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 Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Donors: Give Back Our Money, Crist

| Thu May 6, 2010 10:04 AM EDT

A bloc of heavyweight Republican donors is demanding that Florida Governor Charlie Crist, who recently ditched the GOP to run as an independent in his state's US Senate race, return all of their campaign donations for his party betrayal. As of the end of March, Crist had more than $7 million in his campaign war chest, thanks in large part to his deep-pocketed friends in the GOP. The donors' demands came in a letter to Crist that read in part:

"We helped to support, and yes to bankroll, your political career. For years you have been asking us for money. And for years we have put our names and credibility on the line by asking our friends to donate to you. Those days are over."

The donors asking for their money back include the former head of the Florida Republican Party, Al Cardenas. Crist's campaign hasn't responded to the letter yet, the Associated Press reported, and he has no obligation to return any of the money.

Crist switched from the GOP to an independent last week, knowing he had little to no chance beating his Republican rival, Marco Rubio, a Tea Party darling who is the former speaker of Florida's house of representatives. Crist trailed Rubio in the polls by as much as 20 points, but as an independent, the Florida governor looks to have much more of a chance competing with Rubio and Rep. Kendrick Meek (D-Fla.), the presumed Democratic candidate.

The donors' letter is another piece of bad press for Crist, and another example of the GOP's efforts to purge him from the party. Recently, Florida Republicans began auctioning Crist-related memorabilia on eBay, like an autographed business card of Crist's and campaign buttons from his gubernatorial campaign. The party is also trying to sell off a $7,500, scandal-ridden oil portrait of Crist. Given the bad blood between Crist and the GOP—RNC chairman Michael Steele recently said there "will be no Senator Crist"—it's unclear, should Crist win in Florida, with which party he would caucus. With the way Florida's election is shaping up, that victory looks far from likely.

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Dems, GOP Pass Too-Big-to-Fail Tweak

| Wed May 5, 2010 5:00 PM EDT

An overwhelming number of senators from both parties passed the first major amendment on financial regulatory reform this afternoon, making substantial changes to how too-big-to-fail banks are liquidated when they fail. The vote was 93 to 5, with Sen. Byron Dorgan (D-ND), a staunch supporter of reform, the only Democrat to vote against it. The Dodd-Shelby amendment, named for senators Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.), replaces the previous proposal—that a $50 billion fund be created to pay for the orderly euthanization of Citigroup-like megabanks—with a provision giving the Federal Deposit Insurance Corporation the power to wind down these banks. (The FDIC already takes over and winds down small to medium sized banks.)

The Dodd-Shelby amendment mandates several more new rules. Shareholders who receive government money in a bank's wind-down will be forced to pay back any funds exceeding what they would've received had the bank simply been liquidated. The Federal Reserve will only be allowed to use its emergency lending powers with banks who are still solvent, and not failed. Finally, the amendment, if it remains untouched and the bill passes, will give regulators the power to ban top executives and directors of failed banks from again working in the financial sector, a proposal sure to draw ire of Wall Street and its phalanx of lobbyists.

Earlier this afternoon, the Senate also passed the Boxer amendment, which explicitly says that taxpayers will never again be on the hook for future bailouts or support to struggling megabanks. That amendment also passed with near-unanimous backing from both parties.

GOP Making Love to Wall St.?

| Wed May 5, 2010 2:23 PM EDT

Pissed with Republicans' stalling tactics on financial reform, Senate Majority Leader Harry Reid offered his biggest bash of GOPers yet today. GOPers, Reid quipped, are doing nothing less than "making love with Wall Street" with their continued obstruction. Reid's comments come as Senate GOPers continue to stall the Senate's progress on passing a financial reform bill; after voting three separate times to block open debate on the Senate floor last week, Republicans are now refusing to submit their own amendments to the finance bill, which has slowed the bill's progress. They say they won't let the amendment process proceed until Sens. Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.) reach a strong agreement on how to euthanize too-big-to-fail banks. That agreement appeared to be reached late last night, but it's still not clear if GOPers are ready to move ahead on financial reform.

Today, Republicans released their own version of a new consumer protection division to counter the Democrats' plan. The GOP's version would seriously scale back consumer provisions in the current bill, crafted by Democrats, by both weakening the division's rule-writing power and continuing to let federal bank regulators preempt rules crafted at the state level. The GOP's decision to lay out its own consumer division could signal the party's intention to let the debate go forward, which would allow votes on amendments to happen today.

How the GOP's Consumer Plan Screws You

| Wed May 5, 2010 1:10 PM EDT

Senate Republicans have put forward their own proposal for a new consumer protection agency, a plan that significantly kneecaps the consumer division Democrats are pushing for and does little to actually help consumers. Republicans' plan would establish a consumer protection division within the Federal Deposit Insurance Corporation, but it wouldn't be independent or autonomous, a condition seen as a dealbreaker for consumer advocates. (The Democrats would put an independent agency in the Federal Reserve.) In the GOP's plan, the division's ability to write new rules would be seriously constrained by the FDIC, which have to agree to those new rules before they became law.

The GOP's consumer proposal would also allow federal consumer laws to continue to override, or preempt, state laws. (The Democratic plan, on the other hand, would let states' attorneys general and other regulators, who are nimbler and respond to on-the-ground events faster, to craft laws at the state level.)

Hank Paulson-Goldman Reunion

| Wed May 5, 2010 10:15 AM EDT

Could Hank Paulson, the bald-headed, hard-charging former Treasury secretary who crafted the ad hoc bailouts of 2008, return to his former perch at under-fire Goldman Sachs? In a "what-if" story in today's Wall Street Journal, Paulson's name is floated as a potential successor to the chairmanship at Goldman, should current chair and CEO Lloyd Blankfein resign or be forced out of the chairman's role amidst one of the darkest periods in the Goldman's history.

To no one's surprise, rumors are swirling inside and outside of Goldman Sachs over the fate of the investment bank's leader, Blankfein—whether he'll survive the onslaught of lawsuits, the bad PR, a dip in the firm's stock, and so on. Right now, there aren't any indications that Blankfein or other top brass at Goldman are set to leave. There is, however, a resolution filed by a Goldman shareholder demanding a split of the CEO and chairman positions, both of which Blankfein currently occupies. If the resolution passed, Blankfein would have to relinquish the chairmanship. One bloc of speculators inside Goldman wants Paulson to return to the firm to fill the chairman role if Blankfein is pushed out.

Whether Paulson would jump at such a move is unlikely. After all, if his memoirs are any indication, Paulson sees himself as the man who helped rescue (most of) Wall Street's most storied firms and the financial markets, emerging relatively unscathed from the meltdown of 2008. A return to Goldman would likely tarnish that narrative. It would also provide more fodder for those who call Goldman "Government Sachs," and rail against the revolving door between Washington and Wall Street.

All of this, of course, hinges on the civil suit filed by the Securities and Exchange Commission against Goldman. The SEC alleges that the firm sold a complicated financial product to investors the design of which had been heavily influenced by a hedge fund trader, John Paulson, who was betting against that product; in other words, the product was designed to fail. What's more, the SEC says Goldman failed to fully disclose to investors Paulson's role in influencing the product's design. Right now, the case is still pending, and while there have been rumors of a settlement, Goldman has publicly said it will fight the suit. How the SEC-Goldman battle plays out will largely determine the fate of Blankfein and whether Paulson comes into the picture at all.

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