IN THE PREDAWN TWILIGHT of December 4, 2012, Randy Richardville, the Republican majority leader of the Michigan Senate, called an old friend to deliver some grim news. Richardville's two-hour commute to the state capitol in Lansing gave him plenty of time to check in with friends, staff, and colleagues, who were accustomed to his early morning calls. None more so than Mike Jackson.
Jackson and Richardville had grown up in the auto town of Monroe, 40 miles south of Detroit. Jackson now headed Michigan's 14,000-member carpenters and millwrights' union, which had endorsed Richardville, a moderate Republican, for 10 of the 12 years he'd served in the state Legislature.
"Guess where I was last night," Richardville said.
Jackson wasn't in a guessing mood—and it wasn't just the early hour. Since the election a few weeks earlier, Republicans had been aiming to use the current lame-duck session to ram through a controversial piece of legislation known as right-to-work. Such laws, already on the books in 23 states, outlawed contracts requiring all employees in a unionized workplace to pay dues for union representation. Jackson and other labor leaders were scrambling to head off the bill, widely regarded as a disaster for unions. Richardville, who had once told a hotel conference room filled with union members that right-to-work would pass "over my dead body," was one of the votes they'd counted on.
Richardville said he'd spent the previous evening at a fundraiser in western Michigan. At one point during the event, he was escorted into a private room where a dozen wealthy business moguls were waiting for him. Some he recognized as heavy hitters in Michigan politics; others had flown in from out of state.
One of the men in the room glared at Richardville. "You gotta grow a set and move this legislation," the man said, referring to right-to-work. Had he ever run for office? Richardville asked. The man said no. "Well, when you grow a set and give that a try," Richardville snapped, "then you can talk about the size of my testicles."
Jackson was wide awake now. "Good for you," he said. "How'd it end?"
"Mike, you're fucked," Richardville said. "They've got all the money they need, they're going up on the air, and they're going to push this freedom-to-work thing."
Wasn't there some way to head off the bill? Jackson asked. "They've got my caucus," Richardville replied. "You can't imagine the pressure I'm under."
DeVos has given a road map to conservatives working to bring down labor and defund the left—and his reforms could help put the state in the GOP's column come 2016.
The pressure came largely from one man present at that fundraiser: Richard "Dick" DeVos Jr. The 58-year-old scion of the Amway Corporation, DeVos had arm-twisted Richardville repeatedly to support right-to-work. After six years of biding their time, DeVos and his allies believed the 2012 lame duck was the time to strike. They had formulated a single, all-encompassing strategy: They had a fusillade of TV, radio, and internet ads in the works. They'd crafted 15 pages of talking points to circulate to Republican lawmakers. They had even reserved the lawn around the state capitol for a month to keep protesters at bay.
A week after Richardville's early morning call to Jackson, it was all over. With a stroke of his pen on December 11, Gov. Rick Snyder—who'd previously said right-to-work was not a priority of his—now made Michigan the 24th state to enact it. The governor marked the occasion by reciting, nearly verbatim, talking points that DeVos and his allies had distributed. "Freedom-to-work," he said, is "pro-worker and pro-Michigan."
THE DEVOSES sit alongside the Kochs, the Bradleys, and the Coorses as founding families of the modern conservative movement. Since 1970, DeVos family members have invested at least $200 million in a host of right-wing causes—think tanks, media outlets, political committees, evangelical outfits, and a string of advocacy groups. They have helped fund nearly every prominent Republican running for national office and underwritten a laundry list of conservative campaigns on issues ranging from charter schools and vouchers to anti-gay-marriage and anti-tax ballot measures. "There's not a Republican president or presidential candidate in the last 50 years who hasn't known the DeVoses," says Saul Anuzis, a former chairman of the Michigan Republican Party.
Nowhere has the family made its presence felt as it has in Michigan, where it has given more than $44 million to the state party, GOP legislative committees, and Republican candidates since 1997. "It's been a generational commitment," Anuzis notes. "I can't start to even think of who would've filled the void without the DeVoses there."
The family fortune flows from 87-year-old Richard DeVos Sr. The son of poor Dutch immigrants, he cofounded the multilevel-marketing giant Amway with Jay Van Andel, a high school pal, in 1959. Five decades later, the company now sells $11 billion a year worth of cosmetics, vitamin supplements, kitchenware, air fresheners, and other household products. Amway has earned DeVos Sr. at least $6 billion; in 1991, he expanded his empire by buying the NBA's Orlando Magic. The Koch brothers can usually expect Richard and his wife, Helen, to attend their biannual donor meetings. He is a lifelong Christian conservative and crusader for free markets and small government, values he passed down to his four children.
