Senator Pat Toomey Launches a Red-Scare Campaign Against Biden’s Nominee to Head a Top Wall Street Bank Regulator
By Pam Martens and Russ Martens: October 7, 2021 ~
Senator Pat Toomey
Yesterday, at 4:19 in the afternoon, Wall Street On Parade received an email from the nice communications folks at the Senate Banking Committee, which is chaired by Senator Sherrod Brown of Ohio, a progressive Democrat who has had about all he can stand of the robber barons on Wall Street. The ranking member of the Senate Banking Committee, who was supposed to become the Chair of the Committee in a Trump coup d’état, is Republican Pat Toomey of Pennsylvania, who has been serially funded and backed by Koch-funded front groups. Koch Industries owns a big trading operation, so it is very much vested in what happens in terms of stricter regulations for Wall Street. (For the role of Koch money in the insurrection at the Capitol on January 6, see our report: The Money Trail to the Siege at the Capitol Leads to Charles Koch and Koch Industries.)
The headline of yesterday’s email from the Senate Banking Committee read: “Brown Blasts Ranking Member Toomey for Red Scare Attacks On Saule Omarova,” along with this brief statement from Senator Brown:
“Before today, I thought red scare McCarthyism was rightly relegated to the dustbin of history. Any American citizen who fled communist repression – whether it be FDIC Chair Jelena McWilliams or OCC nominee Saule Omarova – should be lauded for their courage and conviction. I believe that my colleagues – from both sides of the aisle – will reject such character assassinations.”
Naturally, our curiosity was piqued. What was Toomey up to this time in service to the Koch corporate machine. It turns out that Toomey had spent 11 minutes on the Senate floor yesterday bashing President Biden’s nominee, Saule Omarova, to head the Office of the Comptroller of the Currency (OCC), the federal regulator of national banks. The thrust of Toomey’s slurs is that Omarova is a radical Soviet sympathizer because she happens to have been born in the Kazakh Soviet Socialist Republic (now Kazakhstan) and attended Moscow State University on a Lenin Personal Academic Scholarship. That was more than three decades ago. Toomey now plans to dig up a paper on Marx that Omarova wrote in her early twenties and launch a full-scale red scare.
Omarova relocated to the United States in 1991. She received her Ph.D. from the University of Wisconsin-Madison in 1999 and her law degree from Northwestern University in 2001. She is currently a law professor at Cornell University Law School. You can read her bio here.
It should be noted that Republicans were not throwing out commie scares when Omarova served in the George W. Bush administration in the Department of the Treasury as a special advisor on regulatory policy. What Toomey is doing now is simply being a toady for Wall Street interests that don’t want to see this corrupt system reformed because it could crimp Wall Street’s ability to continue looting and plundering the American people.
Omarova has been on Wall Street’s watch list since 2013 when she blew the whistle on its stealth holdings of physical commodities in Senate hearings. See our report: Woman Who Helped Expose Wall Street Mega Banks’ Vast Holdings of Physical Commodities Is Nominated as a Top Bank Regulator.
The OCC that Omarova would head supervises banks that operate across state lines. These include mega banks like JPMorgan Chase, which has more than 5,000 local bank branches across the country. This system is in radical need of overhaul because despite JPMorgan Chase’s five felony counts and unconscionable conduct since 2014, its prior regulators have allowed it to grow even larger and become more dangerous.
In addition, the Federal Reserve has had to bail out these behemoth banks for the second time in 13 years as the banks’ crime sprees continue to disgrace the United States around the world. Just last October, Goldman Sachs and its Malaysian unit admitted to conspiring to pay $1.6 billion in bribes to government officials in Malaysia and Abu Dhabi in order to win lucrative deals.
And now it appears that the central bank of the United States, the Federal Reserve, has climbed so far in bed with these Wall Street banks that two of the banks, Goldman Sachs and Citigroup’s Citibank, have facilitated scandalous trading activity on the part of Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren, respectively.
This is not the first time that corporate money has funded a red-scare campaign against a Wall Street regulator.
During the Republican Presidential debate on November 10, 2015, a red-scare ad ran showing giant banners of the Consumer Financial Protection Bureau (CFPB) Director, Richard Cordray, and Senator Elizabeth Warren, who had pushed for the creation of the agency, draping a big wall like those of Soviet Dictators. (Watch the crazy ad below.)
The advertisement was grossly misleading, overtly suggesting that the job of the CFPB is to deny car loans and mortgages to regular folks seeking credit. The agency, in fact, has absolutely nothing to do with approving credit applications. Its job is to protect consumers and punish financial institutions that are serially ripping off customers. For example, in July of 2015, Citigroup, was ordered by the CFPB to reimburse an estimated $700 million to 7 million of its credit card customers for deceptive marketing and billing for services that were never provided. The agency has also gone after student loan and mortgage servicers for ripping off borrowers with excessive fees and unwarranted interest payments.
But what Wall Street hates most about the CFPB is that it makes it easy for consumers to file a complaint and provide details on exactly how they’ve been fleeced. Even more dangerous to Wall Street, the CFPB is actively inviting whistleblowers inside financial corporations to blow the whistle directly to them on the lawbreaking. And the final straw for Wall Street is that journalists can access the CFPB’s complaint database and see Wall Street’s latest innovations for looting the American people.
Toomey is the obvious pick to lead this latest red-scare assault. According to the Center for Responsive Politics, over the course of his political career, Toomey’s largest donor to either his Campaign Committee and/or Leadership PAC has been the Club for Growth, which has provided more than $1.26 million to Toomey’s coffers. That’s more than 7 times the amount of Toomey’s second and third largest donors, the hedge fund Elliott Management and Goldman Sachs. Toomey served as the President of Club for Growth from 2005 to 2009.
The Club for Growth is a dark money group that has pushed for things that the majority of Americans are against: the privatization of Social Security; the destruction of workers’ rights and unions; and the deregulation of dangerous industries.
Another front group that has benefited Toomey is Freedom Partners Action Fund. It pumped at least $4.3 million into running attack ads against Toomey’s Democratic challenger, Katie McGinty, in the 2016 senate race in Pennsylvania.
Charles Koch, the billionaire Chairman and CEO of the fossils fuels and trading conglomerate, Koch Industries, and his trust, gave $14 million to the Freedom Partners Action Fund Super Pac from 2014 through July 2018 according to the Center for Responsive Politics. Time Magazine’s Philip Elliott reported in January 2017 that “In seven of the eight up-for-grabs U.S. Senate races last year, the Koch-backed candidate won. In all, Koch-backed candidates at all levels of races prevailed 96% of the time—a record any outside group would covet.”
The Freedom Partners Action Fund was an affiliate of the dark money group, Freedom Partners, which was organized as a 501(c)(6) tax exempt organization that did not have to reveal its donors to the public. When we examined the Board of Directors of Freedom Partners in 2018, we found that all but one of its nine-member Board of Directors was a current or former Koch company employee. At the time, its Board Chair, Mark Holden, was simultaneously serving as General Counsel of Koch Industries. Freedom Partners shut down its operations in 2019 but there’s certainly no shortage of Koch-funded front groups remaining to fill any void.
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