Arizona. Property values are also down that much in parts of troubled big cities like Detroit. Estimates are that as many as 11 million homes have underwater mortgages. Banks have inventories of as many as 2 million foreclosed homes which have not even been released to the market. Home prices could fall another 10 percent if current trends persist.

Perhaps the most powerful argument that the recession never ended or that a new one has begun is the persistence of unemployment. Fourteen million people are out of work. A third of those have been jobless for more than a year. May employment data showed the jobless rate rose unexpectedly and that the economy added only 58,000 jobs. Experts believe that the unemployment rate will not improve significantly until the monthly gain in jobs is consistently 300,000 jobs or more. And, at that rate the gains would have to go one for more than two years to bring the economy back to what is traditionally considered a reasonable unemployment figure.

There are several signs that a recession is firmly in place again and that the downturn could last for several quarters. Most are already easy for the average American to see.

1.) Inflation

There is almost nothing that damages consumer confidence as badly as a rapid rise in prices. Starbucks recently increased the price of a bag of coffee by 17 percent because wholesale prices have risen by almost twice that rate in the last year. Cotton prices nearly doubled in 2010 but have fallen this year. But, apparel is made months in advance of when they reach store shelves. Summer clothing prices are up as much as 20 percent. That may change in the fall, but for the time being, the consumer’s ability to buy even the most basic clothing has been undermined. Consumers today pay more for sugar, meat, and corn-based products as well.




2.) Investments have begun to yield less

Part of the recovery was driven by the stock market surge which began when the DJIA bottomed below 7,000 in March 2009. The index has risen above 12,000 and the prices of many stocks have doubled from their lows. As result, American household nest eggs that were decimated by the collapse of the market have rebounded and enabled people to splurge on themselves. However, the market has stumbled in the last quarter. The DJIA is up only 1 percent during the last three months and the S&P 500 is down slightly.

Americans, though, have few other places to put their money. Ten-year Treasuries yield about 3 percent. Gold was a good investment over the last year, but it has begun to falter as well. The market may not be a friend to investors for quite some time.

3.) The auto industry

The auto industry has staged an impressive comeback, although its profitability is based as much on the layoffs it has made over the last five years as generating new sales. GM and Chrysler have emerged from bankruptcy. Year-over-year monthly sales improved late last year and through April. May sales stalled. GM’s revenue dropped by 1 percent compared to May of 2010. Ford’s sales were down about as much. There are many reasons for this trend including high gas prices and the constrained manufacturing capacity of the Japanese automakers because of the earthquake. Consumers also may be deferring big purchases because they are worried about their economic prospects. Slow car sales are not just a sign of lagging consumer confidence. They also may be a harbinger of tougher times ahead. These companies shed several hundreds thousand jobs before and during the last recession. Car firms have only just begun to hire again, but that trend will die with a plateau in sales.

4.) Oil prices

Oil prices are supposed to drop as the economy slows as they did in 2008 and early 2009 when crude fell from over $140 to under $50. That drop at least allowed consumers and businesses like airlines to more easily afford fuel. Recently, crude has moved back above $100 and appears to be stuck there regardless of the economic situation. American budgets have been hurt by the rising cost of gas. Americans of more modest means have been particularly affected. A slowdown in driving usually also leads to a decline in the retail sector as consumers reduce unnecessary travel to stores. The impact on other businesses is just as great. Airlines suffer and so do firms which rely on petrochemicals. OPEC, for now, has signaled it will not increase production.

5.) The federal budget

The federal budget deficit has decimated any chance for another economic stimulus package which many prominent economists like Nobel Prize-winner Paul Krugman say is essential to create a full recovery. His theory has become more of an issue as GDP growth slows to a rate of 2 percent. The first $787 billion Obama stimulus package may have saved some American jobs, but it is long over and did not work if a drop in unemployment and a sharp improvement in GDP were its primary goals. The deficit has caused a call for severe austerity measures which have already become part of the economics policies of countries from Greece to the U.K. to Japan. Job cuts in the U.S. will not be restricted to the federal level.



A recent UBS Investment Research analysis predicted that state and local governments will cut 450,000 jobs this year and next. That process is already well underway. States like California and New York currently run massive deficits and the rates they must pay on bonds has risen accordingly. Newspaper headlines almost daily report on battles between state unions and governors over employment and benefits.

6.) China economy slows

A slowdown in the Chinese economy is usually seen as a cause of global commodity price inflation, but the effects cut two ways. China’s appetite for energy and raw materials may fall. But, the demand for goods and services by its very large and growing middle class drops as well. Chinese purchaser manufacturing and export numbers have fallen as the central government has tightened the ability to borrow money. US exports to China are key to the health of many American businesses.

John Frisbie, the president of The US-China Business Council, recently said, "Over the last decade we have seen exports to China rise from $16.2 billion to $91.9 billion — a 468 percent increase.” As that rate slows, it has a profound effect on tens of thousands of American companies and their employees. U.S. firms with large operations in China are also effected. GM is one of the two largest car firms in China along with VW. Large U.S. corporations like Wal-mart and Yum! Brands rely significantly on China to boost global sales. Without vibrant consumer spending in China, American companies will suffer.



