Caldwell

Patrick Caldwell

Reporter

Patrick Caldwell is a reporter in Mother Jones’ DC bureau. Previously, he covered domestic politics for The American Prospect and elections for The American Independent. His work has also appeared in The NationThe New Republic, and The Washington Independent. E-mail any and all tips to pcaldwell [at] motherjones [dot] com. Follow his tweets at @patcaldwell.

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Patrick Caldwell is a reporter in Mother Jones’ DC bureau. Previously, he covered all things domestic politics for The American Prospect and elections for The American Independent. His work has also appeared in The NationThe New Republic, and The Washington Independent. E-mail any and all tips to pcaldwell [at] motherjones [dot] com. Follow him on Twitter at @patcaldwell.

Scott Brown Ditches "The People's Pledge" for Dark Money

| Mon Mar. 17, 2014 8:05 AM PDT
Scott Brown doesn't want to turn down money from Karl Rove and the Kochs.

Scott Brown, the former Republican senator from Massachusetts who Elizabeth Warren defeated in 2012, has decided that he wants his old job back. Well, not exactly his old job. Late last year Brown sold his Massachusetts home, packed up his belongings and inched north across the border to New Hampshire. He's been making feints toward running for awhile and on Friday made that speculation semi-official, forming an exploratory committee to challenge Sen. Jeanne Shaheen's (D-N.H.) in 2014. The last time he ran for Senate, Brown agreed to a pact with Warren that largely prevented outside campaign spending but, based on initial comments he made over the weekend, Brown appears ready to embrace the wild world of super PACs and dark money nonprofits in order to reclaim his old post at the Capitol.

Warren and Brown knew their 2012 campaign would be a hotbed of political excitement. She was a favorite of liberal activists, a YouTube sensation adored by the Netroots. Brown was the Republican heartthrob who claimed Ted Kennedy's old seat and almost squashed Obamacare. Republican commentators immediately began dreaming of him as a future presidential prospect after he won a special election to the Senate in 2010. Their match-up was sure to be a magnet for outside political spending, but neither campaign wanted to lose control of their messaging. The two sides crafted a deal: they would both publicly disavow campaign ads from outside groups and urge those organizations to save their money. Should any group go against their wishes, Brown or Warren would have to donate 50 percent of the money spent on the ad buy to a charity of their opponent's choice. They called their deal "The People's Pledge." Neither candidate hurt for money in that race—they collectively spent over $81 million in the most expensive Senate race to-date. But the pledge did the trick; outside spending played a minor role in their campaign.

Shaheen sent a letter to Brown on Saturday offering to play by those same rules in 2014. "I believe it limited the influence of outside groups and allowed the people’s voices to be heard," her letter said urging her new opponent to once again sign "The People's Pledge." But Brown scoffed at the potential for another deal. "It's hard to view Jeanne Shaheen's actions as anything other than hypocritical and self-serving," Brown responded in a statement. "The people of New Hampshire can see through the Washington-style game she is playing."

Why the change of heart? Perhaps it's as simple as a sour taste for the pledge after Brown lost in 2012. But more likely his newfound acceptance of outside groups owes to the circumstances of a 2014 campaign. Brown had nothing to gain by embracing dark money in 2012. Anything conservatives directed his way was bound to be matched by liberals who were devoted to getting Warren into office. That likely won't be the case against Shaheen. Her name carries less cachet among liberals, while Brown can count on the conservative base rallying around the cause. In light of Brown's announcement, the Karl Rove founded American Crossroads has bought $650,000 in ads attacking Shaheen that are set to run this week. Earlier in the year, the Koch-backed Americans for Prosperity poured $700,000 into New Hampshire on ads attacking Shaheen for her support of Obamacare. With allies like these, Brown has no reason to make any sort of pledge to rely on funding from the people.

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Dems' Anti-Koch Campaign Heats Up

| Mon Mar. 10, 2014 10:38 AM PDT

Harry Reid (D-Nev.) has been bounding onto the Senate floor with a new vocation of late, one unrelated to passing legislation. The Senate majority leader has made it his personal mission to call out David and Charles Koch, the billionaire brothers who have bankrolled a massive infrastructure of conservative groups. He's termed the brothers "un-American." He's accused his Republican colleagues of being bought and paid for by the Kochs. He's said they are trying to rig the political system to benefit the wealthy. "The Koch brothers and other moneyed interests are influencing the politics in a way not seen for generations," he said during one recent speech. (A spokesman for the brothers, meanwhile, has fired back at Reid.) Last week, the Democratic Senatorial Campaign Committee unveiled a website that denounces the brothers and blasts the GOP for being "addicted to Koch."

What brought Reid to denounce two political donors on the Senate floor? The vast sums of money they and their political network are spending to unseat his Democratic colleagues and overturn their Senate majority, paving the way for a Republican takeover of Congress in 2014. For months, Americans for Prosperity, the advocacy group founded and partly bankrolled by the brothers, have blitzed vulnerable Senate Democrats with ads, spending some $30 million since last fall. Among the lawmakers in the advocacy group's crosshairs are Sens. Mary Landrieu (D-La.), Kay Hagan (D-N.C.), and Mark Pryor (D-Ark.).

