"Everyone Would Be Tied for Last"

Nina Turner, Ro Khanna and Rick Santorum debating Sen. Kamala Harris' potential presidential candidacy

by Gaius Publius

Much is being written these days about newly minted Sen. Kamala Harris, former Attorney General of California and in the eyes of many, one of the more likely candidates for president in 2020, at least so far. (See here, here and the video above.)

The questions being asked include, "How progressive is she?" and "Can she be moved more to the left than other prospective candidates"? Also, "If she gave Steve Mnuchin's OneWest Bank a pass for fraud as a prosecutor, can she be trusted at all?" The go-to piece about Harris, Mnuchin and his bank was written by David Dayen, also author of the excellent Chain of Title, a look at the mortgage fraud story in its broadest context.

Dayen has written a follow-up to his first Kamala Harris story that, in effect, says that there's nothing special about Harris in her treatment of mortgage fraud, since no one in that era, or even today, treats mortgage fraud with anything like what it deserves. His bottom line:

In other words, if you were to rank the performance of law enforcement officials during this period, everyone would be tied for last.

One of the most striking aspects of his latest piece is not his seeming defense of Kamala Harris — in fact, he's not defending her at all — but his indictment of a system of fraud-protection that's as wide and deep in scope as it is damaging in effect.

The Crime of the Century

Dayen rightly calls the 2008 mortgage crisis "the crime of the century." He writes:

Let’s recognize that no public official in this country, from Barack Obama on down, covered themselves in glory during the foreclosure crisis; to say that Harris failed to prosecute bankers is simply to say that she was a public official with authority over financial services fraud in the Obama era.

From the late Bush years through most of Obama’s presidency, at least 9.3 million American families lost their properties, whether to foreclosure or forced sale. The original sin of faulty loan originations, inflated appraisals, doctored underwriting, and improper placement into subprime loans led to fraudulent misconduct in securitization, loan servicing, loan modifications, and foreclosures, with millions of faked and forged documents used as evidence for the final indignity of eviction. There’s not a single step of the mortgage process that wasn’t suffused with illegal fraud during the housing bubble and its collapse.

The crisis resulted in a punishing recession and countless destroyed lives, not to mention what has been credibly described as an “extinction event” for the black and Latino middle class. Yet from New York to California, Arizona to Florida, Washington state to Washington, D.C., the political class and law enforcement elite responded largely with indifference. Powerful bankers with armies of lawyers were allowed to get away with the crime of the century (thus far).

The individual actors in this drama — U.S. AG Eric Holder, NY state AG Eric Schneiderman, and so many others — are none of them covered glory, but smeared with its opposite:

Though he was OneWest’s chairman, Mnuchin was never at risk of indictment or conviction. At best, California would have extracted a decent-sized fine from the company—paid for by shareholders—and guarantees meant to deter further law-breaking; it’s possible that Mnuchin, his reputation sullied, would not have ended up in charge of federal banking policy. This watered-down version of public accountability was seen as the best possible outcome, and Harris didn’t even go for that.

This doesn’t make her particularly special. Eric Holder and Lanny Breuer took hiatuses from their careers as corporate lawyers to join Obama’s Justice Department and ensure light punishment for financial abuses. Tom Miller, the attorney general of Iowa, ran the 50-state investigation of foreclosure fraud, which investigated nothing and moved directly to a weak settlement that delivered 90 percent less relief for homeowners than promised. Eric Schneiderman, New York’s attorney general, sold out supporters by agreeing to that settlement, saving it from the brink of collapse. He co-chaired a so-called “task force” on bank crimes that did nothing but ink more toothless settlements and proudly proclaim fake headline numbers about fines from behind a podium.

In other words, if you were to rank the performance of law enforcement officials during this period, everyone would be tied for last.

Read Dayen's piece to see how this heartbreaking tale is still going on. It's horrifying in its destruction of lives, and Dayen is right to highlight it.

"Not Particularly Special"

But back to Kamala Harris. It's true, as Dayen says, that within this group — where everyone is tied for last — Kamala Harris is not particularly special. But if "not particularly special" and "tied for last" is leading the field in the early race for the 2020 nomination, Democrats may be in bigger trouble than any of them realizes.

GP