7.) Unemployment

Unemployment creates two immediate problems. People without jobs drastically curtail their spending, which will ultimately affect GDP growth. The second is the need for tens of billions of dollars every year in government aid to keep the unemployed from becoming destitute. That support has increased deficits and the domino effect is that cash-strapped governments need to make more spending cuts. It may be the biggest challenge the economy faces.

Unemployment has worsened because people over 65 to continue to work because the values of their homes — which they once counted on as the financial basis of their retirements — have dropped so sharply. Older Americans also fear that cuts in Medicare and perhaps Social Security are inevitable which increases the cost of their golden years. The jobs that older Americans have taken are often ones that younger Americans might have. People in their 20s must accept low wages to enter the workforce. This has delayed their prime consuming years well into their 30s which will damage GDP recovery now and for another decade.

The worst of the unemployment problem is the roughly 5 million Americans who have been unemployed for over a year. Their unemployment benefits have run out in many cases. The burden of their care falls to their families, friends, community organizations and non-profits. A family which has to support an unemployed person may be a family which cannot spend beyond its basic needs. To the extent that the federal or state governments can support the unemployed, the cost to run support programs increases.

8.) Debt ceiling

The United States debt ceiling, currently at $14.294 trillion, will probably be raised before the government has to cut back essential services on Aug. 2. It might seem that the economic and employment effects of the debt cap are the same as the deficit, but they are actually more insidious and longer term. The first by-product of debt reduction, or at least a slowdown in its growth, is a combination of higher taxes and a lower level of government services. Higher taxes usually slow economic improvements, particularly when they are not coupled with stimulus measures.

A number of economists have pointed out the expense reduction alone will not sharply improve the United States balance sheet. The increase in Medicare and Social Securities costs, brought on by an aging population, are also likely to trigger a need for higher taxes. Tax increases could keep the economic growth of the US on hold for years. The taxation of companies decreases and often eliminates profits, particularly during an already troubled economic period. Profits which disappear usually cause cuts in purchasing and jobs. Taxes on wages and inheritance undermines consumer spending. And, a growth in national debt from already all-time highs will increase the borrowing costs of the U.S. That, in turn, drives up interest rates for everything from mortgages to credit cards.

9.) Access To credit

The lack of access to credit has hurt the economic activity or both individuals and small businesses. Many very large companies can borrow money at rates as low as 2 percent because of their strong cash flows and balance sheets. Banks have been much less willing to loan money to companies with under 100 workers because these firms often rely on a few customers for revenue and usually have very little money on hand.

Early in June, the House Small Business Committee held hearings and among its findings were that concerns about risk and a slow economy has made financial institutions reluctant to lend to small businesses, the main driver of economic growth. Committee Chairman Sam Graves (R-Mo.) said Congress will need to “bridge the gap” between the two sides. There is no plan to accomplish that. Individual borrowers find themselves in a similar position. The cost of credit cards debt is still above 20 percent in many cases although the Federal Reserve loans money to large financial firms for interest rates close to zero.

Potential home buyers, who might help break the gridlock of slow house sales, often find that banks want down payments as high as 20 percent. The median down payment in nine major U.S. cities rose to 22 percent last year on properties purchased through conventional mortgages, according to an analysis done for The Wall Street Journal by real-estate portal Zillow.com. That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997. Homes which are not sold often put such great burdens on owners that they are barely consumers of the goods and services that drive GDP. Home builders have continued to struggle. Construction jobs, which were a huge amount of the employment base in states like Florida, have not returned.

10.) Housing

Housing is considered by many economists to be the single largest drag on the American economy, and the housing market has gotten much worse in the last two months. A report from The New York Federal Reserve published early this year said: “When home prices began to fall in 2007, owners’ equity in household real estate began to fall rapidly from almost $13.5 trillion in 1Q 2006 to a little under $5.3 trillion in 1Q 2009, a decline in total home equity of over 60 percent.”

Real estate research firm Zillow reported on more recent developments. “Negative equity in the first quarter reached new highs with 28.4 percent of all single-family homes with mortgages underwater, from 27 percent in Q4.” Many homeowners who want to sell their homes cannot do so because they cannot afford to pay their banks at closing. Whether for good or ill, the American home was the primary source for money used for retirements, college educations and the purchases of many expensive items such as cars.

Economists point out the this leverage helped contribute to the credit crisis as people could not cover the costs of home equity loans as real estate values collapsed. This may be true, but the drop in value happened so quickly that the balance sheets of millions of Americans were destroyed. Their ability to consume was severely damaged, further harming GDP. High mortgage payments bankrupted or nearly bankrupted people who have lost jobs or have found that their incomes had stagnated. The building industry became a shambles overnight. And, whatever the effects have been over the last three years, they are getting progressively worse as home values drop to decade lows. There is no relief in sight because potential buyers worry that price erosion has not ended.


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Sources: CNBC, MSNBC, Russia Today, Youtube, Google Maps

Bank Of America & Countrywide's $8.5B Settlement Jeopardizes Homeowners (More Foreclosures)

Visit msnbc.com for breaking news, world news, and news about the economy

Visit msnbc.com for breaking news, world news, and news about the economy

Bank of America settlement could speed foreclosures


Investors who bought bonds backed by shaky loans scored a major victory Wednesday with the announcement that Bank of America will pay more than $8 billion to make up for some of their losses.

