(bumped up Tuesday morning with significant breaking news on the new Stanford scandal, and the D.C. insiders involved)

Update: After Bernie Madoff, it appears that the next largest fraudulent investment scheme is centered on an entity known as Stanford Financial. This company has offices in Houston, TX and operated an offshore bank in the Caribbean. While this story is developing it is not surprising that the main principal, Allen Stanford, knew how to play the “Legalized Bribery” game we highlighted yesterday. Who benefitted from his millions in gifts and lobbying? Charlie Rangel (D-NY), Greg Meeks (D-NY), Bill Nelson (D-FL), Pete Sessions (R-TX), former CA governor Gray Davis, and the Democratic Party.

Texas Businessman Sought Influence in Corridors of Capitol

Quality business relationships are always mutually beneficial. If they are not mutually beneficial, then they will not thrive or perhaps even last at all. A strong business relationship, like any personal relationship, needs a dollar-signfoundation of honesty and integrity. As in any relationship, there will be plenty of instances in which the parties have disagreements and misunderstandings. If the relationship is strong enough, it can not only endure through these times but often grow stronger as a result of them. The challenge in any relationship is when one party is conflicted and attempts to serve two masters. These conflicted relationships – whether personal, political, social, or business – must change in order to grow or are doomed to languish and underperform if not die completely.

On Wall Street, a business that so grossly prioritizes short term profits versus long term customer relationships will not grow. Perhaps for a period of time the excess profits will be addicting and mesmerize management, but over time that model will not work. Bear Stearns is a classic example of this principle. From having worked there for 7 years in the 90s, I evidenced it firsthand.

Measuring and assessing the nature of relationships in Washington is extremely challenging. While our elected officials on both sides of the aisle tell us one thing, the backroom dealings, heavy lobbying, and quid pro quo generate tremendous frustration on behalf of the electorate. Are our elected officials oblivious to the details of critical issues and thus ineffective in serving the public interest? I do think this lack of understanding is a serious problem but it is not the biggest problem. The fact is that the business of Washington is a BIG business and the elected officials are the beneficiaries of the largesse bestowed upon them from heavy money lobbying.

Why is it that legislation to support the banking industry does not have clearly stated restrictive covenants? Why is it that a large “stimulus” bill is so loaded with earmarks and lacks real meaningful IMMEDIATE stimulus? Very simply, our politicians on both sides of the aisle are beholden to those moneyed interests who put them in Washington in the first place. Is it truly any wonder why Congress has near single digit approval ratings? It shouldn’t because they are not working for the electorate, they are working for the lobbyists. While President Obama talks about “change” across the board and specifically in regards to lobbying, his campaign and initial maneuvers raise serious doubts about his integrity on this front.

These issues are highlighted in a Boston Globe review of the book, So Damn Much Money written by Robert G. Kaiser. The Globe offers:

Today, members of the House and Senate routinely spend “a fourth or a third of their working hours soliciting those campaign contributions” that once would have “looked a great deal like bribes.”

Kaiser corroborates his findings with the observations of a host of seasoned and savvy Washington insiders. A few will suffice to make the point:

— Former Nebraska Republican senator Chuck Hagel told Kaiser, “There’s no shame anymore. . . . We’ve blown past the ethical standards; we now play on the edge of the legal standards.” Hagel comes to believe that “money and its pursuit [have] paralyzed Washington . . . Nothing truly important for the country [is] getting done.”

— Leon Panetta, a former member of Congress, Chief of Staff in the Clinton White House, and Obama’s newly confirmed CIA director, says that “legalized bribery has become part of the culture.” Members of Congress “rarely legislate; they basically follow the money . . . They’re spending more and more time dialing for dollars.” Panetta laments the quality of people now running for Congress, echoing the conclusion reached by Hagel and other old hands: “It’s all about winning, it’s not about governing anymore.”

