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, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndyKroll.

Get my RSS |

VIDEO: Protesters Swarm Wall St. Lobbyists' Homes

| Sun May 16, 2010 7:31 PM EDT

Late Sunday afternoon, the well-heeled residents of Chevy Chase, Maryland, a bucolic suburb northwest of Washington, DC, witnessed a commotion rare for their neighborhood. Toting signs and megaphones, fired up and chanting at the top of their lungs, some 700 demonstrators from around the nation paid a visit to two residents who work as powerful lobbyists for the United States' biggest banks: Gregory Baer, a deputy counsel for Bank of America, and Peter Scher, a high-ranking executive and lobbyist for JPMorgan Chase.

Bussed into Washington by the Service International Employees Union (SEIU) and National People’s Action (NPA), a community organzing network, the protesters visited Baer's and Scher’s homes as part of a multi-day stand in Washington. On Monday, SEIU and NPA will lead a series of protests on K Street in Washington—a street synonymous with influence and lobbying. The groups are pushing for strong new financial reforms (as teh Senate continues debating legislation to bolster the rules governing Wall Street) and urging banks to stop foreclosures and to promote job creation.

But before Main Street arrives on K Street, a fleet of yellow school buses and motor coaches delivered the demonstrators, clad in red, blue, and purple t-shirts, to a park in Chevy Chase near the home of Bank of America’s Baer. After a quick briefing, the throngs of protesters, hailing from Chicago, San Francisco, Staten Island, and other locales, gathered on Baer’s front lawn and marched to his front door. Members of NPA delivered a letter to a family member who opened the door. Baer, this family member said, wasn’t home. The letter, addressed to Bank of America CEO Brian Moynihan, asks Moynihan to meet with groups "to address the critical problems facing our neighborhoods and our country—problems that were caused in part by Bank of America and that continue to fester due to Bank of America’s inaction."

Here's a video, courtesy of National People's Action, of the scene at Baer's home:

Undeterred by Baer’s absence, the boisterous group chanted—"Bank of America, Bad for America," "Take It Back," "Fired Up, Can’t Take It No More"—and, via megaphone, blasted Bank of America for foreclosing on homeowners and lobbying against financial reform. One woman who took the mic explained how she’d called Bank of America dozens of times to fight off foreclosure but hadn’t had any success with the bank’s unresponsive and unhelpful employees. People in the crowd booed references to the bank. Many hoisted signs that read, "People First Economy”"and "Hold Wall Street Accountable."

Advertise on

JPMorgan Gets an “F” on Mining

| Thu May 13, 2010 12:50 PM EDT

In late March, I wrote about how Wall Street powerhouse JPMorgan Chase continues to fund coal companies that engage in mountaintop removal mining (MTR), a dangerous, environmentally devastating type of strip mining in which the peaks of mountains are literally blown off, exposing the seams of coal that run underneath. Problem is, the rubble and waste from MTR mining usually ends up in nearby rivers and water sources, contaminating them, killing local wildife, and often violating federal laws like the Clean Water Act. As I reported, "over the past 17 years, JPMorgan Chase has helped to underwrite nearly 20 bond or loan deals, worth a combined $8.5 trillion, for some of the biggest players in the MTR mining business, according to data from Bloomberg."

Today, Rainforest Action Network, a leading environmental group pressuring banks to end MTR financing, released a new report card, in conjunction with the Sierra Club and Banktrack, grading the world's big banks on their MTR policies. JPMorgan, which has yet to cut its MTR ties (and repeatedly refused to tell Mother Jones why), received an "F"; so, too, did PNC, the world’s largest MTR financier, and UBS, which finances one-third of the Appalachian region's MTR mining.

Credit Suisse ranked highest among the world’s biggest banks with an "A-," a grade it received for its policy—first reported by Mother Jones—of refusing to finance any coal mined using MTR.

The report card's authors say they showed the banks their grades before releasing the report, in an effort to get the banks to change their policies. In one case, Morgan Stanley issued a public statement on its MTR policy after learning of its failing grade from RAN and the Sierra Club; that grade was bumped up to a "C" after the public announcement.

The full report is available here.

Fake Divorces and Housing Bubbles

| Thu May 13, 2010 10:52 AM EDT

The latest sign that China is in the midst of a raging housing bubble: Chinese couples are intentionally divorcing each other to dodge the country's strict second-home ownership rules and save some yuan in the process. China's autocratic government, China Daily reports, has sought to curb rampant property speculation (sound familiar?) by hiking the down payment costs and interest rates for married couples looking to buy a second house—in April, the government raised the minimum down payment for families to 50 percent of the home's value (up from 40 percent) and made mortgage interest rates for married couples at least 1.1 percent of the standard rate.