Homeowners on the other end of those shaky mortgages — especially those most at risk of foreclosure — may have less to cheer about.

In the largest settlement to date related to the rogue mortgage lending wave, Bank of America said Wednesday it would pay $8.5 billion to settle claims with investors holding about $100 billion worth of mortgage-related securities sold by its Countrywide unit. The winners include 22 large investors such as Pimco, Metropolitan Life and BlackRock, as well as the Federal Reserve Bank of New York.

Aside from their claims that Countrywide sold them bonds backed by faulty loans, the investors argued that by continuing to service bad loans rather than speeding up foreclosures, the Bank of America unit ran up servicing fees, profiting at the expense of investors.

As a result the settlement includes a promise to hire additional “subservicers” to speed up the foreclosure process for high-risk loans. That means Bank of America borrowers whose foreclosure have been on hold may now see the process accelerated.

“Living with the uncertainty of foreclosure can’t be a pleasant experience,” said Bank of America spokesman Jerry Dubrowski. “The sooner we can deal with that overhang the better for the economy.”

Bank of America also faces considerable uncertainty as it continues to try put its mortgage woes behind it.

While the bank said its settlement would resolve "nearly all" its exposure related to mortgages issued by Countrywide, only holders of about a quarter of the securities have agreed to support the deal. Hundreds of investors holding an additional $300 billion worth of securities have yet to agree to the settlement, which also is subject to court approval. There are no guarantees that the remaining investors will go along.

“It is not possible to predict whether and to what extent challenges will be made to the settlement or the timing or ultimate outcome of the court approval process,” Bank of America said in its press release announcing the settlement.

At the height of the boom, rising home prices allowed mortgage originators to replace failed loans with freshly written performing mortgages. Lenders, investors and borrowers all assumed that there was little risk in churning out new mortgages — even if they were based on flawed information — because even if a loan defaulted, the rising value of the home securing it would minimize any potential losses.

But when home prices began falling, many of those bad loans came back to haunt the companies that had underwritten them. With demand for new mortgages drying up, there weren’t enough new loans to replace the ones that were going bad.

Now investors holding bad mortgages are demanding that lenders buy them back. Those investors include government-controlled lending giants Fannie Mae and Freddie Mac. In January, Bank of America paid $2.8 billion to Freddie and Fannie to buy back mortgages.

Bank of American concede in its press release Wednesday that that it “is not currently able to reasonably estimate” how much more it may have to pay to the two entities for losses on mortgage investments.

It’s also still not clear just how big the mounting losses on mortgage investments will be. With home prices still falling and mortgage defaults rates high , losses on foreclosed homes are hitting even those investors holding top-rated bonds. The ultimate cost of the claims will depend on how many more homes are lost to foreclosure and how much further home prices fall.

Bank of America also faces a potentially large payout to all or some of the 50 state attorneys general, who have been investigating abuses by the biggest mortgage servicers. The state officials are pressing the largest banks, including Bank of America, to pay up to $30 billion in fines and penalties. If a unified settlement can’t be reached, Bank of America could face multiple legal challenges from states that decide to pursue claims on their own.


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Sources: CNBC, MSNBC, Google Maps

Prince George's County Foreclosures & Bush's Deregulation Policies

Thanks To Former Pres. George W. Bush's Wall Street Deregulation Which Spurred Predatory Lending Practices, The Most Affluent Black County In America: Prince George, Maryland Is Now Experiencing Record Foreclosures.

Do You See How GOP Lawmakers Are Slowly Trying To Destroy The Black Community's Wealth?

The American Dream Is NOT Dead!

However GOP Leaders Want Black & Hispanic People To Think Its Dead For Them.

VOTE OBAMA IN 2012!



Affluent black county mired in mortgage mess


America’s wealthiest black county is in trouble.

Prince George’s County, Md., has gained prominence in recent years as the most affluent county in America with a majority African-American population. Average income in the county is almost double the national average for black families, according to the Census Bureau’s 2009 American Community Survey.

But the county, adjacent to the District of Columbia, has been laid low by the recession and the mortgage meltdown and now holds a more dubious distinction: a rising foreclosure rate that ranks as the worst in Maryland.

More than half of all housing sales in the county so far this year have been properties in foreclosure, a rate that dwarfs other counties in the state, according to MRIS, which provides listing services for real estate agents. This has caused a domino effect of social, economic and financial problems to ripple throughout Prince George’s communities.

“The biggest changes I’ve seen are very visual,” said District Heights resident Yvonne Brown. “If you just drive down my street, there are four empty homes with the grass ten feet tall. It’s heartbreaking.”

Foreclosure sales, which have risen from 34 percent in 2009 to 51 percent so far this year, are just one sign of problems affecting Prince George's.

