By Pam Martens and Russ Martens: February 4, 2020 ~
If you stayed up late into the night waiting for the Iowa Caucuses to report on the winner in the Democratic bid for President, you are likely in a foul mood this morning. As of 6:30 a.m. this morning, vote tallies had not been officially released for any of the more than 1600 precincts. That stands in contrast to prior Iowa Caucuses when 25 percent of the votes were reported by 10 p.m. on the same night as the caucuses and 85 percent were reported by 11 p.m.
As cable news commentators vented their frustrations last night, shortly after 1 a.m. the Iowa Democratic Party said they would be manually tallying the data to make sure that the results could be reported with “full confidence.” The Iowa Democratic Party had earlier in the evening held a meeting with campaign representatives from the various Democratic candidates but refused to take any questions concerning the delay.
CNN had people on the ground in various precincts and they reported on air that an app that was supposed to be used to relay results from precincts had failed to work in some cases and precinct captains who attempted to call in the results were still on hold after more than an hour.
The reports from zero precincts didn’t stop Democratic Presidential candidate Pete Buttigieg from delivering what sounded like a victory speech to his supporters. Buttigieg said this:
“Tonight, an improbable hope became an undeniable reality. So we don’t know all the results, but we know by the time it’s all said and done — Iowa, you have shocked the nation. Because by all indications, we are going on to New Hampshire victorious.”
Buttigieg is an openly gay man who turned 38 on January 19. Buttigieg served two terms as Mayor of South Bend, Indiana. He has never held any elected office in the federal government.
Senator Amy Klobuchar of Minnesota also appeared to have divined herself to have come out as one of the top dogs in the contest. In her speech, the first to appear on air last evening, she said that “We know there’s delays but we know one thing: we are punching above our weight.”
Klobuchar, who was endorsed along with Senator Elizabeth Warren by the Wall Street-friendly New York Times, would have a serious problem picking up votes from Senator Bernie Sanders’ supporters if she became the Democratic candidate. Among Klobuchar’s top 20 campaign contributors, as of this date, three are Wall Street mega banks with serial histories of fraud: Goldman Sachs, JPMorgan Chase and Wells Fargo. Four more of her top 20 contributors are law firms that regularly serve as outside counsel to Wall Street’s mega banks. Two of those law firms are particularly noteworthy.
The law firm Paul Weiss is listed at the Center for Responsive Politics as Klobuchar’s largest donor. Paul Weiss has for decades been closely aligned with the serially-charged mega Wall Street bank, Citigroup. As we previously reported:
“Brad Karp, a partner at the 737-attorney-strong Wall Street law firm, Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been Citigroup’s go-to guy for fraud allegations since the company was born out of the too-big-too-fail merger of Travelers Group insurance, its myriad Wall Street investment banks, brokerage units, and Citicorp, parent of Citibank.
“When the London-based private equity firm, Terra Firma, claimed it had been lied to and defrauded by Citigroup, making it overpay for the purchase of EMI, a British music label, in 2007, Karp and colleagues wrung an 8-0 decision from the jury in favor of Citigroup. Karp was also on hand to witness victory when the trustee for the bankrupt Italian dairy giant, Parmalat, charged Citigroup with fraud. Then there were fraud charges connected to Citigroup’s involvement in the collapse of WorldCom and Enron – along with auction rate securities, rigged stock research and understating its exposure to subprime debt by $39 billion. Karp, Karp, and more Karp.
“The litany of fraud charges against Citigroup, accompanied by the perpetual get-out-of-jail-free card reliably delivered by Brad Karp, has become so ubiquitous that it raises the obvious question: is Citigroup the hapless target of a world-wide network of frivolous lawsuit filers, or does Brad Karp have some secret sauce for getting a serial miscreant off the hook?”
Things have worked out well for Karp. He is now the Chairman of Paul Weiss. Things have not worked out so well for the long-term shareholders of Citigroup who lost the bulk of their investment in the company during and after the financial crash of 2008 and have yet to recoup their losses. The American taxpayer also did not make out so well: Citigroup received the largest bailout of any bank in U.S. history, including an astronomical $2.5 trillion cumulatively in secret low-cost, revolving loans from the New York Fed (its “regulator”) from December 2007 through July 21, 2010 according to an audit by the nonpartisan watchdog of Congress, the Government Accountability Office.
