Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Guardian, Men's Journal, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndyKroll.

Get my RSS |

Nevada's Rand Paul Primary Redux?

| Wed May 26, 2010 2:50 PM EDT

Sharron Angle, the Tea Party favorite in Nevada's three-way Republican primary, is mounting an anti-establishment, Rand Paul-esque charge in her state's June 8 primary vote. Between late April and mid-May, Angle surged in the polls, from 13 percentage points to 25, according to R2000/Daily Kos and Las Vegas Review-Journal polling data. Meanwhile, the front-runner and GOP choice in that primary, former state GOP chairwoman Sue Lowden, dropped from 38 points to 30, and the third main candidate, Danny Tarkanian, dipped from 28 points to 22.

A former Nevada assemblywoman, Angle has seized on a handful of mistakes by Lowden, whose comfortable lead in the primary has all but eroded. Adopting the wildcard, Tea Party mantle, Angle is now bashing Lowden's fiscal record, claiming her opponent raised taxes and supported state spending hikes. Angle also unleashed the ultimate of political insults in the hard-hit Silver State, claiming Lowden—gasp!—"backed Harry Reid for years."

Whether Angle can overcome Lowden in the final days before the primary—Angle's raised a mere $945,000 for her campaign, less than half of Lowden's war chest—depends on how much she can paint Lowden as another political insider wedded to an incredibly unpopular Republican Party. Here's Angle's most recent ad attempting to do just that:

Advertise on MotherJones.com

Behind Dems' Record Low Approval Rating

| Wed May 26, 2010 8:43 AM EDT

A new CBS News poll out last night reveals approval levels have declined to an all-time, basement low for Obama's Democratic Party, with only 37 percent of those polled saying they have a favorable view of the Dems. That's a decrease of 20 percentage points in the past year. Then again, Republican Party's image isn't much better, either: 33 percent approve of Michael "Keepin' It Real" Steele and Co. And in the "unfavorable" view category, it's a neck-and-neck race between which party gets the mantle of most loathed by American populace so sick of Washington the name evokes disgust and resentment—55 percent of Americans have a negative view of the GOP, and 54 percent say the same about Democrats.

The conclusion here is obvious: If you're a candidate running for national or even state political office, you basically have to do everything you can to separate yourself from the folks in Washington, casting yourself in the starkest terms possible as an outsider untainted by the influence and money of modern-day politics. Take Rory Reid, a gubernatorial candidate in Nevada and the son of Senate Majority Leader Harry Reid (D-Nev.). The other day I was clicking around Reid's site, reading up on his ambitious new education reform plan. Then it hit me: You'd never know that Rory was the son of Harry from reading Rory's website. The only mention I could find of papa Reid was in a smattering of press clippings posted on the site. As one Nevadan wrote me in an email recently, "it doesn't take a rocket scientist to see the negative effects that could arise from such a relationship."

Back to the CBS poll. While the broad political data is mostly predictable, the economic-related results are more telling. For instance, 59 percent of respondents said Wall Street has undue influence on Washington. That's a no-brainer—consider that the finance, insurance, and real estate (or FIRE) sector has spent more than $4 billion lobbying Washington in the last decade or so. And when Washington had the chance to beat back the Wall Street influence machine by limiting the size of big banks, constraining not just their financial size but the size of their political influence, too, the Senate failed to act and the White House did nothing. And there's little chance the House and Senate together will revive that idea.

What's more, the poll shows the public strongly backs government support for homeowners—but not bank bailouts. Which means the Obama administration has it all backward: It's poured billions of dollars and plenty of political capital into the massively unpopular bailouts; but the program that could win them public support, the Making Home Affordable program, the Treasury's homeowner rescue, has been a complete mess. Some would say a failure.

Indeed, with the perilous state of the economy still looming large on the minds of Americans (eight of 10 told CBS the economy remained in bad shape), the administration's inability to help homeowners as it helped the banks could prove disastrous in this fall's elections.

Dem Warfare on Derivatives Proposal

| Tue May 25, 2010 8:22 AM EDT

Sen. Blanche Lincoln (D-Ark.) can add a new group to her growing list of opponents in Washington and on Wall Street: House Democrats, led by Rep. Michael McMahon (D-NY). McMahon, Bloomberg reports, is leading a bloc of Democrats who want to kill the toughest of Lincoln's derivatives regulation proposals—namely, forcing big banks to break off their "swaps" desks. "The House bill is based on principles on how to reduce risk and make the system more transparent," McMahon said, "it’s not based on wiping out the system or destroying the system and that’s what the provision does."

The swaps trading desks that Lincoln wants to cut out of banks are highly profitable operations that trade complex financial products like derivatives, whose value depends on that of an underlying asset (wheat, oil, or a stock). Lincoln believes these trading desks are too risky to remain in taxpayer-backed banks. Her demand to make banks convert their swaps desks into separate subsidiaries or divest them altogether, and her fight to keep that provision in the Senate's financial reform bill, has earned her plenty of opponents in addition to McMahon—all of Wall Street, Treasury Secretary Tim Geithner, Senate banking committee chair Chris Dodd (D-Conn.), former Federal Reserve chairman Paul Volcker, and a slew of others. Indeed, Dodd briefly flirted with the idea of killing Lincoln's provision while the Senate was still negotating its own bill earlier this month, but Lincoln demanded the provision remain—which it did.