The county has imposed a hiring freeze, except for new public safety workers, and it recently cut $13 million from the school budget, although the county government's finances are solid enough that all three major rating agencies recently awarded it their top AAA bond rating. A wave of homicides this year has raised concern about safety in the county, and former County Executive Jack Johnson pleaded guilty last month to federal charges stemming from a sweeping corruption investigation.

Experts say there are a variety of reasons why the county ended up in the middle of the mortgage mess.

A decade ago, housing stock in Prince George’s was significantly less expensive on average than in any other suburban county in the D.C. metro area, so it had strong appeal for first-time homebuyers, said Anirban Basu, economic analyst and CEO of Sage Policy Group, a Maryland consulting firm. In general, home prices in low- and moderate-income neighborhoods rose more quickly in the boom and have fallen more sharply in the bust, Federal Reserve Gov. Janet Yellen noted in a speech Thursday.

Prince George's County also was a hotbed for speculative activity among professional and amateur investors during the housing upturn, Basu said. “The demographics of those affected correspond neatly to the demographics of a first-time home buyer: lower and less-stable incomes,” he said.

Brown, 34, is a prime example. As a first-time homebuyer and single black woman, Brown moved to Prince George’s in 2006 from nearby Montgomery County because she couldn’t afford home prices there.

She paid $230,000 for a tiny, 664-square-foot home that she said is “more like a small cottage.” The previous owners had paid $60,000.

“I didn’t go outside of my means and buy an astronomically large home,” she said. “I did something extremely practical.”

Bob Ross, president of the county branch of the National Association for the Advancement of Colored People, said it was clear that when the housing bubble burst, many newcomers were hit harder than the older, more established families.

“People didn’t fully understand what they were doing when they refinanced or when they took out more mortgages,” he said. “I can’t speak for the NAACP, but I do personally believe that discriminatory lending was going on.”

A 2008 report from the National Commission on Fair Housing and Equal Opportunity highlighted the practice of “reverse redlining,” which occurs when lenders target minorities with costly, subprime loans that they may not need or be able to afford. Analysis of data from 2006 indicates that roughly 54 percent of African-Americans and 47 percent of Latinos received subprime loans, compared with about 17 percent of whites, according to the report.

“If one considers the group that is most impacted (i.e. African-Americans and Hispanics), one can make a credible argument that the lending practices and the aggressiveness of subprime lender greatly contributed to the high rate of foreclosure,” Eric Brown, director of Prince George County’s Housing and Community Development Department said in an email.

Newly elected County Executive Rushern L. Baker III said his administration is doing everything in its power to help keep residents in their homes. County officials have allocated $1.8 million in their 2012 budget to rehabilitate abandoned and foreclosed properties.

Baker said in an email that the county is stressing preventative measures "to get people assistance before it’s too late.”.

Carol Gilbert, assistant secretary for neighborhood revitalization in Maryland’s Housing and Community Development Department, said Prince George's County accounts for 25 percent of the state's foreclosures. "It will get worse before it gets better, especially for Prince George’s County,” she said.

“While a lot of gains were made in home ownership, more so in the last three to five years, the foreclosure crisis really hit the minority community the hardest,” she said. “That’s a very big step backwards for building equity and wealth over time.”

In an effort to slow the foreclosure wave, the county is promoting non-profit housing counseling programs like the Housing Initiative Partnership (HIP), which provides financial literacy resources and helps homeowners understand their options.

Brown has been taking advantage of HIP’s help to try to get a modification on the two mortgages she has on her home. Without their help, she would have probably lost her home, she said.

With one in four people in Prince George’s behind on their mortgage, and only six counselors on HIP’s staff, their phones have been ringing off the hooks for the last three years and their calendars are booked for weeks, said Mary Hunter, director of

There’s just not enough funding to support the counseling that’s needed,” Hunter said.

While Hunter still has clients coming in because of predatory loans, more of her clients now are having trouble due to declining incomes. They aren’t necessarily unemployed, she said, but they may have lost a second job, overtime hours or supplementary income from a spouse. Also, Hunter said fewer people are receiving unemployment benefits now than a year ago.

As a high school English teacher, Brown has had to deal with budget cutbacks and furloughs that affected her paychecks. The after-school tutoring programs that Brown depended on for a supplemental income are gone too.

Now she’s hoping to find help in the state’s Emergency Mortgage Assistance Program. The Maryland Department of Housing and Community Development recently received federal funding to offer a limited number of no-interest loans to homeowners who have fallen behind because of loss of income due to unemployment or health issues.

“There’s a huge demand for this program now,” Hunter said. Eligible homeowners can get a zero-interest loan of up to $50,000 for two years to help them with their mortgage. “It can be the only hope people have to save their homes,” she said.

Brown is in the process of gathering her paperwork to apply for the program. Though she has her hands full with a 10-month old child and another on the way, she has been relentless in the fight for her home.

“People don’t understand how much help is out there,” she said. “They’re very depressed and consumed in their situation, and they can’t get past it to apply for a program to get the help they need.”


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Sources: MSNBC, The Grio, Washington Post, Wikipedia, Youtube, Google Maps

BOFA Claims It Will "Really" Begin To Help Homeowners

Bank Of America Vows To Do More For Harried Borrowers


Bank of America Corp.'s top mortgage executive will tell a Senate panel today that the Charlotte bank is taking steps to improve loan modification and foreclosure processes that have confounded many struggling borrowers.