Stimulus? Financial Stability Plan? Bipartisan interaction? Campaign finance reform? No, Congress is too busy collecting money to worry about these issues. In point of fact, after having sent my opinion about the stimulus proposal to my new Congressman Jim Himes (D-CT), his office did respond electronically thanking me for my message and simultaneously asked me for a campaign donation for his re-election in 2010. Something is seriously wrong here!!


P.S. For those who care to read more about the incestuous nature of these Washington relationships, a reader was gracious enough to share this link of an interview Bill Moyers had with Simon Johnson, former chief economist for the International Monetary Fund.

  • C.S.

    People were screaming about the stimulus bill but we were completely ignored

    Just like these same politicians ignored our screaming about the way Hilary Clinton was treated by them during the 2008 election process. They told us “obama” would be “good” – historical – for us and now they are telling us this stimulus will be “good” for us and yet nothing’s changed. The same old politicians are still calling the shots and the same old Chicago style Obama politics of greed and power is even worse than Bush’s cronyism politics. We’ve become The Invisible People in a “Red Queen” world!

  • Katmoon

    This article goes into how there is now a network in place by Acorn(recall posters who said they would get nothing from the stimulus?) Kinda pissed me off, I must say.

    Effort Takes Shape to Support Families Facing Foreclosure

  • lizzy

    The way it sounds we’re going to need that drum banging. Great article; you clearly defined one of the major problems we face. People were screaming about the stimulus bill but we were completely ignored in favor of those who could buy what they wanted. It was almost frightening the way each party voted in lock step. Of course if there is no discussion there isn’t much basis for dissent. I’ll be watching for your next article.

    • LD

      thanks for the plug!!

  • Choo Choo Magoo

    Excellent post LD.

    I read the Moyers’ transcript, but the video – wow. Will be watching the frontline tonight. I don’t understand all the complexities of these markets and transactions, but I’ve come to trust my instincts when something feels majorly off and all of this market stuff has been giving me that sick feeling Mr. Johnson talked about – for a long time.

    I really appreciate your willingness to bang the drum loud and long.

    • Choo Choo Magoo

      I really appreciate your willingness to bang the drum loud and long.

      Make that

      I really appreciate your dedication to banging the drum loud and long.

      • LD

        Don’t you worry about my banging….only just begun!!

  • Mercedes

    I agree with the opinions expressed here. I would be very interested to see a list of Senators and Representatives who are notable exceptions to the current culture…if there are any. Dennis Kucinich and Ron Paul are two who come to mind and they seem to be generally treated as fringe people by the media and opinion makers. Who are the rest of them, I wonder. Also, I am very, very puzzled by Leon Panetta. What is he doing running the CIA? He is supposed to have in-depth budgetary experience and he is running the CIA in a spendthrift Obama administration!? There has got to be a good story there for a good investigative journalist.

  • Thank you LD — for yet another timely article.

    The obots come — ’cause they can’t handle the truth — they try to redirect the discussion.

    Your article at the top — also insightful and helpful to understand what’s happening.

  • I’m a Linda too

    Great post LD.

    And, speaking of bribery from our politicians. Today in our local paper notes, even though we have a FREEZE on employment in the state of NM since November, Governor Richardson has created 109 new jobs.

    Yes, the latest is a new Counsel position for “Economic Development Dept” for a former aide who recently worked on Obama’s campaign as counsel.

    They are asking for cuts from the employees, not giving the resources or positions to actually help the citizens or the state, asking to cut “on call time” because they don’t have enough employees to cover the time, then “cabinet level persons” making purchases of about a million dollars in a contract for something the dept it’s going to can’t even USE (more kickbacks) and not give their employees a raise that is due them for a job they’ve been doing for year?

    Auuuhhhh bribery, the new trickle down, and strong in NM.

