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"Political Payola Endangers U.S."

After receiving very large campaign contributions from the loan industry in 1982, Senator Jake Garn was influenced to sponsor the Garn St. Germain Depository Institution Act -an act that deregulated the savings and loan industries. As a result, more than 1,000 thrifts failed, nationwide, costing taxpayers over $500 billion.

In 2000, Senator Phil Gramm received over $1 million in contributions, from the securities industry, and was thereby motivated to attach a proposed bill (actually written by the securities industry) to an omnibus appropriations bill. By this means the Commodity Futures Modernization Act was created to deregulate derivatives trading. This legislation facilitated the Enron debacle. At the time of these events, Gramm's wife, Wendy, was an Enron Director.

Before departing the Senate in 2003, Senator Phil Gramm and other Congressional recipients of "political payola" pushed for removal of most reporting and regulatory requirements for home lenders. With nearly all restrictions removed, the subprime home mortgage crisis was created which could eventually cost taxpayers over $3 trillion. Bankers and other mortgage lenders effectively engaged in fraud and racketeering when they ignored or fabricated income data for low income home mortgage applicants. These lenders then rushed to "bundle" and sell adjustable rate mortgages knowing borrowers would probably fail to make payments when interest rates increased. Congress now wants taxpayers to pay billions of dollars to save such racketeering lenders. All of this would not have happen without substantial "political payola" from lenders.

Senator Phil Gramm now works as a lobbyist for an investment bank, USB, and he has been employed to help influence the U.S. Congress to end (repeat "end") rules designed to make predatory lending more difficult. For reasons of personal gain, Gramm seeks even more financial harm to his fellow Americans.

In a situation somewhat similar to the subprime fiasco, banks in the Ozarks have engaged in racketeering since 2004. The sceme of fraud is based on providing farm purchase mortgages to refugee/ immigrant farmers who qualify for 90/ 95 percent farm loan guarantees from USDA's Farm service Agency (FSA). These bankers greatly inflated farm values to obtain guarantees much higher in dollar value. Then they fabricated estimated annual farm income on farms being purchased to make FSA and buyers believe they could provide debt service from farm income. As the fatal blow to planned foreclosures, for these farm buyers, adjustable rate farm mortgages were used to assure buyers would soon lack the ability to repay loans. When FSA was asked to take corrective action, and FSA representative indicated that no action could be taken against the banks. It would seem that "political payola" has helped the banks acquire some legislative protections for their racketeering. Henry Law Firm of Fayetteville, AR may make a racketeering complaint against First Financial Bank of Ft. Smith, AR, one of the banks strongly suspected of such racketeering. However, the bankers believe their "friends" in Congress will protect them from such litigation.

In years past, the U.S. was generally viewed as a "beacon-of-light" for all the world to see. "Political payola" has now made us a "beacon-of-corruption." The voters of this nation must demand change, or the corruption will continue.

Learn more about this author, David Nuttle.
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