Among the changes, the nation's biggest Mortgage Servicer has started giving borrowers a single point of contact in the modification process, Barbara Desoer says in written testimony submitted to the Senate Banking Committee. Homeowners often complain about being passed from department to department when they're seeking agreements to reduce their payments.

The bank is also looking to change an industrywide practice of considering a borrower's modification request, while also taking steps toward foreclosure, she says. This so-called "dual-track" system has led to incidents in which borrowers face foreclosure proceedings even as they're working out modifications.

Bank of America doesn't "claim perfection," Desoer says in her prepared remarks, but continues to "put forward solutions that respond to customer needs."

The bank is working with state attorneys general and other parties as it makes changes to its approach, Desoer says. Last week, bank executives were in Iowa for discussions with state officials who are leading a probe of foreclosure practices at the nation's biggest lenders. N.C. Attorney General Roy Cooper and some of his peers have indicated that changes to modification programs may be a potential remedy.

Desoer and a JPMorgan Chase & Co. mortgage executive are likely to face tough questions from senators angered over allegations that banks employed so-called "robo-signers" who rapidly approved foreclosure documents without properly reviewing them. Iowa Attorney General Tom Miller is also on the witness list.

Bank of America became the nation's largest mortgage servicer in 2008 when it bought ailing Countrywide Financial Corp. It now administers about 14 million customer loans - about one in five U.S. mortgages.

More than 86 percent of Bank of America customers are current on their loans and making their payments, Desoer notes. But the bank has had to focus extensively on the portion of customers in default or struggling to make payments. Of the 14 million loans, about three-fourths are owned by investors such as Fannie Mae and Freddie Mac, complicating efforts to reach modification agreements.

As it looks to improve the modification process, the bank has assigned 140,000 customers a single case manager to handle questions, according to Desoer's testimony. Wells Fargo has said it will implement a similar approach for certain Wachovia customers as part of a settlement announced last month. The San Francisco-based bank has also said it's providing a single point of contact to customers who make new modification requests.

Among other changes, Bank of America is looking to create a "customer status checklist" that will show customers where they stand in the process. The bank also plans to double its staff that works with customers face-to-face either at Bank of America offices or alongside nonprofit groups. Other steps may come up in the bank's "constructive and continuing conversations" with Miller and other attorneys general, Desoer says.

Meanwhile, Bank of America has halted foreclosure sales in 50 states as it reviews its processes. The bank believes the basis for all of its foreclosures has been accurate, but it has identified "areas for improvement," Desoer says. The bank has changed its affidavit forms, installed extra quality control checks and changed procedures for hiring outside lawyers. "Every affidavit will be individually reviewed by the signer, properly executed and promptly notarized," she says.











Moynihan "Surprised" By N.Y. Fed Letter


Bank of America Corp. chief executive Brian Moynihan said he was surprised when the Federal Reserve Bank of New York and investors sent a letter pushing the firm to repurchase soured mortgages pooled into securities.

The bank expects to resolve the dispute, which could pressure Bank of America to foreclose on borrowers more quickly, Moynihan, 51, said Thursday in Boston at a presentation to banking analysts.

"I don't think we should be put in a position where we aren't trying to help homeowners through this strife because people want us to foreclose faster," he said.

Bank of America shares declined 4.4 percent on Oct. 19 after news of the letter signed by the New York Fed, Pacific Investment Management Co., BlackRock Inc. and others, alleging the bank's Countrywide Financial Inc. subsidiary didn't service loans properly. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc.

"The fact that they signed the letter from your standpoint surprised you, it surprised me, and it is a surprise to a lot of people," Moynihan said, referring to the bondholders. "We have disputes with them about other assets in those pools and we've resolved them."

Bank of America, the largest U.S. lender, has said it has formal outstanding demands from mortgage investors seeking repurchases of almost $13 billion of loans that may have failed to accurately document key data, such as income and home values.

The Charlotte-based bank is also among lenders facing being investigated by state attorneys general over its handling of foreclosures.

Moynihan said he called BlackRock Inc. CEO Larry Fink to discuss the dispute.
Bank of America said Wednesday it would reduce its 34 percent stake in BlackRock, preferring to use the capital for its own businesses. The bank will remain a strategic partner of BlackRock, the world's largest asset manager, for a long time, Moynihan said.

The bank said last month it would start resubmitting foreclosure affidavits in 102,000 cases in which judgment is pending. Amid pressure from lawmakers and state officials, bankers have delayed action in order to review filings that some borrowers claim were marred by so-called robo-signing, in which employees vouched for the accuracy of court statements without personally checking loan records.

The mortgage-bond investor group including BlackRock says Bank of America's foreclosures take too long because of missing documents, processing mistakes and insufficient staffing to evaluate borrowers for loan modifications, Kathy Patrick, their lawyer at Gibbs & Bruns LLP, said Oct. 19.

Moynihan responded Thursday to a question on whether Bank of America would consider a bankruptcy of Countrywide to limit potential losses from distressed home loans.
"We don't see any liability that would make us think differently about working through this in the ways we are working through this," he said.