Many buildings in Grand Rapids, like the Amway Grand Plaza Hotel, bear the name of Richard DeVos Sr. or his company. Rex Larsen/Grand Rapids Press/AP Photo
Today, his eldest son, Dick, is the face of the DeVos political dynasty. Like his father, Dick sees organized labor as an enemy of freedom and union leaders as violent thugs who have "an almost pathological obsession with power." But while DeVos Sr. simply inveighed against unions, Dick took the fight to them directly, orchestrating a major defeat for the unions in the cradle of the modern labor movement.
Passing right-to-work in Michigan was more than a policy victory. It was a major score for Republicans who have long sought to weaken the Democratic Party by attacking its sources of funding and organizing muscle. "Michigan big labor literally controls one of the major political parties," Dick DeVos said last January. "I'm not suggesting they have influence; I'm saying they hold total dominance, command, and control." So DeVos and his allies hit labor—and the Democratic Party—where it hurt: their bank accounts. By attacking their opponents' revenue stream, they could help put Michigan into play for the GOP heading into the 2016 presidential race—as it was more than three decades earlier, when the state's Reagan Democrats were key to winning the White House.
More broadly, the Michigan fight has given hope—and a road map—to conservatives across the country working to cripple organized labor and defund the left. Whereas party activists had for years viewed right-to-work as a pipe dream, a determined and very wealthy family, putting in place all the elements of a classic political campaign, was able to move the needle in a matter of months. "Michigan is Stalingrad, man," one prominent conservative activist told me. "It's where the battle will be won or lost."
STEP OFF THE JET BRIDGE at the Gerald R. Ford International Airport in Grand Rapids, and the DeVos imprimatur is everywhere. Leaving the airport you pass the West Michigan Aviation Academy, a charter school founded by Dick DeVos in 2010. In Grand Rapids itself, there's the DeVos Place convention center, the DeVos Performance Hall, the DeVos Graduate School of Management, the Helen DeVos Children's Hospital, the Richard and Helen DeVos Center for Arts and Worship, the DeVos Communication Center at Calvin College, and the DeVos parking lot at Grand Valley State University.
I grew up not far from Grand Rapids, and the DeVos name was never far from mind. I heard it on the radio and at the dinner table—my parents are both teachers, and the DeVoses' education reform efforts were a topic of discussion. In western Michigan, the DeVoses were the closest thing we had to Carnegies or Rockefellers.
Populated by the descendants of devout Dutch immigrants, Grand Rapids is a deeply Christian enclave that locals call "GRusalem." Once a city of furniture makers, Grand Rapids began to prosper in the 1970s and 1980s, thanks largely to Amway. Launched in an abandoned gas station, the company grew into an empire by enlisting an army of "independent business owners," or IBOs, to peddle Amway's wares, eventually expanding to more than 100 countries and territories. The company formulated the business model now used by the likes of Mary Kay, Avon, and Herbalife, in which salespeople earn money by recruiting others into the business. In 1975, the Federal Trade Commission accused Amway of operating a pyramid scheme, but after a years-long investigation the agency rescinded the charge.
From the start, DeVos and Van Andel infused Amway—short for "American Way"—with their Christian beliefs and free-market principles. The Institute for Free Enterprise, a think tank run out of Amway's headquarters, organized workshops nationwide to help teachers incorporate free-market economics into their lesson plans. During the 1970s, Amway bought ads in major newspapers that railed against taxation and regulation. Together, DeVos and Van Andel also helped to launch the now-defunct Citizen's Choice, a conservative counterweight to the good-government group Common Cause. A smattering of headlines in the centerfold of Amway's 1980 corporate magazine captures the company's institutional philosophy: "Entrepreneur DeVos Preaches Self-Help: GOVERNMENT MEDDLING ASSAILED." "Taxes and Government Rules Destroying Free Enterprise—Van Andel."