Even after its humiliating collapse and multi-billion dollar fines with regulators over allegations of fraud, Citigroup brazenly continued to flaunt the legislation put in place to rein in the abuses on Wall Street.
In December 2014, Senator Elizabeth Warren publicly chastised Citigroup for effectively repealing the part of the Dodd-Frank financial reform legislation that was meant to prevent derivatives from being housed in the federally-insured banks owned by Wall Street’s trading houses like Citigroup. Warren said this on the Senate floor:
“Mr. President, I’m back on the floor to talk about a dangerous provision that was slipped into a must-pass spending bill at the last minute to benefit Wall Street. This provision would repeal a rule called, and I’m quoting the title of the rule, “Prohibition Against Federal Government Bailouts of Swaps Entities.”…
“Mr. President, in recent years, many Wall Street institutions have exerted extraordinary influence in Washington’s corridors of power, but Citigroup has risen above the others. Its grip over economic policymaking in the executive branch is unprecedented. Consider a few examples:
“Three of the last four Treasury Secretaries under Democratic presidents have had close Citigroup ties. The fourth was offered the CEO position at Citigroup, but turned it down.
“The Vice Chair of the Federal Reserve system is a Citigroup alum.
“The Undersecretary for International Affairs at Treasury is a Citigroup alum.
“The U.S. Trade Representative and the person nominated to be his deputy – who is currently an assistant secretary at Treasury – are Citigroup alums.
“A recent chairman of the National Economic Council at the White House was a Citigroup alum.
“Another recent Chairman of the Office of Management and Budget went to Citigroup immediately after leaving the White House.
“Another recent Chairman of the Office of Management and Budget is also a Citi alum — but I’m double counting here because now he’s the Secretary of the Treasury.
“That’s a lot of powerful people, all from one bank. But they aren’t Citigroup’s only source of power. Over the years, the company has spent millions of dollars on lobbying Congress and funding the political campaigns of its friends in the House and the Senate.
“Citigroup has also spent millions trying to influence the political process in ways that are far more subtle — and hidden from public view. Last year, I wrote Citigroup and other big banks a letter asking them to disclose the amount of shareholder money they have been diverting to think tanks to influence public policy. Citigroup’s response to my letter? Stonewalling. A year has gone by, and Citigroup didn’t even acknowledge receiving the letter…”
Klobuchar’s third largest donor is the law firm Wachtell, Lipton, Rosen & Katz. Marty Lipton is a founding partner of the law firm and represented Citigroup’s long-time Chairman and CEO, Sanford (Sandy) Weill for years. In Weill’s autobiography, The Real Deal, Weill calls Lipton a close friend.
Weill is the former Wall Street titan who forced the government’s hand to repeal the Glass-Steagall Act, the Depression era investor protection legislation that made it illegal for banks holding insured deposits to merge with the trading houses on Wall Street, a combustible combination that led to the 1929 to 1933 collapse on Wall Street. (It took only nine years from the Glass-Steagall repeal in 1999 for Wall Street to collapse once again and take down the U.S. economy.)
According to Weill’s book, Marty Lipton’s law firm was the very firm that counseled him on how he could maneuver around the Glass-Steagall Act and merge his Wall Street brokerage firm, Smith Barney, and insurance operations, Travelers Group, with a large bank holding insured deposits (Citicorp, parent of Citibank). Weill writes:
“Around this time, we had been discussing strategic options with Marty Lipton and his team of banking lawyers at Wachtell Lipton. The firm’s lawyers captured my attention by claiming they could help us circumvent the legal issues involved with merging with a bank. Two powerful federal laws, the Bank Holding Company Act of the 1950s and the Depression-era Glass-Steagall Act, stood in our way…”
Weill completed the merger in 1998. The Clinton administration repealed the Glass-Steagall Act the very next year. Wall Street collapsed nine years later under an unprecedented amount of corruption, fraud and double-dealing. Weill walked away from Citigroup in 2006 as a billionaire.
If Amy Klobuchar doesn’t know this history, she’s not the person the country needs in the Oval Office. If she does know this history and is still willing to take money from Citigroup’s law firms, and other double-dealing Wall Street banks, then Minnesota may want to find themselves a new Senator come the next election.