Did Bank Of America Try To Buy DNC 2012 With Loan?

Pajamas Media roots into FEC filings to discover that Bank of America loaned the Democratic National Committee and the Democratic Congressional Campaign Committee $32m. last month while asking for nothing more than future contributions as collateral. Such de facto mailing list valuations are an extremely flimsy basis for securing a loan. PJM asks:

Were the Bank of America deals legitimate, arms-length transactions, or were they cozy sweetheart deals in which nothing was really put up to secure a $32 million loan?

But one question not asked is the connection between the loan and Charlotte’s ongoing pursuit of the DNC’s 2012 convention. We already know that BAC CEO Brian Moynihan has been called President Obama’s favorite banker and that the bank’s exec team — like the rest of the Uptown crowd — is full-on behind landing the convention for Banktown USA. Plus we have ample local precedent for BAC throwing millions in sweetheart loans at favored endeavors — the US National Log Flume Ride and France Family Convention Center Annex being two glittering, irrefutable examples.

BAC has yet to respond to PJM inquires with details about the loans — but you know what is coming. BAC will say there is a legit business purpose to the loans and any suggestion to the contrary is counter-factual.




Did The DNC Get an Illegal Campaign Loan from Bank of America? (PJM Exclusive)

Shortly after Labor Day, as polls continued to sink, the Democratic National Committee (DNC) realized it needed a cash infusion for the upcoming midterm elections.

Its chairman, former Virginia Governor Tim Kaine, turned to the Bank of America to secure a $15 million revolving credit line. Then, in the middle of this month, the Democratic Congressional Campaign Committee (DCCC) got another loan from BofA for an additional $17 million.

What was their collateral? It turns out, not much.

The DNC claims their collateral was an intangible piece of property — its donor mailing list. The DCCC only cites unnamed “assets.” Neither party organization possesses real estate even close to cover the $32 million. The DNC’s headquarters is owned by another entity. Even it was put up as collateral, its market value was last estimated at only $13.7 million.

Were the Bank of America deals legitimate, arms-length transactions, or were they cozy sweetheart deals in which nothing was really put up to secure a $32 million loan?

And if it was the latter, could it be considered an illegal campaign contribution from the largest bank holding company in America?

There also is troubling evidence that two days before closing on the loan transaction, the DNC changed its own privacy provisions to allow the selling or sharing of private donor data.

BofA has been a longtime friend of Democrats. In the 2008 election cycle, BofA gave its largest single campaign contribution to then-Senator Barack Obama. According to Bloomberg News, BofA’s new CEO, Brian Moynihan, is considered Obama’s top political ally on Wall Street.

On the eve of the midterm elections, the appearance of preferential loans from cozy Wall Street bankers could play badly with the electorate. What message does a largely unsecured $32 million credit line for the Democratic Party send to thousands of cash-starved small businesses across the nation who can’t secure any credit even with tangible assets?

The findings are part of an exclusive Pajamas Media investigation.

The DNC Loan Agreement as posted online by the Federal Election Commission (FEC) and signed by former Virginia Governor Tim Kaine (D) on September 16, 2010, says the loan collateral included: “All electronic mail (‘E-mail’) addresses and other contact lists, records and other Information (electronic or otherwise) relating to contributors, supporters and subscribers owned by any of the Borrowers.” The borrowers in this case were the DNC and the DNC Services Corporation.

The loan agreement further stipulates that if the Democrats defaulted, Bank of America would be entitled to “proceeds from any fundraising activity, refunds, reimbursements, or proceeds from the rental or sale of mailing, contact or subscription lists or Information (electronic or otherwise).”

One key to understanding the problems behind the $15 million loan is determining what the donor list is actually worth. The DNC filings with the FEC do not attach any independent appraisal documents or list broker evaluations to establish the list’s fair market value.

Senator John McCain once tried to use his presidential donor list as collateral for a loan. He valued his Republican donor list as worth $3 million. The bank rejected the loan.

Trying to fix a value on an intangible mailing list is very difficult.

“Donor lists do have value, but very fleeting value,” Ken Boehm, chairman of the National Legal and Policy Center, told Pajamas Media. “Lists do deteriorate and $15 million is an awful lot of money. So if the bank ends up with the list because the party is broke, where are they going to get their money?”

A senior executive who is part of a national U.S. bank told Pajamas Media that a data list would be a weak basis for a $15 million loan. He gave his comments on the grounds that he would not be publicly identified. He said he was “somewhat skeptical of a donor list as adequate collateral for a $15 million credit line.”

But if the value is not $15 million, it could be considered a substantial campaign contribution to the Democratic National Committee. And that could be illegal.

“The DNC would have to demonstrate it’s an arms-length, commercially reasonable, properly collateralized loan,” says Cleta Mitchell, a Washington-based attorney with Foley & Lardner LLP and an expert on campaign finance law. She says there needed to be some outside way to assess or appraise the list before the line of credit could be approved. “Otherwise, it’s an illegal contribution from a national bank,” she says.

