Sunday, June 09, 2013

Can "Ex"-Blue Dog Steve Israel Be Beaten... Preferably In A Primary?


When making an excuse for reappointing Israel chairman of the DCCC, despite his dismal failure in 2012, the nicest thing Nancy Pelosi could muster to say about his abilities was that he's "reptilian." Although he claims he performed so horrifically in 2012 because his wife was divorcing him, he doesn't seem to have learned a thing and is leading the Democrats to doom again-- forcing vulnerable freshmen far to the right of their Democratic bases which is likely to lead to the Great New Dem Apocalypse of 2014 for almost identical reasons the DCCC brought on the Great Blue Dog Apocalypse of 2010.

Though I was born in Brooklyn, a good part of my childhood-- as well as all of my college years-- was spent on Long Island. I know Steve Israel's district better than the back of my hand. And don't be surprised if voters there oust him. All it would take is a plausible opponent-- either in a primary or in a general election. And while I'd rather see a progressive Democrat take him down, I'd be almost as happy to see a Republican beat him if the Democrats can't get it together to clean up their own mess.

Obama won all three Long Island districts, though not by much-- and underperformed his 2008 totals in all 3. He did better in Peter King's NY-02 than in Israel's NY-03.
NY-01- Obama- 49.6- 49.1%
NY-02- Obama- 51.6- 47.2%
NY-03- Obama- 50.8- 48.2%
While Patty Murray was leading the DSCC from one jaw-dropping victory to another in state after state, cleaning up against the Republicans last November, Israel was losing, losing and losing-- losing everywhere as all his ill-conceived strategies-- starting with pathetic recruitment and even worse targeting--- failed dismally (albeit predictably). And while this was going down, he was occupied fighting with his wife over the spoils of personal corruption... and working with his donors at JPMorgan Chase on a short sale of his Dix Hills home that included a convenient $93,000 bribe from one of the worst bankster outfits on Wall Street.
The original mortgage lenders to Congressman Steve Israel made over $50,000 in campaign contributions to Steve Israel for Congress and more to the Democratic Congressional Campaign Committee he chairs.

Of two original loans to the Congressman and his ex-wife for the Dix Hills home they recently sold in a short sale, one was from Homebridge Mortgage Bankers Corp. The company went bankrupt in 2008 and is currently the subject of numerous lawsuits. Two of the loans they got to refinance the home a year later were both from Homebridge.

Records show Homebridge Chairman and President, Nicholas A. Bratsafolis and his wife Michelle, gave $21,000 to the Steve Israel for Congress Committee and his New York Jobs PAC between 2003 and 2007.

Another listed President of Homebridge Mortgage, David Pankin, from Plainview, contributed $3,500 to the Steve Israel for Congress Committee between 2003 and 2005.

Together, Bratsafolis and Pankin also contributed more than $35,000 dollars to the Democratic National Committee and the Democratic Congressional Campaign Committee, chaired by Israel.

According to Stephen Labate, Congressman Israel’s GOP challenger in the November election for the newly drawn 3rd Congressional District, “The donations tied to the loans raise serious questions of insider sweetheart deals.”

In July of 2004, Congressman Israel and his wife, Suffolk County Family Court Judge, Marlene Budd, purchased the Dix Hills home with two mortgages: one from Homebridge for $464,000 dollars and another from National City Bank for $57,950 dollars. Congressman Israel paid a down payment of $58,050 dollars or roughly 10% on the original purchase.

In August of 2005, Congressman Israel and his wife, refinanced with Homebridge, getting two loans from them, one for $508,000 and one for $63,500 dollars totaling $571,500 for the house they bought for $580,000 dollars in 2004. They satisfied the original loans when they refinanced.

“It is more than curious that just a year after purchasing the home, the congressman refinanced the home at 98.5% of the original purchase price from a mortgage lender whose principle owners just happen to be major donors to the congressman and his party.” according to Chris Thompson, Mr. Labate’s campaign manager. The Israel camp did not respond when asked how much, if any, down payment was part of the refinance deal in 2005.

