In his State of the Union address last week, President Obama announced what Robert Kuttner, co-editor of The American Prospect, describes as maybe “the most fateful political and economic development of the election year”—the formation of an interagency task force to finally investigate the mortgage and lending practices that led to the collapse of the economy and trillions of dollars in lost wealth, with New York Attorney General Eric Schneiderman named as co-chair.
It remains to be seen whether Schneiderman will be given the extensive resources and manpower he needs to conduct a thorough and aggressive investigation, or if the Wall Street faction within the Administration will stonewall the process. But I’m confident in this: Schneiderman is the right man for the job, and he’s not about to let himself be co-opted for the president’s re-election bid. Throughout his career he’s been a steadfast champion of causes because they are right, not because they are popular or politically expedient. He’s been successful because he works to move voters closer to his positions, and sets a course toward a better future and better possibilities. If he’s being obstructed, he’ll let people know.
Already, Schneiderman and a few other State Attorneys General have protected the people’s interests by drawing a firm line during negotiations between the federal government, the bankers and their fellow attorneys general on a foreclosure settlement. When most were ready to cave and grant the Big Banks wide immunity—putting their egregious and likely fraudulent behavior into a sealed box never to be examined—Schneiderman refused to sign on, even when he was kicked out of the negotiations. Although no deal is yet finalized, early indications are that it will be a far better one for the public than anyone anticipated, leaving the bulk of bad behavior on the table for possible prosecution (including the securitization and peddling of toxic mortgages, mortgage origination fraud, foreclosure mills and other acts of malfeasance.)
In covering (and working as an editor with) Schneiderman over the years, I’ve grown to admire him as someone who fights for what he calls “transformational politics,” which he described in the pages of The Nation in 2008 this way: “Transformational politics is the work we do today to ensure that the deal we can get on gun control or immigration reform in a year—or five years, or twenty years—will be better than the deal we can get today. Transformational politics requires us to challenge the way people think about issues, opening their minds to better possibilities.… History teaches that the overwhelming majority of elected officials follow movement builders outside government when it comes to the new and risky.”
Schneiderman didn’t settle for a bad deal on foreclosures—he held out for a better one and when outside pressure came to bear on his colleagues they were forced to open their eyes to better possibilities.
That’s one of the reasons why there is such value in having Schneiderman on the inside leading this investigation. He recognizes that it’s popular pressure that has created this “accountability moment,” and he’s sure to make sure that others on the task force see it as well. As he explained on Up with Chris Hayes on Sunday, “This is not just about the president. This is about the American people having risen up over the past year. The political atmosphere right now is so different than it was when I started [addressing] this conflict over giving the banks a [liability] release over a year ago. And that’s not because of me, that’s because of the grassroots uprising that’s taken place across this country.”
The task force has already announced eleven subpoenas, and Schneiderman expects in the next few weeks to see more subpoenas, more agencies taking action, and cases filed. He anticipates “concrete results” in the next six to eight months. He’s confident that he has the resources, the jurisdiction since so many agencies are involved—including the US Attorneys’ offices, the IRS and the CFPB—and the will.
His goal is the same one he’s had leading investigations in New York: “Accountability for those who blew up the economy, relief for those who were harmed, and also just to stop these guys from rewriting history—because [it was] reckless deregulation that caused this crisis,” he told Nation editor-at-large Chris Hayes.
Schneiderman understands he will need mobilization from the outside to make sure his fight on the inside reaches its potential. Then maybe we will finally see some accountability and restitution for the economic destruction caused by greed, recklessness and outright fraud.