Hans von Spakovsky, a former commissioner on the Federal Election Commission, agrees. Unless the DNC or BofA conducted an independent appraisal, the loan could be considered an illegal campaign contribution. “The FEC would require an independent appraisal of the fair market value of the list that supports the amount of the loan. Otherwise as a commissioner I would consider this an illegal contribution,” he told Pajamas Media.

In 2005, ATA attorneys for direct mail pioneer Richard Viguerie told the Federal Election Commission that ATA could not get credit using its mailing lists as collateral. Concerning its own client’s many mailing lists, ATA told the FEC that as a standard business practice, “the collateral is the mailing lists. Banks have informed ATA that this is not the type of collateral that banks use to extend credit.”

Without independent documentation, Mitchell told Pajamas Media, “you would never be able to say that their mailing list was worth $15 million. A bank would have to discount the value. So a bank would have to say it was worth at least twice that to get to $15 million.” That, she emphasizes, does require an arms-length appraisal and documentation.

Pajamas Media contacted both the Democratic National Committee and Bank of America for comment and details surrounding the transaction. As of this posting, the DNC has not replied to our inquiries. A communications person from BofA did return our phone call but could not respond to our query. [Update: They did after the piece ran; see addendum below.] She promised she would get someone to respond.

Boehm and Mitchell point out that many campaigns frequently take out short-term, temporary loans as bridge loans until new contributions come in. Most promise to pay it off before the election. The BofA terms are different.

The bank states that the first payment of principal will not be required until February 28, 2011, well after the November elections. Final payment for the debt will not be required until December 2011. What if the party found itself in deep debt after losing one or both houses of Congress?

As of October 13, the DNC reported $13.5 million of cash on hand with debts of $7.7 million. Their total worth was $5.8 million with three more weeks of campaigning ahead. (The Democratic Congressional Campaign Committee took out an additional $17 million credit line on October 21.)

There is also the issue of whether on the eve of the loan, the Democrats altered their own privacy policy about sharing private donor data. On September 14, two days before executing the loan, the DNC changed its privacy policy web page. The site initially states that their privacy policy is not to share private data: “It is our policy not to share the personal information we collect from you.”

However, the site adds in its last line that indeed it might share private information if it is the result of an “asset sale or in any other situation where personal information may be disclosed or transferred as one of the assets of the DNC.”

Is it simply a coincidence that the last item of this section acknowledges the DNC might share private information as a result of an asset sale to a third party? Or was it added to accommodate the new collateralized loan?

Other Democratic Party web sites strictly forbid the sharing of their mailing lists unless authorized by the individual. For example, one local Democratic website directly state to its supporters: “We will not give, sell or rent your email address to any other organization unless you specifically authorize us.”

The Democrats’ long-time sweetheart relationship with the banking world and with the Bank of America in particular creates the appearance of an insider deal.

BofA was very generous to Barack Obama when he ran for President. Campaign finance records show that in the 2008 election cycle, Senator Barack Obama was the top recipient of Bank of America campaign donations, reaping $421,000.

BofA’s new CEO, who took over from embattled Kenneth Lewis, is considered one of the Obama administration’s top Wall Street allies on a whole host of issues, from the creation of a consumer regulatory agency to the defense of the administration’s home mortgage fiascoes.

Here’s what Bloomberg News reported about the Moynihan-White House axis last May when he was the number two at BofA:

“He has been willing to speak out bravely in his industry on the need for reform measures,” says Valerie Jarrett, Obama’s liaison to corporate America who has met with Moynihan at the White House several times. “And he has been willing to come to Washington and roll up his sleeves and work on the issue.”

The history between BofA and Democrats goes back years. One highly publicized political scandal linked the bank and Democrats to the subprime mortgage giant Countrywide Financial, which BofA acquired more than two years ago. Countrywide CEO Angelo Mozilo gave preferential below market mortgages to leading Democrats like Connecticut Senator Chris Dodd, the chairman of the Senate Banking Committee. After the disclosure of the mortgage favors, both Dodd and Senator Kent Conrad (D-SD) decided not to run for re-election.

Dodd and other Washington Democrats belonged to a group of VIP loan recipients known in company documents and emails as “FOAs” — Friends of Angelo, a reference to Angelo Mozilo.

“This (type of loan) isn’t something that’s generally offered to the general public, but it looks like it is something of a sweetheart deal,” observes Boehm about the new BofA credit line to the DNC. “Usually when you see this it is banks with a relationship with candidates and we see that all over the place. We saw that with Countrywide,” he told Pajamas Media.

Allowing third parties access to donor mailing lists as part of financial transactions can be tricky business. For years Democratic activists hounded Republican Sen. John Ashcroft about the third party use of his mailing list. The Federal Election Commission fined his campaign $37,000.

The issue may not play well with voters either. Getting an easy line of credit may not sit well with cash-starved small businesses that have sought loans during the bad economy — even when they tried to collateralize it with real, not abstract assets.

The question is, will the DNC come clean and open their books on the transaction?

Update:

Jefferson George, a Bank of America spokesman, responds:

First, the answer to the question raised in the headline – “Did the DNC Get an Illegal Campaign Loan from Bank of America?” – is no. We follow all Federal Election Commission guidelines in our financial transactions with political parties and apply the same underwriting standards to these organizations as we do to any other institutional borrower. We also work closely with outside campaign finance legal experts to structure and document these transactions. These agreements are required to be arms-length transactions, and we are very careful with how we underwrite these loans.