To avoid those new rules, perfectly happy husbands and wives are now entering into "fake" divorces in order to boost their property portfolios. "After we get divorced, my wife will claim our house, so that I can apply for a mortgage as a first-home buyer since I don't have a house under my name," 41-year-old Li Guoliang said. "And we will remarry after that."

Here's more from the story:

Li and his wife are among many couples planning on getting a divorce to circumvent the government's restrictions on second-home purchases.

"Such a 'fake' divorce may save the second-home buyer hundreds of thousands of yuan. So, why not do it?" said Chen Ping, a real estate agent in Changsha.

Chen said he had helped many couples apply for the preferential mortgage for the first-home buyer through a "fake divorce," which was "legitimate and viable, just like reasonable tax avoidance."

"In the two weeks after the new rules were introduced, I received 16 clients hoping to get a favorable loan by getting a divorce," said Li Yi, a lawyer with Tenghui Law Office in Chongqing Municipality.

In China, though, divorce for economics' sake contradicts the traditional Chinese view of marriage, and a poll by Chongqing Evening News in early May suggests the idea isn't that popular: 78 percent of people polled said they didn't support "fake" marriages to cash in on cheap housing rules. Still, consider fake divorces alongside the other signs of excess and speculation characteristic of a housing bubble. When you look at the small but telling details—the luxurious Shanghai condos with bronze doors inlaid with Swarovski crystals, the crocodile skin-wrapped bed posts—and the big picture statistics, too—an 80 percent spike in real estate sales between 2008 and 2009, an investor buying 54 apartments in a single day—China starts to like the next US circa 2004, except on a far, far larger scale.

Chamber Cheers Derivatives Loophole

| Wed May 12, 2010 10:38 AM EDT

As the battle over financial regulatory reform continues on Capitol Hill, the US Chamber of Commerce is rallying behind an amendment to the Senate's bill—one of more than 125 proposed amendments—that would exempt a large chunk of companies who use derivatives, the complex financial products used to hedge risk but also to recklessly gamble on fluctuations in, say, the housing market. Yesterday, the Chamber sent a letter, cosigned by trade groups from the oil, manufacturing, financial services, and real estate industries, backing an amendment offered by Sen. Saxby Chambliss (R-Ga.) exempting from regulation "end-users" of derivatives—the utilities, farmers, oil titans (like BP), airlines, and other companies who use derivatives to hedge risk. The letter claims that between 100,000 and 120,000 jobs could be lost because, as the bill looks now, it would require these end-users to set aside cash and other collateral for trading through the more transparent, safer derivatives clearinghouse proposed by Senate lawmakers.

That end-user exemption is opposed by the Senate's architect of financial reform, Sen Blanche Lincoln (D-Ark.), by many Senate Democrats, and by top administration officials like Gary Gensler, chairman of the Commodity Futures Trading Commission, who says (pdf) there should be no exemptions in derivatives regulation. Supporters of complete derivatives transparency cite reports like this one (pdf), from the Congressional Research Service, which says that a broad end-user exemption could essentially gut new regulations altogether. CRS found that nearly two-thirds of derivatives trades involve an end-user, and "[i]f all end users are exempted from the requirement that OTC swaps be cleared, the market structure problems raised by AIG still remain." In other words, it would be the loophole that ate the rule.

The job losses figure cited by the Chamber is undoubtedly cause for concern; no one wants to proactively cut jobs, especially with the 9.9 percent unemployment rate we have now. (An aside: I'm trying to track down the actual report on job losses used by the Chamber to make sure it's been cited accurately—and not twisted to fit an agenda. I haven't found it yet, but rest assured I am digging into this.) Then again, the out of control over-the-counter derivatives market played a huge role in the financial crisis—a meltdown that's caused millions of Americans to lose their jobs and their homes. A record 6.72 million workers who want to work have been unemployed for 26 weeks or more, the highest since the government started counting this figure in 1948; that number began its vertiginous climb in—you guessed it—the fall of 2008, when Wall Street crumbled.

Even if the Chamber is right to say tough derivatives regulation will result in the loss of jobs, you have to look at the bigger picture and broader gains here. 100,000 jobs is tough to swallow. But tougher still is not fixing the derivatives markets and setting the stage for the next meltdown—and the millions of job losses that come with it.

Tue Nov. 18, 2014 7:00 AM EST
Wed Oct. 15, 2014 3:01 PM EDT
Tue Jun. 24, 2014 3:22 PM EDT
Thu Apr. 24, 2014 6:06 AM EDT
Mon Jan. 13, 2014 1:19 PM EST