Amway's success and its conservative ethos catapulted both the elder DeVos and Van Andel into the highest reaches of Republican politics. Van Andel, who died in 2004, chaired the US Chamber of Commerce in 1979 and 1980, and he gave millions to Republican and conservative organizations in his lifetime. DeVos, meanwhile, was an early member and funder of the Council for National Policy, a secretive network of hardline conservative leaders founded by Left Behindauthor Tim LaHaye. Ahead of the 1980 elections, Ronald Reagan personally asked DeVos to lead the GOP's national fundraising efforts. Short on cash and reeling from Jimmy Carter's election and the aftershocks of the Watergate scandal, the party needed all the help it could get. As the Republican National Committee's finance chairman, DeVos raised $46.5 million ($132 million in today's dollars).
He fit the part of GOP rainmaker-in-chief, wearing a diamond pinkie ring and Gucci loafers, driving a Rolls-Royce, and frequently commuting to his nearby office by helicopter. He once docked Amway's $5 million yacht on the Potomac River in Washington to hold court with Michigan's congressional delegation, RNC staffers, and personnel from 12 embassies representing countries where Amway did business. DeVos was also a strident voice within the party: In an era when Republicans still courted labor, he urged the GOP to ignore union members. "If they want to be represented by somebody else," he once said, "good for them." At a party meeting in 1982, he called the recession that was spiking inflation and unemployment "beneficial" and "a cleansing tonic" for society.
The RNC canned him soon after, but that didn't stop DeVos and his clan from steering hundreds of thousands of dollars into Reagan's 1984 reelection effort and George H.W. Bush's 1988 campaign. On the eve of the 1994 elections, Amway made a $2.5 million soft money contribution to the Republican Party; it was the largest corporate donation ever recorded. Amway also galvanized its 500,000-plus sales force into a massive political network, drumming up hundreds of thousands of dollars in contributions for favored candidates like Rep. Sue Myrick (R-N.C.), a former Amway saleswoman and the first female chair of the ultraconservative Republican Study Committee.
In late 1992, Dick succeeded his father as the president and CEO of Amway, aggressively expanding the company into Asian markets like China and Korea, which produce much of Amway's profits today. His wife, Betsy, an heiress to a Michigan auto parts fortune, hailed from a conservative dynasty of her own; her father, Edgar Prince, was a founder of the Family Research Council. (Betsy's brother is Erik Prince, the ex-Navy SEAL who founded the infamous private security company Blackwater.) Together, Dick and Betsy formed Michigan's new Republican power couple.
Betsy, who is 56, is the political junkie in the relationship. She got her start in politics as a "scatter-blitzer" for Gerald Ford's 1976 presidential campaign, which bused eager young volunteers to various cities so they could blanket them with campaign flyers. In the '80s and '90s, Betsy climbed the party ranks to become a Republican National Committeewoman, chair numerous US House and Senate campaigns in Michigan, lead statewide party fundraising, and serve two terms as chair of the Michigan Republican Party. In 2003, she returned at the request of the Bush White House to dig the party out of $1.2 million in debt. A major proponent of education reform, Betsy serves on the boards of the American Federation for Children, a leading advocate of school vouchers, and Jeb Bush's Foundation for Excellence in Education, which supports online schools.
Through the '70s and '80s Dick worked his way up at Amway and, like his father, rose to prominence within GOP circles thanks to his prodigious fundraising, generous political contributions, and his perch atop the family's multibillion-dollar company. In 1998, he launched a PAC called Restoring the American Dream, which then-House Majority Leader (and former Amway salesman) Tom DeLay credited with playing "an essential role" in preserving GOP control of the House in 1998 and 2000. DeLay, Myrick, and three other House Republicans who had been Amway salespeople created an informal "Amway caucus."
"Kids tend to bully with their mouths and fists," says one Republican lawmaker targeted by the DeVos family. "Billionaires tend to bully with their pocketbooks."
The DeVos name carried plenty of weight in Washington, but the clan loomed especially large in Michigan, and had opportunities to exert its influence in ways big and small. Once, Betsy complained to her hometown newspaper, the Grand Rapids Press,after an April 2004 story reported that she had blamed "high wages" for Michigan's economic woes—a comment that touched off a statewide controversy. As unhappy as she was, there wasn't much chance she'd been misquoted: The reporter had taken the language out of an official Michigan GOP press release and had even given Betsy a chance to respond to her own words. Mike Lloyd, then the Press' editor, says that while he doesn't recall the details of DeVos' grievance, it's likely he heard her out. Ultimately, the paper ran an unusual mea culpa saying the article had "oversimplified" the remarks while "distorting her original meaning." (In general, Lloyd denies the family ever used its "economic muscle…to attempt to influence or change" the paper's coverage.)