As I mentioned, we have always had relationships with committees that represent political parties on both sides of the aisle. Our banking relationship with the Democratic Party dates back more than 30 years, well before the current administration. We also have provided loans for Republican candidates and committees. For instance, we provided financing for Mitt Romney’s 2008 presidential campaign.

Regarding the loans to the DNC and DCCC, due to client confidentiality obligations, we can’t discuss specific loans publicly beyond what is disclosed by the FEC, and we would refer you to those individual organizations. We can say, however, that collateral for these types of loans may include many things, and donor lists usually are insignificant compared such security measures as blanket liens against all assets, including accounts receivable. This also assumes a client doesn’t have adequate cash flow from the collection of contributions. Other factors in considering a loan include a client’s history with repaying loans on time or ahead of schedule.

Update (5:10 PM PDT):

More from Jefferson:

Thanks for this. Saw the updated story. One clarification, and it was my error: We didn’t provide financing for Romney. Rather, we had — and have — a banking relationship, handling deposits and providing other cash management services. And that relationship is still active.

Update (8:00 PM PDT):

Richard Pollack adds:

The nub of the story is that Bank of America refuses to confirm that an independent appraisal was done for the issuance of two huge loans to the Democrats totaling $32 million. While the bank might wish to invoke confidentiality, in the post-partisan era promised by President Obama, transparency around this particular loan is vital. This is especially true if there are allegations of violations of law.

The scope of the BofA small business loan to the Democrats is breathtaking. According to CNN/Money, in 2009, the bank issued 308 loans to small businesses totaling $17.6 million and in 2010 it issued 185 loans totaling $22.8 million. So the size of the Democrats’ two loans dwarfs all loans to small businesses in each calendar year. I wonder how credit-starved small business owners would feel about these Democrat loans tonight.

In that CNN/Money article, Mr. George was interviewed, saying, “Among those seeking loans, the creditworthiness of many businesses has changed. Cash flow — the most important factor — often is down. The value of collateral, such as real estate or equipment, has decreased.”

Mr. George had it right. Collateral is everything. The public has a right to know what is the collateral behind the $32 million in loans. Otherwise, it can be regarded as a gift, and patently illegal under federal campaign finance laws.

(Update: 7:54 AM PDT, 10/28):

More from Jefferson:

Your last update at 8:00 pm ET is incorrect. The numbers you cite from the CNN/Money story are for SBA loans. That was clearly stated in the story, and SBA lending is a very small percentage of Bank of America’s total lending to small businesses. In 2009, Bank of America loaned $16.5 billion to small businesses. Through the third quarter of 2010, Bank of America loaned $13.9 billion to small businesses.

Beyond direct lending, Bank of America works with Community Development Financial Institutions (CDFIs) to provide financing and technical assistance to businesses that don’t qualify for traditional financing. As the leading financial institution supporting CDFIs, the bank provides $1 billion of capital – including more than $200 million to CDFIs that finance small businesses in lower-income communities. Bank of America also recently launched a grant program for CDFIs and other nonprofit lenders, aimed at unlocking $100 million in low-cost, long-term capital for small and rural businesses. To date, the bank has awarded grants that allowed CDFIs to access nearly $27.5 million in lending capital.

In addition, Bank of America has made a commitment to increase spending with small, medium-sized and diverse businesses. The bank’s pledge to purchase $10 billion in products and services from those suppliers over the next five years will provide much-needed income for those businesses. Finally, Bank of America recently announced it will hire more than 1,000 Small Business Bankers by early 2012. Based in communities across the U.S., these bankers will consult with small business owners, spend time at their offices and assess their companies’ deposit, credit and cash management needs.

(Update:7:56 AM PDT, 10/28): Richard Pollock responds:

Thank you for your additional comments on behalf of Bank of America. We will post them in full.

As for the substance of your comments:

Actually, I understated the case in your favor by citing the CNN/Money figures. These loans are not to your smallest business customers, which are really hurting in the credit crunch. It’s your biggest SBA (7) loan portfolio, which is the government backed loan program for small businesses through the Small Business Administration.

Your $32 million dwarfs those loans, many of which have been in trouble because of deterioration in collateralized assets. Your former CEO, Ken Lewis, has admitted this repeatedly. That’s why more conservative rules need to be applied in this economic downturn, not more relaxed standards. The Democratic National Committee and the DCCC will continue. No doubt. But its indebtedness after its most expensive and probably losing mid-term election cycle may put it in a precarious state until the presidential campaign. If may twist on an old financial cautionary warning: past performance is not a guarantee of future results. In 2010, the DNC and the DCCC may face substantial indebtedness and will have to repay the loan through 2012 as well as re-build their donor base.

I strongly recommend that your urge your clients, the DNC and DCCC, to be transparent and back up the collateral for their $32 million lines of credit. Failure to do so will only give the public the impression that there was a sweetheart deal here, and perhaps even the appearance of unlawful activity as well.


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