  • I’m a Linda too

    LD wrote: “On Wall Street, a business that so grossly prioritizes short term profits versus long term customer relationships will not grow”

    Most of us know this, right? So how in the HECK did I hear that supposed “money expert” on CNN’s HLN this morning make the claim that one of the reasons the stock market may be in such a bad way is because “you know, they look at long term, 6 months to a year ahead, not at whats happening now”. WTF? That IS what they do. And even Al Gore warned about this a year ago telling them they will have more success and things would be better if they start planning long term, calculating effects, costs, etc.

    And these yahoos they put on our tv’s are supposed to be experts?

  • AlexisM

    Obama has no integrity, none. By now, that’s not even up for discussion. And I can’t believe a troll came here to lie about Obama’s involvement with Fannie and Freddie. Good lord. These people are all criminals and need to go.

    • Texas Playwright

      Yeah, let’s ignore the troll. Don’t feed them and they’ll go elsewhere.

  • Peggy Sue

    Yes, thanks for the article, Larry. I always feel I’m learning something. Or being reminded of something I need to keep in mind. As for Obama’s integrity? I had real doubts about that at the start, and Congress sold its soul long ago.

    Which leaves the rest of us blowing in the wind. And how telling was your last example:

    “In point of fact, after having sent my opinion about the stimulus proposal to my new Congressman Jim Himes (D-CT), his office did respond electronically thanking me for my message and simultaneously asked me for a campaign donation for his re-election in 2010.”


  • bert

    Excellent post, Larry. I have felt for more than a few years that republicans and democrats are just the flip sides of the same corrupt coin and the stench from that system permeates and spoils our Republic. And it may finally and sadly lead to our total collapse and fall.

  • oowawa

    Ah yes. As we watch the markets drop like a stone this morning, I looked at my usual blogs for solace. I like to read Karl Denninger, because, even though I don’t understand all of his finer points, he usually matches my mood, which is very very ANGRY:


    Among his thoughts for this morning’s sermon:

    We got here as a consequence of government idiocy. If government does not stop behaving like Moe, Larry and Curly we will watch Europe implode, we will try to backstop the EU and Asia via our swap lines and we will go down with them. Swaps have blown out this morning which indicates that despite all the “attempts” to inject stability we have failed.

    • Peggy Sue

      Thanks for the Denninger link, oowawa. All I can say is:


      Just when you think it cannot get any worse. It

      The market’s off 247+ [7596] and it’s only 11 a.m.

      It’s time to put up or shut up.

  • Bazooka

    The only real way to fix the system is to do what they do in Canada. The government has to fund the candidates entirely. Each candidate equally gets say $100 million and that is it. Then you have to band all other advertising from PACs and other groups. However, you will get the big argument about free speech and civil liberties.

    • Linda C.

      At least hold the PAC’s to some accountability for what they say. The SEICU put out an ad in Ohio during the primaries explaining Hillary Clinton’s health plan and saying it was Obama’s.

    • tek

      In the U.S.a system like that could never get implemented because the corrupt Congress critters would have to vote it in. Ain’t gonna happen.

    • beebop

      There is always an 0bama in the wings who comes up with some convincing whine about penalizing his supporters. Imagine that money propping up this country instead of selling us this poop salesman … I want to cry at the thought.

    • Snickers

      Bazooka, I’m sure you’re idol, That One, would be so willing to abide by something like this – just like he used public financing this last election. What a joke – both you and That One. Unfortunately, my sense of humor has become impaired and I don’t find That One’s antics in the least humorous. And while I agree that no bid contracts given to Haliburton were an absolute scam and corrupt, I still think this stumu-less package was a crap sandwich, like many others here. It’s not stimulating and since most of the funds are released at a future date, what sorts of employment is it going to create? Most of these should have gone under an appropriations bill and been thoroughly debated (and rejected) in congress.
      You’re right, LD, our members of congress don’t really represent the people at all any more. I was thoroughly disgusted to see the people of California and Massachusetts re-elected Pelosi and Frank. Another joke on the rest of us.
      But thanks LD, for keeping us informed. I read all your articles very closely and always look forward to the next one.