Mike Pumford knows what it's like to be on the wrong side of the DeVoses. A former high school teacher and public school administrator, he was elected to the state House in 1998 as a moderate Republican, and he publicly opposed Dick and Betsy's push to expand charter schools and introduce school vouchers. (In 2000, Dick and Betsy helped underwrite a ballot initiative to expand the use of vouchers and lost badly.)
When Pumford ran for reelection in 2002, a DeVos-funded group called the Great Lakes Education Project blanketed his rural district with glossy flyers calling him a puppet of the Michigan Education Association and a "tax-and-spend Republican" for backing an increase in cigarette taxes. "They just kicked my ass in that election," he says. And though he eked out a victory, the DeVoses got the final word. When Pumford asked for the chairmanship of the subcommittee overseeing public education funding, he says, then-House Speaker Rick Johnson told him there was "no way in hell we can give it to you." Why? It would piss off the DeVoses. (Johnson did not respond to requests for comment.)
In 2004, Pumford quit politics in disgust. "I spent a lot of time fighting bullies," he told me. "Kids tend to bully with their mouths and fists. Billionaires tend to bully with their pocketbooks."
FOR DICK DEVOS, the fight over right-to-work started with a humbling defeat. In 2006, he ran for governor of Michigan, spending $35 million of family money—the most ever spent on a gubernatorial campaign in the state—only to be routed by incumbent Jennifer Granholm. His timing was terrible: Thanks to Iraq War weariness and a series of GOP scandals, not one Republican beat an incumbent Democrat in a congressional or gubernatorial race anywhere in America that year. Postelection, DeVos turned down offers to run the state party and ducked out of the political limelight to ponder his next move.
The following year, he and a close ally, Ron Weiser, whose prolific fundraising had earned him the US ambassadorship to Slovakia under George W. Bush, hired Republican pollster Bill McInturff to gauge Michiganders' views on a range of issues. According to Weiser, McInturff came back with a surprising result—his polls showed nearly 70 percent support for right-to-work. DeVos and Weiser shared their findings with donors and operatives statewide, quietly brainstorming about how to capitalize on those numbers.
Dick DeVos concedes the 2006 gubernatorial election, accompanied by his wife, Betsy, and three of their children. Carlos Osorio/AP Photo
Despite declining membership, nearly 20 percent of Michigan's workforce belonged to unions and, as in other union-heavy states, right-to-work had long been a right-wing fantasy. For decades, the lone voice on the issue was the Mackinac Center for Public Policy, a state-level think tank founded in 1987 to spread free-market ideas and antagonize the unions. (In a June 2011 email obtained by Progress Michigan, a Mackinac Center staffer told a state lawmaker: "Our goal is [to] outlaw government collective bargaining in Michigan, which in practical terms means no more MEA.") The DeVoses are among the center's biggest financial backers, and Dick served on its board of directors. Still, despite a flurry of policy briefs and op-eds produced by the Mackinac Center, the issue remained a nonstarter. "We never had the sense that the votes were there to get it done," John Engler, the former governor, told the National Reviewin 2012. "A lot of Republicans weren't ready to deal with the issue. Labor was too strong."
Studying McInturff's polling numbers, DeVos and Weiser saw a shift in the political winds. Early in 2008, they dined in Washington, DC, with former Oklahoma Gov. Frank Keating, who in 2001 became the first governor in nearly a decade to sign a right-to-work bill into law. He knew just how fierce the fight could be. Keating advised DeVos and Weiser to hold off on right-to-work until they'd elected a Republican governor and, ideally, taken full control of the Legislature. (Democrats controlled the state House at the time.) "That resonated hugely with Dick," says one friend. "He said, 'I'm for this, but until we have a governor who's going to champion it, we need to bide our time.' So it went on the shelf."
In 2009, with DeVos' help, Weiser was elected as the state GOP chair, and he led the party to a landslide in 2010, winning every state-level race. But the new Republican governor, Rick Snyder, resisted right-to-work, saying repeatedly it was "not on my agenda." Watching his fellow Class of '10 governors—especially Scott Walker in neighboring Wisconsin—clash with organized labor dampened Snyder's enthusiasm for the "very divisive" issue.
