by Soft Bulletin
Tue May 27, 2008 at 08:42:33 PM PDT
Keith Olbermann has
broken a story on McCain's National Campaign Co-Chair and economic advisor, Phil Gramm. Turns out Gramm was a Registered Lobbyist for the Swiss Bank UBS, which is tens of billions deep in the subprime crisis.
moreBy Josh Marshall
05.27.08 -- 10:32PM
Below I
noted MSNBC's story tonight about how fmr. Sen. Phil Gramm (McCain's economics advisor) was advising him on his subprime mortgage bailout policy while Gramm was also a registered lobbyist for the Swiss bank UBS.
Now, it's clear from the report that UBS had some exposure on the subprime front. But I wasn't aware of the true extent of it. TPM Reader
KB sends in articles
Businessweek and
Forbes that show just how big a player UBS was. Forbes says that UBS is among the banks worst hit by the global credit crisis, particularly in their direct exposure to the US subprime market. According to Forbes, UBS has some $37 billion in write-downs on assets tied to bad US mortgages. In other words, the bank's very life appears to be on the line in how the US government chooses to handle the matter.
As MSNBC reported, UBS
deregistered Gramm as a lobbyist for the company on April 18th, though he continues to serve as a
vice chairman of the bank. But that was
fully a month after McCain's speech outlining his own approach to the crisis.
Many of the lobbying connections the press has dug up on McCain have been embarassing. But I'm not sure any have really had teeth until this one. After all, how much does the average voter care that Charlie Black represented a lot of foreign dictators? A stench, yes? But finding out that McCain had a major subprime lender bank lobbyist whispering in his ear when McCain told the public that it was basically tough luck if they lost their houses?
(
ed.note: Let me clarify one point. UBS was not a bank lending people money for home loans. Their very high level of exposure came from buying paper instruments backed by iffy mortgages. The way this works is that lender company X lends a bunch of people money to buy homes. Then company X packages all that together and sells it to a company like UBS -- which bought quite a lot. There are many more levels of complexity, as I'm sure our banking industry readers will point out. But this is the basic point -- they are heavily exposed to the fallout from the subprime crisis without having been a first order lender themselves.)
by Spud1
Wed May 28, 2008 at 04:26:07 AM PDT
A quick diary to add more to the growing UBS/John McCain story,
MarketPlace reports this morning that the bank that caters to the very wealthy has warned some of its employees not to travel to the U.S., for fear that they might be arrested.
A couple of weeks back, a UBS banker was
indicted on tax evasion charges, after it was alleged that he helped an American real estate developer to avoid taxes. Apparently, this was no rogue employee.
Forbes has the story, via Atrios:
UBS has told members of its former private banking team responsible for rich US clients not to travel to America, the Financial Times reported.
The Swiss bank has also made lawyers available to the more than 50 bankers involved, many of whom have left UBS since it decided last November to wind down its cross-border private banking business for US customers.
UPDATE below the fold:
A former employee is believed to be
helping the investigation:
It also emerged that American prosecutors are being helped by a former UBS employee who has leaked names of US clients of the Swiss bank. It is thought that the former employee may also be under investigation for potential wrong-doing.
and it seems that UBS may be involved in tax evasion in
Germany.
You can see the lobbying disclosure forms at the MSNBC link above. They are as advertised. (On all except the first, note the little "Next" button at the upper left; it takes you to subsequent pages, on some of which you will find Gramm's name.)
Gramm is bad news with or without his lobbying job. As I
wrote two months ago, he was heavily involved in the Enron crash, and some of his legislation helped make the current crisis possible. To quote
James Galbraith:
"Phil Gramm's career was as the most aggressive advocate of every predatory and rapacious element that the financial sector has," Galbraith said. "He's a sorcerer's apprentice of instability and disaster in the financial system."
But it just defies belief that McCain would have, as his main economic advisor and one of the people responsible for his plan to deal with the mortgage crisis, someone who was a paid lobbyist for a bank that was
heavily involved in that crisis, a firm that has just
advised some of its employees not to travel to the US for legal reasons, and that stands to gain or lose a lot depending on what the federal government decides to do about it. What's next: the revelation that McCain's policy on Iran is being written by a lobbyist for the makers of cruise missiles? Or that he has outsourced his health care policy to a lobbyist for the
National Funeral Directors Association?
moreVideo:
Olbermann: McCain Economic Policy Shaped by Bank LobbyistMcCain is an ethically challenged candidate.
McCain linked to swiftboating group Vets for Freedom Kerry: "when McCain disavows diplomacy, he is stacking the deck in favor of war."edited typo in title
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