By Pam Martens and Russ Martens: February 9, 2017
Jeb Hensarling is the Republican Chair of the Financial Services Committee in the U.S. House of Representatives. Despite the seriousness of that job, Hensarling displays amazing ignorance of the inner workings of Wall Street at the hearings over which he presides. Unlike Senator Bernie Sanders who stumped around the country for more than a year during his primary campaign, reinforcing to Americans what they already suspected, that “the business model of Wall Street is fraud,” Hensarling wants to kill the few restraints on this criminal cartel that currently exist. He has been well financed by Wall Street to get the job done.
Among Hensarling’s largest donors for his 2016 re-election campaign were every major Wall Street bank, including two admitted criminal felons (JPMorgan Chase and Citigroup’s Citicorp) as well as those charged with market rigging and serial frauds against the investing public. Wall Street mega banks giving $10,000 or more to Hensarling’s campaign included: Bank of America, $15,000; JPMorgan Chase $14,700; Goldman Sachs $12,700; UBS $10,500; Citigroup $10,000; Credit Suisse $10,000; Morgan Stanley $10,000; Wells Fargo $10,000; and Wall Street’s trade association, the Securities Industry and Financial Markets Association (SIFMA), which gave Hensarling $10,000. (Our source is the Center for Responsive Politics which notes that “The organizations themselves did not donate, rather the money came from the organizations’ PACs, their individual members or employees or owners, and those individuals’ immediate families.” Corporations are not legally allowed to donate directly to campaigns.)
Over the past week, Hensarling has been on a public relations mission to portray the Wall Street-hated Consumer Financial Protection Bureau (CFPB) as a “rogue” federal agency and smear Senator Elizabeth Warren as its mastermind. Last night, this headline appeared over an opinion piece by Hensarling in the Wall Street Journal: “How We’ll Stop a Rogue Federal Agency: Congress can defund Elizabeth Warren’s unaccountable and unconstitutional CFPB.”
Millions of Americans understand that this is simply more of the new Trump-era Orwellian Reverse Speak. The danger is that big media is carrying Hensarling’s false propaganda to millions of uninformed Americans who are too busy struggling to feed their families to follow the Machiavellian plunderings by Wall Street. Hensarling has also been making the rounds of cable news shows repeating his attacks on the CFPB and calling for its courageous Director, Richard Cordray, to be fired by President Donald Trump.
In reality, the CFPB is the most consumer-friendly of the Wall Street watchdogs. It allows those who have been victimized by financial firms, even where small amounts of money are involved, to file a complaint and receive a response. Wall Street hates the fact that these complaints go into a permanent database, which can be mined by class-action attorneys and prosecutors looking for patterns of fraud and by media outlets like Wall Street On Parade to keep the public informed. (See our related articles below.)
Hensarling was a long time aide to the master of fronting for Wall Street deregulation – Senator Phil Gramm. Gramm served as Chair of the Senate Banking Committee from 1995 to 2000, which included the fateful year that the Gramm-Leach-Bliley Act was passed in 1999. That legislation repealed the Glass-Steagall Act which had protected the nation by separating banks holding insured deposits from the speculating investment banks of Wall Street. Just nine years after it was repealed, Wall Street crashed in epic fashion, taking the U.S. economy with it. Gramm’s blind march to the drumbeat of special interests was blamed by Time Magazine as a key contributor to the financial collapse in 2008. Time wrote:
“…Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. Credit-default swaps took down AIG, which has cost the U.S. $150 billion thus far.”
According to the database at the Center for Responsive Politics, Gramm’s largest campaign donors included the very same serially charged Wall Street banks that are now financing Hensarling. (See here.)
Gramm’s deregulation push was a family affair. His wife, Wendy Gramm, was the Chair of the Commodity Futures Trading Commission (CFTC) from 1988 to January 1993. Public Citizen reported on her tenure as follows:
“In 1992, as the first step in its business plan to profit on the speculation of energy, Enron petitioned the CFTC to make regulatory changes that would limit the scope of the commission’s authority over certain kinds of futures contracts. Immediately before leaving the CFTC, Gramm muscled through approval of an unusual draft regulation that would do just that – it narrowed the definition of futures contracts and excluded Enron’s energy future contracts and swaps from regulatory oversight. Although her actions were criticized by government officials who feared the change would have severe negative consequences (as, in fact, it did), Gramm was rewarded five weeks after she left the CFTC with a lucrative appointment to Enron’s Board of Directors. Between 1993 and 2001, when the company declared bankruptcy, Enron paid Gramm between $915,000 and $1.85 million in salary, attendance fees, stock option sales, and dividends.”
Phil Gramm also became a very wealthy man while the U.S. suffered the worst financial collapse since the Great Depression, in no small part because of his handiwork. In the same year that he left Congress, 2002, Gramm joined the large Wall Street bank, UBS – one of his largest campaign donors – as Vice Chairman. He remained in that post for a decade. According to the Wall Street Journal, in 2012 Gramm stepped down as Vice Chairman of UBS but remained on as a “consultant.”