But some of the Legislature's Republican members wanted this fight. A small but vocal group of them had campaigned on right-to-work and agitated for the issue as soon as the 2011-12 session convened. "It was kind of like the kid on the way to Disney World saying, 'Are we there yet? Are we there yet?'" recalled Republican state Sen. Patrick Colbeck.
A new political consulting firm with deep ties to the Koch brothers has quietly set up shop in Arlington, Virginia. Its mission: to prevent future Todd Akins and Richard Mourdocks from tanking the Republican Party's electoral prospects. The firm, named Aegis Strategic, is run by a former top executive at Charles and David Koch's flagship advocacy group, Americans for Prosperity, and it was founded with the blessing of the brothers' political advisers, three Republican operatives tell Mother Jones.
The consulting firm plans to handpick local, state, and federal candidates who share the Kochs' free-market, limited-government agenda, and groom them to win elections. "We seek out electable advocates of the freedom and opportunity agenda who will be forceful at both the policy and political levels," the company notes on its website. Aegis says it can manage every aspect of a campaign, including advertising, direct mail, social media, and fundraising.
Aegis' president is Jeff Crank, a two-time failed Republican congressional candidate who ran the Colorado chapter of Americans for Prosperity and served as the chief operating officer of the national organization. The firm's six-person staff boasts two others with connections to the Kochs. The group's lead strategist is Karl Crow, a former project coordinator for the Charles G. Koch Charitable Foundation, where he focused "on how political advocates for economic freedom are identified, trained, and promoted," according to his bio on Aegis' website. Crow, who was scheduled to speak at an invite-only Koch donor summit in 2010 on the subject of voter mobilization, subsequently worked for Themis, the Koch brothers' voter microtargeting operation. Brad Stevens, the former state director for Americans for Prosperity-Nebraska, is Aegis' director of candidate identification.
Crank has touted his firm's connection to the Kochs in meetings with potential business partners, according to three people who've spoken with him about this new venture. They say he has promoted Aegis as having the approval of the Koch brothers' political operatives. (A spokesman for Koch Industries did not respond to a request for comment about the Kochs' ties to Aegis.)
In an interview, Crank downplayed his company's Koch connections but did not dispute the accounts of those who say he mentioned Aegis' Koch affiliation. "I think there's some kind of an assumption that there is [a Koch connection]," Crank said. "It's not a large leap for anybody to make." Crank said he launched Aegis after seeing Akin, Mourdock, and other Republican candidates bumble their way through the 2012 campaign and cost the GOP seats in Congress.
Aegis Strategic's first client is Marilinda Garcia, a 31-year-old Republican serving her fourth term in the New Hampshire House of Representatives. Last November, she launched a bid for Congress, hoping to oust freshman Democrat Rep. Ann Kuster. Garcia, who has been loudly praised by her state's Americans for Prosperity chapter, declined to comment. Crank told Mother Jones that Aegis will announce new clients in the coming months.
People who've spoken with Crank about Aegis say he told them that the firm has access to the Kochs' formidable donor network, and Aegis' website appears to allude to this. Noting the "services" it provides, the consultancy says that its fundraising team "takes on a limited number of candidates each election cycle and markets them to Aegis' exclusive fundraising network."
When asked about this statement, Crank questioned whether that language in fact appeared on Aegis' website. When informed that it did, he called it "standard marketing stuff."
As the Washington Post recently reported, the Kochs' political network raised more than $400 million in 2011 and 2012 to defeat President Barack Obama, influence House and Senate races, and shape policy debates at the state and federal levels. The constellation of nonprofit groups used by the Kochs and their allies is mind-bendingly complex, seemingly designed to keep donors' identities shielded from public scrutiny.
Aegis Strategic comes across as an effort by the Koch brothers' allies to bring in-house the business of campaigns. On its website, Aegis bills itself as a one-stop shop for candidates who are "committed to freedom and economic opportunity," offering candidates such services as opposition research, fundraising, direct mail, TV/radio/cable advertisements, phone banking, data management, and social media. The company's office is located just blocks from Americans for Prosperity's national headquarters, the offices of various Koch-funded foundations, and Freedom Partners, the primary vehicle for anonymous money raised by the Koch donor network.