In October of 2006, Congressman Israel and his wife got another mortgage on the same property for $105,000 dollars from JP Morgan Chase. That brought the total in 2006 to $675,500 dollars for the three mortgages on the Long Island home. In 2006, they also purchased an apartment in Washington, D.C. for approximately $416,000 dollars.

The house in Dix Hills sold recently for $460,000 dollars. In early October, the New York Post ran a story revealing JP Morgan Chase forgave $93,000 dollars on Israel’s “underwater mortgage.” The Israel campaign does not deny the amount and the fact of the JP Morgan Chase loan forgiveness.

Congressman Israel voted in 2008 to bailout JP Morgan Chase with $25 billion, through the Troubled Asset Relief Program (TARP).  JP Morgan paid back the loan with interest.  GOP strategists argue they may have paid back Congressman Israel by forgiving the $93,000 debt he still owed on his “underwater loan” to them.  The Israel camp denies any special treatment and insists that all transactions were above board and by the book.

Ed Cox, the New York State GOP Chairman, released a statement after the New York Post  article responding to the loan forgiveness.  
“On the surface it would appear that he would not qualify for such a reduction, so we asked the House Ethics Committee to investigate the circumstances that surround what looks to be a highly questionable transaction and a potential abuse of power.”
...“Short sale listings on Long Island per MLS (for the period 1/1/12-10/10/12) were 3,348 out of 30,526 total listings. That calculates to 10.9% not the 14.5% offered by the Israel campaign,” according to Mr. Thompson [campaign manager for his 2012 Republican opponent]. “Looking only at homes over $450,000 the number falls to less than 1% and Mr. Israel’s home was 1 of only 246 homes in that price range” he added.

Congressman Israel will not have to pay taxes on the cancellation of debt, because the Mortgage Debt Relief Act, (HR 3648,110th Congress), was extended through 2012 by the Economic Stabilization Act of 2008, Steve Israel voted for.

Before the Mortgage Debt Relief Act, anytime a lender, would write down (or forgive) the borrower’s debt to accommodate a settlement, they were required to report the amount of the write-down to the IRS and it could be considered income to the borrower. Treated as income the written-down amount becomes taxable and would need to be reported on the 1040 tax return. Normally, if a person gets debt forgiveness on an unsecured debt like a credit card, he must pay taxes on it. A temporary measure, The Mortgage Debt Relief Act was to expire, but thanks to the extension of the act through 2012, something Congressman Israel voted for, he will not have to pay taxes on the $93,000 JP Morgan Chase forgave.

Family Court Judge Marlene Budd and Congressman Israel have a combined income of over $300,000. Records show they purchased a 2nd home in Washington D.C. in February 2006.  Two mortgages were taken out on the D.C. apartment from Wachovia Bank: one for $56,667 and another for $302,228 for a total of $358,895. This apartment is not currently listed for sale as reported in Newday recently.

The total mortgage debt on their two homes in October of 2006 was about one million dollars.  Without including any credit card debt they might have had, their debt equity would be greater than the norms allowed for a conventional mortgage at their pay grade, according to the Labate campaign.

Democratic New York State Senator Kirsten Gillibrand, has a televised campaign ad touting the new “Stock Act” she recently passed-- banning insider trading in the stock market by members of Congress based on information they get as members of influential committees. “Members of Congress should play by the exact same rules as families like yours.”

Some Republican’s are questioning whether Mr. Israel who has represented the 2nd Congressional District since 2001 and is now running for the 3rd CD, is playing by the same rules as his own constituents when it comes to his mortgage.