      • SoCalDem

        Don’t blame all californians for Pelosi, you can blame San Francisco cause thats her district. The rest of us don’t get to vote for or against her. If so she wouldn’t be in office.

  • allimom99

    Thanks again, Larry, for another thoughtful post. I have enjoyed reading the sane observations of someone who’s been there. By all means, if you haven’t seen the Simon Brown piece, check it out, and his website as well. Obama should have this guy on his team.

  • Sassy

    Excellent commentary LD!
    We need to take off the blinders and shine more light on the truth.
    The culture of Washington D.C. is not corrupting the politicians…the politicians are corrupting the culture of D.C.!

  • Linda C.

    It is also our expectations. If a candidate raises allot of money, we consider him or her much better than the candidate that doesn’t. It doesn’t matter in the end how that candidate actually got the money. As long as we permit large amounts of money to run political campaigns, then those who are good at raising money from whatever avenues will be the successful politicians.

    There is nothing wrong with lobbying or necessarily lobbyists. Every time you write your representative you are lobbying. However, it comes back to money. We as a culture have more respect for money and things above all else. It is we, as a culture, who set the priorities of this culture. We give in to our kids who are manipulated by the market forces. Who is being the adult here?

    Sherrod Brown’s mother died, BTW. I am glad the stimulus package passed. It isn’t perfect, but I do think it will be a better use of our tax-money than giving no-bid contracts to Haliburton.

  • mdmom

    Thank you Mr. Doyle. I have enjoyed reading your posts on No Quarter and this was one was no exception. I was so impressed that I sent it to my Senator, Sherrod Brown (OH), who you may not know was flown into Washington all by his lonesome on a government jet to sign and seal the “deal” known as the stimulus package (apparently he was not present initially due to a death in the family).

    • allimom99

      I can’t believe they made Sen Brown fly back for the vote, but then Obama waits $ DAYS to sign the damn thing. If I am Sherrod Brown, I might not be so kindly disposed to going along with the program after this insult. Condolences to him and his family – he’s a good man and didn’t deserve to be used in this way.

  • wodiej

    From my personal observations and assessment of such, our society has morphed into a massive, twisted ball of yarn of unaccountability. Where some people will do what is right, proper, fair and responsible for the simple virtue of it. Others have to have a threat of punishment/pain in order to do what is right. Problem is, society is not punishing wrongdoing appropriately. Victims are treated as the criminals and criminals as victims.

    Parents have raised a bunch of brats because they had a midlife crisis and didn’t want to cut the apron strings to their kids. So they used material possessions and no oversight to keep them at home longer and/or stay in their good graces so they would come around more. The kids don’t respect the parents or anyone else.

    Those of us with sense can only continue to live responsibly. The people who live without unaccountability will suffer by their own actions.

    Wall St. is surely the worst of greed and dishonesty. But many companies including car dealerships, furniture stores etc, have been bilking customers with their overpriced products, much of it of poor quality and made overseas for pennies on the dollar. Then bring it back here and charge prices like it was made w US labor. The honest people are once again getting SCREWED.

    • tek

      wodiej: I agree. It seems like all the government in this country is about anymore is for the politicians to get rich. They don’t care what kind of terrible society they create for the voters–they don’t have to live in it. We are now on our second illegitimate president who is handing all the public funds over to his cronies and special interest groups who voted for him at the expense of everyone else. This president isn’t even handing the treasury funds to his cronies because there are no funds in the treasury. He’s borrowing money to pay them off. This is why the Clintons campaigned so hard and refused to give up. They knew what Obama would be about. So what’s the answer to get a responsible government?

  • Bazooka

    I agree a great interview with Simon Johnson of MIT on Bill Moyer. Not sure I would be as harsh as you are, as I would not put all institutions and politicians in the same boat, but I think generally your point is right about big money in politics. It has been the problem that everyone has acknowledged for a very long time. A very very tough problem to fix. Something Obama is finding out, although I do not think he is naive to the power of big money, but at least he has publicallly stated and made some attempts to break the lobbyist mold. Sure we would like to see things happen in the first month, but it is going to take a very long time to change the Washington mentality.