Pledging to identify and train budding conservative and libertarian candidates, Aegis potentially fills a gap that the Kochs have previously identified in their political operation. Donors and activists who are active in the Koch network say there was widespread frustration following the 2012 elections, during which the GOP had fielded so many lackluster candidates. "You can spend all the money on a candidate you want, but if they're talking about self-deportation, or betting $10,000, or 47 percent, you're gonna lose," says Stan Hubbard, a Minnesota-based radio and TV magnate who attends the Koch seminars. "You have a bad candidate, you're gonna lose."
At the Kochs' April 2013 donor summit, the first since the 2012 elections, one major topic of conversation was "candidate recruitment and training," according to an email previewing the summit that was first reported by Mother Jones. That preview, written by the Kochs' top fundraiser, Kevin Gentry, said that at the conference "a plan will be shared to help recruit more principled and effective advocates of free enterprise to run for office."
A little over a month later, corporate records show, Aegis Strategic was officially incorporated in Delaware.
The long, legal saga of David J. Stern, the south Florida attorney who made a fortune off the wave of home foreclosures stemming from the housing crisis, has reached its end.
After years of court battles over the practices of Stern's once-mighty, multimillion-dollar law firm, the Florida Supreme Court last week disbarred Stern. As the Palm Beach Post reports, a Palm Beach County judge who refereed Stern's case and who recommended disbarment criticized the 53-year-old lawyer for failing to take responsibility or show "any remorse" for his firm's actions. Mother Jones was one of the first news outlets to expose the shoddy and legally questionable work done by Stern's army of lawyers and paralegals as it foreclosed on hundreds of thousands of Floridians, including backdating crucial documents used to foreclose on homeowners. Nancy Perez, the Palm Beach County judge, said the blame fell on Stern for that shoddy work. "The incidents were not isolated, but rather a representation of the culture of the firm, as to the low level of competence and ethics," Perez wrote. "(Stern) is the lawyer. It was his firm. Mr. Stern is responsible."
Stern's firm, at its peak, was a juggernaut. In the mid and late 2000s, the government-owned enterprises Fannie Mae and Freddie Mac, as well as many of the nation's largest banks, retained Stern's firm to litigate an ever-growing pile of foreclosure cases in Florida, an epicenter of the housing meltdown. At one point, the Law Offices of David J. Stern handled as many as 100,000 foreclosure cases. Stern's firm and others like it were dubbed "foreclosure mills," employing hundreds and even thousands of lawyers and paralegals who pushed through foreclosure cases assembly-line-style. Incredibly, the federal government played a key role in creating foreclosure mills, as I reported:
Fannie and Freddie also reshaped the foreclosure industry. Their huge holdings meant they had to deal with thousands of foreclosures annually—even during time when relatively few loans were going bad. In the 1990s, the market expanded into subprime territory to feed the securitization beast, and borrowers began defaulting at higher rates. Hiring lawyers on a case-by-case basis was burdensome, so Fannie and Freddie put together a stable of law firms willing to litigate large bundles of foreclosures quickly and cheaply. They urged these handpicked firms to bring all foreclosure-related services—inspections, eviction notices, sales of repossessed properties, and so forth—in-house. Thus emerged the foreclosure supermarket.
...Stern's company is one of dozens of mills that now churn through more than a million cases a year for Fannie and Freddie, big banks, and private lenders. Built like industrial assembly lines, the mills employ small armies of paralegals and other low-level employees who mass-produce court filings, run title searches, and schedule scores of hearings and property auctions daily. Staff attorneys appear for dozens of court hearings in rapid succession, dashing from one courtroom to the next with rolling file cabinets. Stern and his ilk typically create in-house subsidiaries that bill the parent law firm for the various paper-pushing tasks. "All sorts of crap is loaded on," notes Irv Ackelsberg, a Philadelphia consumer-law attorney.
The business model is simple: to tear through cases as quickly as possible. (Stern's company handled 70,382 foreclosures in 2009 alone.) This breakneck pace stems from how the mills get paid. Rather than billing hourly, they receive a predetermined flat fee for the foreclosure—typically around $1,000—plus add-ons for all the side services. The more they foreclose, the more they make. As a result, say consumer attorneys and legal experts, even families who have been foreclosed upon illegally—and can afford to make good on their mortgages—end up getting steamrolled. "It's 'How fast can I turn this file?'" says Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, DC. "For these guys, the law is irrelevant, the process is irrelevant, the substance is irrelevant."
