Wednesday, August 31, 2011

Probably telecom dualopolists AT&T and Verizon now hate NYS AG Eric Schneiderman as much as the banksters do -- and the more corrupt state AGs


Iowa AG Tom Miller: He's shocked, shocked, that anyone could question his toughness with the banks after he raised hundreds of thousands of simoleons from the financial sector upon announcing his intent to "investigate" the banks, which he has done so, so hard. I bet the joke'll be on the banksters when Tom hurls all that filthy lucre back at their stinking feet! (Anytime now, Tom.)

by Ken

Before we descend to the hilarity of sleazebag of the week Tom Miller, let's make sure to get the news out -- and this is big news, regarding what was looking like an unstoppable takeover of T-Mobile by AT&T. From Bloomberg:
U.S. Files to Block AT&T, T-Mobile Merger

By Tom Schoenberg, Sara Forden and Jeff Bliss - Aug 31, 2011

The U.S. Justice Department sued to block AT&T Inc.’s proposed $39 billion takeover of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market.

The government is seeking a declaration that AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law, according to a complaint filed today in federal court in Washington. The U.S. also asked for a court order blocking implementation of the deal, the largest announced acquisition of the year, according to data compiled by Bloomberg.

“I don’t see any room to settle the case,” said Bert Foer, head of the American Antitrust Institute in Washington, in an interview. “They have clearly drawn a line in the sand.”

AT&T Chief Executive Officer Randall Stephenson’s proposed purchase of Bellevue, Washington-based T-Mobile, announced in March, would combine the second- and fourth-largest carriers to create a new market leader ahead of No. 1 Verizon Wireless. The new company would dwarf current No. 3 carrier Sprint Nextel Corp. (S), which argued against the deal.

“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the government said in court papers. Dallas-based AT&T fell as much as 5.5 percent in New York trading after Bloomberg News broke the news of the lawsuit. . . .

Now I don't suppose the DoJ is likely to discuss how it reached the decision to intervene, but there's good reason to think that some role, and possibly a major one, was played by the office of New York State Attorney General Eric Schneiderman. Antitrust Bureau Chief Richard Schwartz issued a statement today saying that his boss "looks forward to reviewing the Department of Justice’s complaint to determine the best course forward on behalf of New York consumers and businesses."
Since March, Attorney General Schneiderman has played a major role in the review of the proposed AT&T, T-Mobile merger. Working in close partnership with the Department of Justice, this office has played a leadership role in a group of 26 states conducting interviews and gathering evidence central to this investigation. We have conducted numerous interviews of business enterprise customers throughout New York State and throughout the country to assess whether the merger would result in harm to competition to the business enterprise market, and closely analyzed the parties' claims that the merger would lower costs and improve service to consumers.

Attorney General Schneiderman remains particularly concerned that the proposed merger would stifle competition in markets that are crucial to New York's consumers and businesses. This includes concerns about vulnerable upstate communities, where concentration in some markets is already very high, and the impacts on New York City’s information-intensive economy, which is particularly dependent on mobile wireless services. Simply put, the impacts of this proposed merger on wireless competition, economic growth, and technological innovation could be enormous.
(The release notes that Schneiderman announced in March "that this office would conduct a comprehensive review of the proposed merger.")

It comes as something of a surprise to think that there are people with decision-making authority in the DoJ who might actually be listening to AG Schneiderman. The last we heard, he was being kicked off of the the coalition of state AGs' executive committee that's been exploring some sort of settlement with the big banks over their conduct in the collapsed mortgage industry, presumably out of pique over Schneiderman's outspoken opposition to the proposed "settlement," whereby the banksters would kick in some cash in exchange for being relieved of pretty much any further liability -- allowing them, in other words, to "move on" rather than being forced forever to "look back."

Which is apparently how we address all major problems in the 21st century. We just move on

To be sure, Schneiderman isn't alone among the state AGs. There's a small but hardy band (necessarily hardy, considering how they're regarded by most of their fellows) who also take their oath of office seriously. That number emphatically doesn't include the Big Cheese of the state AGs, Iowa's Tom Miller, the man who masterminded the "settlement" and the man who apparently gave Schneiderman the boot.

Miller meanwhile is feeling aggrieved. His longtime sidekick, Assistant AG Patrick Madigan, whined:
We’ve been accused of being in bed with the banks. To say that to a group of people who have spent the last seven to 10 years fighting mortgage abuses day in and day out is an insult of the highest order. It's just unreal.

Yeah, Pat, an insult of the highest order. Just unreal. I expect you and Tom were really insulted by the unreal Taibblog post Matt Taibbi wrote back in April, titled "Best Way to Raise Campaign Money? Investigate Banks," which began:
A hilarious report has come out courtesy of the National Institute of Money in State Politics, showing that Iowa Attorney General Tom Miller – who is coordinating the investigation into the banks’ improper mortgage dealings – increased his campaign contributions from the finance sector this year by a factor of 88! He has raised $261,445 from finance, insurance and real estate contributors since he announced that he was going to be coordinating the investigation into improper foreclosure practices. That is 88 times as much as they gave him not over last year, but over the previous decade.

This is about as perfect an example of how American politics works as you’ll ever see. This foreclosure issue is a monstrous story that is somehow escaping national headlines; essentially, all of the largest banks in the country have been engaged in an ongoing fraud and tax evasion scheme that among other things has resulted in many hundreds of billions in investor losses, and hundreds of thousands of improper foreclosures. Last week, the 14 largest mortgage lenders a group that includes bailout all-stars like Citigroup, Bank of America and Wells Fargo, managed to negotiate a settlement with the federal government that will mandate some financial relief to homeowners who have been victims of improper foreclosure practices. It’s unclear yet exactly what damages and fines will be involved in the federal settlement, or how many homeowners will be affected. But certainly there are some who believe the federal settlement was a political end-run around the states’ efforts to extract their own deal from the banks.

"If the banks had to pay what they actually owed" from their mortgage-related malfeasances, Taibbi wrote, "they would probably all go out of business."

In a dandy post on Tom 'n' Pat's Iowhining, Marcy Wheeler takes a closer look at this "fighting mortgage abuses" that, according to Pat, he and Tom have been doing day in and day out these past seven to ten years. (Doesn't that three-year spread leave a lot of days-to-days unaccounted for?) Notes Marcy:
As in the settlement they signed onto with Countrywide in 2008? The one that–according to NV Attorney General Catherine Cortez Masto, Bank of America has basically blown off?
In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.
(See DDay for more on Masto’s complaint.)

Perhaps Madigan doesn’t understand this. But pointing to a settlement that, in retrospect, appears to have largely been a PR stunt as proof that you’re not in bed with the banks sort of proves the point that you are.

Back in April, Matt Taibbi ventured that the flow of cash from people in and around the mortgage industry to Tom Miller was "just something to keep an eye on," adding, "It would be interesting to see a similar analysis on the money these same characters have thrown at the Obama administration in the last year."

Interesting indeed -- I wonder if anyone ever did such an analysis. As he wrote of the bonanza Tom Miller created for himself by making noises about investigating the banks: "This is about as perfect an example of how American politics works as you’ll ever see."

At least for today, however, on the matter of the AT&T takeover of T-Mobile, the Justice Department has taken a different path. It's something.

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