    • LD

      The fact that Barack Obama collected the 2nd largest amount of money from Freddie and Fannie, and accomplished that in the course of 4 years, indicates that he knows how to play this game VERY well.

      The fact that he proposes newly defined lobbying rules and in short order allows those rules to be sidetracked also indicates he continues to play the game.

      • Bazooka

        Actually your claim that Obama took the second most money from Freddie and Fannie is not correct. A complete fabrication and a lie.

        I assume you are refering to the Center for Reponsive Politics blog report. First, corporations are not allowed to give campaign contributions to candidates. Second, Obama actually received the second highest contributions from individuals who work for those two institutions. Very different than receiving money from a lobbyist, as you infer. Given how popular Obama is and that he won the election, it is not surprising that a lot of individuals that work for these two large institutions would given donations to Obama.

        Your point proves absolutely nothing. It is like saying lets look at all the contributions from employees at McDonalds. Say Clinton got the most contributions from all the 10,000s of people who work at McDonalds, so oh my god Clinton now owes the lobbyists or McDonalds something. No it just means that Clinton was the most popular candidate with the employees at McDonalds.


        • Sounds like you’re making a Twidleedee v. Twidleedum comparison. That is ethical hair-splitting.

          • Bazooka

            Ethical hair splitting…??? What? you have to be kidding! So what are you suggesting. We should look at every single company in America and see how their employees contribute to political campaigns and then say, which ever candidate that company’s employees gave to the most to then that company is actually lobbying for that candidate… sound like a bunch of BS, is undemocratic and unAmerican!

            • bert

              Have you ever heard of bundling?

              • i don’t think they have…

                • beebop

                  They have heard of bundling, they just deny it’s application to 0bomba. Anything that might possibly be uh um uh …. not in keeping with the uh um millions of little people meme is not going to make it to the evening news until spittle and tingles and some of their ilk start to lose their jobs.

                  Oh. And as far as the “ethical” politicians wanting to donate the donations to charity … how about donating it to the people who freaking lost money on your watch? How about those people you liars?

                  • RedDragon62

                    Seems like Bazooka has an answer for all things Obama! You seem like an intelligent person Bazooka. “Free your mind and your ass will follow!”

              • Bazooka

                Bundling does not make sense and I am not sure I understand your point.

                Individual’s can only give a max of $2,400 to individual candidates and PACs can only give a max of $5,000 to individual candidates.

                Since 95% of all Fannie and Freddie related contributions came from individuals, there was almost no bundling of Fannie and Freddie campaign contributions to Obama. Only $6,000 was given by Fannie and Freddie related PACs, so where is the bundling. Go look at the data.

        • LD

          Stop it….your opinions are welcome but your pandering is ridiculous. I know those institutions very well and your attempt to provide cover on Obama collecting significant funds from them is totally transparent.

          See whether it is Freddie or Fannie or Bear or any other financial institution, management makes the rounds and puts the cuffs on the employees to give. You don’t need to give but it is STRONGLY encouraged!!

          Nice try. We’re smarter than that here.

        • Obama: Dubya II Electric Boogaloo

          So by the Obots own logic…

          When “individuals” in corporations give to the GOP then that’s proof the Reps are bought and sold by evil corporations, but when “individuals” give to the Dems it’s because the Dems are a shining example of collective action against evil corporations.

          This stereotype that the GOP is bad nasty evil party of the rich and the Dems are the wonderful defenders of the little guy is getting old and now has no basis in reality. The Dems are just as bought and sold as the GOP, but that conflict with Obama’s hopey changey feely message.

        • getfitnow

          Bazooka, yes, he received donations from individuals that worked for these corporations, but also from the corporations’ PACs.