Another House Democrat, Gary Ackerman of New York, wrote to top House leaders to warn them of the consequences of Lincoln's swaps desk proposal, Bloomberg noted. "We are deeply concerned by the very real possibility that, as a result of the Senate derivatives provision, America's largest financial institutions will move their $600 trillion derivatives businesses overseas, at the expense of both New York’s and the United States' economy," Ackerman wrote.

Complicating the debate on Lincoln's proposal is her midterm election this fall. Senate lawmakers had held off on fighting over the provision last week to avoid hurting Lincoln's chances in her Democratic primary race against progressive candidate Bill Halter. In the primary, though, neither Democratic candidate secured 50 percent of the vote, leading to a June 8 run-off and prolonging the uncertainty over whether Lincoln's rule would survive or not. There's no doubt that Lincoln will continue fighting for her swaps desk rule at least until that run-off to maintain her unrelenting stance toward regulating Wall Street. The question is whether Lincoln, now largely on her own, can withhold the barrage of criticism and opposition that grows by the day. 

Harry Reid's Tea Party Dreams

| Mon May 24, 2010 12:35 PM EDT

Thanks to a series of missteps by Sue Lowden, the top GOP candidate in Nevada's 2010 senate race, it's beginning to look like Nevada senator Harry Reid could square off against the Tea Party come November. That's a battle Reid would love, and one that political experts in Nevada say largely favors the Senate majority leader.

As both Politico and I reported today, Reid's main challenger, Lowden, a former chair of the Nevada GOP, has stumbled in the final weeks before Nevada's June 8 primary. (Reid has no Democratic primary opponent.) She blundered when she implicitly suggested that patients barter with doctors for care and even trade chickens. And now one of her primary opponents, Danny Tarkanian, says Lowden broke campaign finance law by accepting an RV from a donor that she's used to travel the state. (Lowden's campaign says she in compliance with the law.) Nonetheless, Lowden has slipped in the polls, with a Democratic-funded poll showing Sharron Angle, the Tea Party-backed underdog on the GOP side, just beating Lowden and Tarkanian, Politico reported.

All of this bodes well for Reid, who, as I reported today, also has the passage of financial reform to bolster his record on the campaign trail. From the sounds of it, his campaign couldn't be happier if it faced the Tea Party candidate, Angle, in November and not Lowden, the more established, traditional GOPer. Indeed, Reid's campaign has highlighted Lowden's gaffes as often as it can in an effort to knock her out of contention for the fall. And if Angle does win on June 8, there's no doubting Reid's people will do everything they can to paint the Tea Party Express darling as cut from the Rand-Paul-Civil-Rights-Act cloth.

AIG's Ringleader Walks Away Freely

| Mon May 24, 2010 8:47 AM EDT

Without global insurer American International Group's Financial Products outfit, located in London, the financial calamity would've been less severe. AIG FP, as it was known, sold oodles of a product called a credit default swap, essentially an insurance policy on bundles of subprime mortgages. (The way it worked, if the homeowners stopped making payments on their mortgages and money ceased to flow into those mortgage pools, the owner of that unregulated insurance policy got a big payout for a pretty small initial investment.) Problem is, AIG FP, led by a guy named Joseph Cassano, sold way too many credit default swaps. Way, way too many of them. And when the housing bubble burst, AIG was forced to post cash or securities for all those people to whom AIG had sold these swaps. The rest you know: the firm crumbled, was deemed "too-big-to-fail" and got more than $140 billion in bailout cash, and so on.

Now comes this news: Despite leading an office that nearly imploded the global markets, Cassano, who author Michael Lewis dubbed "The Man Who Crashed the World," will face no charges for his role in the crisis. The Department of Justice had been investigating Cassano, the New York Times reports, to see "whether Mr. Cassano misled investors when he stated in December 2007 that the company’s obligations on the mortgage securities it backed were unlikely to produce losses." Apparently he didn't. Which means he was arguably the most oblivious executive to ever run such a complex, powerful financial operation.

Cassano's dropped case is indicative of a broader failure by regulators and prosecutors to nail down any high-level culprits from the financial crisis. In a recent investigation, the Huffington Post Investigative Fund detailed how, despite banks' reports of massive levels of fraud, banks regulators hadn't made one criminal referral stemming from the financial crisis. Why not? A culture of self-policing, the I Fund's David Heath writes:

While data on criminal referrals during the S&L crisis is spotty, the Government Accountability Office reported that in the first ten months of 1992 alone – a random snapshot – financial regulators sent the Justice Department more than 1,000 cases for criminal prosecution...

This time, prosecutors are relying more heavily on banks to report suspicious activity to the Treasury Department. Banks are required to report known or suspected criminal violations, including fraud, on Suspicious Activity Reports designed for the purpose. In effect, the reports, which can be many pages in length, provide substantive leads for criminal investigations.

Moreover, Heath adds, there are fewer cops on the beat when it comes to white-collar financial crime: "Deputy Director John Pistole testified before Congress last year that the bureau had 1,000 people working on the S&L crisis at its height. That compares to about 240 agents working on mortgage fraud cases last year."

Whether the lack of resources and hands-off mentality influenced Cassano's case is unclear. But it's telling that the leader of arguably the most infamous operation throughout the entire crisis will walk away from the entire mess with only a bruised ego and a tarnished name.

Tue Nov. 18, 2014 6:00 AM EST
Wed Oct. 15, 2014 2:01 PM EDT
Tue Jun. 24, 2014 2:22 PM EDT
Thu Apr. 24, 2014 5:06 AM EDT
Mon Jan. 13, 2014 12:19 PM EST
Mon Dec. 16, 2013 9:47 AM EST