Hillary Clinton in 1993: Individual Mandate Is a "Much Harder Sell"

| Fri Feb. 28, 2014 12:36 PM PST
Hillary Clinton speaking before a Senate panel in 1993.

The individual mandate has been one of the most controversial aspects of Obamacare since Congress passed the law in 2009. Conservatives have railed against the requirement that everyone purchase health insurance or face tax penalties. And the 2012 Supreme Court case that decided the fate of Obamacare centered around Republicans' objections to the mandate.

But the individual mandate originated as a conservative goal—first proposed by the Heritage Foundation, later adopted by Senate Republicans as an alternative approach to President Bill Clinton's efforts to reform in the health care system during his first term.

New documents unsealed Friday by the Bill Clinton's presidential library show that then-First Lady Hillary Clinton wasn't a fan of the individual mandate back when it was a Republican idea. In September 1993, Hillary traveled to Capitol Hill and explained White House's health care plan to a gathering of Democratic leaders from the House and Senate. During Clinton's remarks, which spelled out the details of the proposal before they were released to the public, she dismissed the concept of the mandate with a prescient knowledge of how tricky it would be to sell to the public:

But if the Republican alternative, as it appears now to be shaping up, at least among the moderate Republicans in the Senate, is an individual mandate, we have looked at that in every way we know to to (inaudible). That is politically and substantively a much harder sell than the one we've got—a much harder sell.

Because not only will you be saying that the individual bears the full responsibility; you will be sending shock waves through the currently insured population that if there is no requirement that employers continue to insure, then they, too, may bear the individual responsibility.

Unfortunately for Clinton, if she runs for president in 2016 (as widely predicted) she'll likely have to defend Obama's implementation of that mandate.

University of Chicago Hires Notorious Goldman Sachs Fraudster to Teach Economics to Undergrads (Updated)

| Thu Feb. 27, 2014 2:18 PM PST
Fabulous Fab appears at a Senate hearing in 2010.

Update, March 3, 8:30 p.m. EST: Fabulous Fab won't be teaching a course at the University of Chicago after all. "As preparations continue for the Spring Quarter, Fabrice Tourre will no longer be assigned as an instructor for Honors Elements of Economic Analysis in the College," the college said in a statement. "Instead he will be able to fulfill the teaching requirements for his Ph.D. program through opportunities in his department’s graduate-level curriculum.” The news was first reported Monday night by The Chicago Maroon, the student newspaper at the school.

The lone individual found liable for committing fraud during the lead up to the financial crisis will soon be teaching undergrads the basics of economics at one of America's most prestigious universities. Former Goldman Sachs banker Fabrice Tourre—better known by his self-assigned nickname, "Fabulous Fab"—is studying to get his Ph.D. in economics from University of Chicago. Per the Chicago Maroon, the school's student newspaper, Tourre will teach a class this quarter, offering honors students the opportunity to learn "Elements of Economics Analysis 3" from a man who owes over $1 million in fines to the Securities and Exchange Commission.

Tourre is a poster child for Wall Street malfeasance. While working at Goldman in 2007, he designed a financial product called Abacus 2007-AC1. This collection of mortgage-backed securities was designed to fail—hedge funder John Paulson had asked Goldman to sell a package of bad mortgages that he could then bet against. Thanks to Tourre and the foreclosure crisis, Paulson made a cool $1 billion. Fab and Paulson knew Abacus was a bum product from the get-go, but Tourre hid that information from investors. Goldman rewarded Tourre handsomely for the scheme: He was promoted and earned a reported $2 million.

After the crash, though, the deal came under scrutiny. Congress summoned Tourre and other Goldmanites for hearings to examine the causes of the crisis, and Fab drew widespread media attention when emails he sent to his girlfriend became public. The emails showed Tourre boasting about how he had hoodwinked investors. Here's an excerpt:

When I think that I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: "Well, what if we created a "thing", which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?") it sickens the heart to see it shot down in mid-flight.

The emails raised the ire of the SEC, which sued Goldman and Tourre for fraud. The agency settled with Goldman for $550 million in the summer of 2010, but the deal didn't include protection for Tourre. (Goldman has been covering his legal fees, though). Last year, a federal court found Tourre liable for six counts of civil securities fraud. The fines totaled $1 million, an amount he's currently contesting. Although the ruling was a victory for people who wanted to see Wall Street pay for the financial crisis, it was a minor win—Tourre, who was 28 when he helped create Abacus, was only a midtier employee at Goldman.

Tourre did not respond to a request for comment Thursday afternoon. But last April he granted the Wall Street Journal a glimpse into his life as an average grad student. He was captain of an undefeated intramural soccer team, cheering his teammates on from crutches after an injury. He tutored fellow classmates. But the remnants of his former life of decadence linger. He lives in a high-rise apartment with a scenic view of Lake Michigan and a uniformed guard at the entrance.

The course guide for the class Tourre will be teaching describes it as "an introduction to macroeconomic theory and policy." There's no word on whether dreaming up crappy new financial products to sell to unwitting investors will be on the syllabus, too.

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