The foreclosure mill model made Stern a very rich man. When I reported on him in August 2010, he lived in a $15 million, 16,000-square-foot mansion on the Atlantic Intracoastal Waterway in Fort Lauderdale. Docked on his property was Misunderstood, his 130-foot, jet-propelled Mangusta yacht—a $20 million-plus replacement for his previous 108-foot Mangusta. He also owned four Ferraris, four Porsches, two Mercedes-Benzes, a Cadillac, and a Bugatti.
But the cavalier, always-be-foreclosing attitude of his firm caught up with Stern. Days after I published my investigation into Stern, then-Florida Attorney General Bill McCollum opened an investigation into his firm and two other foreclosure mills for "allegedly improper actions." Since then, Stern has been in and out of court fighting off lawsuits targeting him and his firm, which has since the vast majority of its business. The news of Stern's disbarment is just the latest blow for the one-time king of the foreclosure business. The state Supreme Court ruling ordered Stern to close his firm within 30 days.
Stern, for his part, seems to have found a new calling after his foreclosure empire crumbled. He's now an investor in Five Guys burger joint franchises.
At his Thursday press conference, New Jersey Gov. Chris Christie said he played no part in causing a traffic jam last fall on the George Washington Bridge and in nearby Fort Lee. He ultimately took responsibility for the debacle, but Christie said his deputy chief of staff, Bridget Anne Kelly, had ordered the traffic jam without his knowledge. Emails showed that she had been in cahoots with David Wildstein, a Christie appointee at the Port Authority of New York and New Jersey. Christie fired Kelly on Thursday, and he insisted that she was the only member of his inner circle who knew that the traffic mess was politically motivated and not the result of a supposed traffic study.
Here's the backstory. The traffic jam happened on the week of September 9 and quickly became a local controversy. Lawmakers began investigating, and on November 25, Bill Baroni, another Christie appointee at the Port Authority, testified before the New Jersey Assembly's transportation, public works, and independent authorities committee. Baroni told lawmakers that the lane closures were part of a study to determine whether Fort Lee should have three dedicated lanes leading onto the George Washington Bridge.
State lawmakers didn't buy Baroni's explanation. "I think that at best this was clumsy and ham-handed," said committee chair John Wisniewski, a Democrat. "At worst, this was political mischief by a political appointee."
Immediately after his testimony, according to documents released this week, Baroni texted David Wildstein asking how Christie administration officials in Trenton, the state capital, had reacted to his testimony:
[11/25/2013 11:58 AM] David Wildstein: You did great
[11/25/2013 11:58 AM] Bill Baroni: Trenton feedback
[11/25/2013 11:59 AM] Bill Baroni: ?
[11/25/2013 11:59 AM] David Wildstein: Good
[11/25/2013 11:59 AM] Bill Baroni: Just good? Shit
[11/25/2013 12:00 PM] David Wildstein: No i have only texted brudget [Bridget Anne Kelly] and Nicole they were VERY happy
[11/25/2013 12:00 PM] Bill Baroni: Ok
[11/25/2013 12:00 PM] David Wildstein: Both said you are doing great
[11/25/2013 12:06 PM] David Wildstein: Charlie said you did GREAT
Note the two names in that exchange we have placed in bold type: Nicole and Charlie. According to public records and news stories, the only Nicole politically close to Christie at the time was Nicole Davidman, who was the governor's campaign finance director in 2013 and the wife of Christie's press secretary. The only Charlie in Christie's inner circle was Charles McKenna, Christie's chief counsel and the aide who helped lead Christie's internal investigation of the bridge mess. State investigators assume that the Charlie mentioned in this text is McKenna, according to a legislative source, but they are not yet certain about Nicole (though they have not yet identified other possibilities).
Presuming these texts refer to Davidman and McKenna, here's what needs to be answered: Were these two Christie lieutenants happy about Baroni's testimony for the same reason as Kelly? Both Kelly and Wildstein knew the study wasn't the true cause of the traffic mess, and it's reasonable to conclude that they were delighted because Baroni had stuck to that story and not said anything about Kelly instructing Wildstein to cause the jam that paralyzed traffic in Fort Lee for days. But did Charlie and Nicole cheer Baroni's bogus testimony in the same way? And what does it mean that Wildstein, the man who arranged the lane closures, lumped together Kelly, the aide who instigated the closures, and Nicole? (Christie touched on this only briefly in his press conference: "I believe that I've spoken to everyone who was mentioned in the emails except for Charlie McKenna, who is away at a family funeral. And I am confident, based upon my conversations with them, that they had no prior knowledge nor involvement in this situation.")