According to Stephen Labate,  “Since the story of the Congressman’s short sale broke, voters all across our district have been expressing their outrage, both to me and to our campaign volunteers.  Many have relayed their personal stories of financial duress and being turned away by their mortgage lenders when they sought relief. Voters are tired of the insider deals our elected officials cut for themselves and I believe they will voice their discontent at the polls on Election Day.”
Election Day came and went and Labate wasn't deemed a plausible candidate by the voters. Israel has portions of three counties. He won them all, although underperformed in the parts of the district, Nassau and Suffolk, where they knew him best.
Nassau- 62,180 (56%)
Suffolk- 51,903 (57%)
Queens- 22,604 (65%)
The new 3rd District includes the Queens neighborhoods of Whitestone, Beechhurst, Little Neck, Douglaston, Fort Totten, Bay Terrace and (a portion of Bayside). On Long Island, Israel's new district lost the towns of Babylon and Islip from his old district. He retains the Town of Huntington and a small western portion of the Town of Smithtown from the previous district. In Nassau County, the district now includes Oyster Bay, Great Neck, Manhasset, Port Washington, Roslyn, Williston Park, Floral Park and New Hyde Park.

Previously a D+8 district, Israel's is now one of only 9 in the whole country rated exactly EVEN, not an R+1 like Peter King's to the south and not a D+1 like Frank LoBiondo's in New Jersey. So Israel had to actually campaign for himself last year. His first instinct, of course, was to throw President Obama under the bus.
“I’ve had disagreements with President (Barack) Obama over certain things,” Israel said. “I have agreements with him on other things, but on the disagreements I’m able to talk to him face to face because I’m in leadership and say ‘we need to do better on this.’”

A source of debate with Obama has been the “Bush tax cuts.”

Obama wants to eliminate the cuts for people earning more than $250,000 each year. Israel said he believes the cut off should be higher in areas of the country that are more expensive to live in.

“Well, $250,000 may make you rich in Hastings, Nebraska, but it does not make you rich in Huntington, Long Island,” Israel said. “I’ve had an argument with (Obama) that we ought to adjust the tax code to reflect the local cost of living.”

Although many Long Island residents are annually among the nation’s highest earners, Israel said the elevated cost of utility bills, property taxes and a high cost of living can make for difficult financial situations for residents of his district.

“Being chairman of the DCCC... puts me in the Oval Office where I can say to the president ‘Rich is relative, Mr. President and I wish you would understand that,’” Israel said.
He won but this cycle the NRCC has said they will target him and spend money trying to defeat him if they can recruit a credible candidate. I wish them all the luck in the world.

How could anyone vote for Steve Israel? He represents the wealthy people of his district-- and only the wealthy people of his disrict. Meet his constituents:

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At 10:32 PM, Blogger Stentor said...

Speaking as someone from Hastings, Nebraska, I can honestly say that earning $250K in my hometown would probably get you a house out at Lake Hastings, preferrably in the Lochland Country Club area & yes you would be one of the wealthiest people in town exceeding that of the Allens or the Spadys, making that same amount of money in Huntington Long still makes you rich, it just makes you richer in my hometown.

Fun Fact: Kool-Aid was invented in my hometown by Elmer Perkins, whose wife Kitty (nee Shoemaker) was a good friend of my Grandmother's. Kool-Aid was originally called Fruit Smack & it came in a liquid form, something I see they've just recently returned to, 76 years later with liquid Kool-Aid.

At 3:49 PM, Anonymous Anonymous said...

I moved out to Islip Hamlet from Brooklyn back in 1990 and in many ways I was a stranger in a strange land. It was solidly Republican back then. When the local Rethug corruption scandals were revealed, Democrats started winning local elections, for Town Supervisor and County Executive among others. But Pete King was unassailable. I was one block south of Israel's district, and not once did the Dems mount a credible candidate against King or adequately support a challenger.

Then the district lines changed and I was suddenly in Israel's district for the 2012 election. I don't remember if I voted a third party or just skipped that line, but he wasn't getting my vote, no matter what.

Now the lines are redrawn again, and I'm back in King's district. Sigh. The area has lapsed back toward the Republicans for local elections, even though it narrowly supported Obama last year. I think economic/tax issues are the paramount concerns. If the downturn had affected the town's property values more, it would have been much worse.

At 9:33 PM, Anonymous me said...

The sooner Pelosi gets voted out, the better off the country will be.


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