This is just one line of inquiry Bridgegate investigators ought to focus on. Christie asserts that Kelly was the only member of his political team in on the bridge caper. But if others were aware of Baroni's stonewalling, the governor has a problem—especially if that includes McKenna, whom Christie has used to probe the bridge scandal. At the least, it might be ill-advised for the governor to have a fellow who apparently praised Baroni's bogus testimony in charge of investigating the cover-up.
Christie's office did not respond to a request for comment for this article.
On Wednesday, emails and text messages surrendered by a friend and former political appointee of New Jersey Gov. Chris Christie revealed that Christie's inner circle masterminded a massive September traffic jam in Fort Lee, New Jersey, as political retribution against the city's Democratic mayor. The messages show gleeful Christie aides gloating that their plan had wreaked so much havoc. One text message read, "Is it wrong that I'm smiling?"
The messages came from David Wildstein, who was Christie's high school buddy and, until he resigned due to suspicions about his involvement with the bridge scandal, the director of interstate capital projects for the Port Authority of New York and New Jersey. Wildstein divulged the messages in response to a subpoena from a panel of New Jersey lawmakers investigating the scandal.
Wildstein is testifying under oath this afternoon about the documents before the New Jersey Assembly's Committee on Public Works, Infrastructure, and Independent Authorities. Here are five questions lawmakers should put to him:
Is there any evidence that the "traffic study" ever existed?
As suspicions about the Fort Lee traffic jam grew, Christie and his staff said repeatedly that the governor believed a Port Authority traffic study had caused the whole mess.
In his Thursday press conference, Christie maintained that the bridge scandal may have had its roots in a legitimate traffic study, saying, "I don't know if this was a traffic study that morphed into a political vendetta or a political vendetta that morphed into a traffic study."
Why does Christie still think his top Port Authority aide was in the dark about this scandal?
On Thursday, Christie also expressed his confidence that David Samson, the Port Authority chairman, played no role in causing Fort Lee's traffic disaster, saying:
Samson put out a statement yesterday that he had no knowledge of this. I interviewed him yesterday. He was one of my interviews. I am convinced that he had absolutely no knowledge of this, that this was executed at the operational level and never brought to the attention of the [Port Authority] board of commissioners…And so I sat and met for two hours yesterday with Mr. Samson—General Samson—and again, I'm confident that he had no knowledge of this, based upon our conversations and his review of the information.
Yet messages released on Wednesday make it clear Samson was involved in plans to close Fort Lee's access lanes on the day of the traffic jam. When New York officials at the Port Authority reopened the lanes, reducing the traffic jam, Wildstein wrote to Kelly, "We are appropriately going nuts. Samson helping us to retaliate."
Did Christie learn about the bridge plot in his mystery meeting with the Port Authority chairman?
During a text message conversation in which a Christie aide and a Port Authority official planned the lane closures, the pair also tried to plan a meeting between Christie and Samson.
Naturally, some have speculated that the subject of the meeting was the Fort Lee lane closures—which would explode Christie's claims that he wasn't aware of plans to close Fort Lee's access lanes.
What did the traffic jam's planners think would happen in case of an emergency?
The architects of the Fort Lee traffic jam appear to have considered its potential public safety consequences. In one text message conversation that was sent once the lanes were closed, Port Authority appointee Wildstein waved away the Fort Lee mayor's complaints about school buses getting stuck in traffic by noting, "Bottom line is he didn't say safety."
But officials in Fort Lee, including two members of the borough council and the chief of police, later reported that the traffic jam had slowed down emergency responders—including police who were searching for a missing child. So what was the plan in case of an emergency?
Are there other instances in which the Port Authority and Christie staffers wielded their power for political reasons?
At his Wednesday press conference, Christie claimed he knew nothing about the lane closures that brought Fort Lee to a standstill. So it wasn't surprising that Christie denied knowing anything about other instances in which his appointees in his administration or at the Port Authority might've used their positions to enact political retribution.
The messages Wildstein surrendered illustrate a close relationship with the Christie administration. If any other Fort Lee-like incidents took place, he would know.