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Don't Worry About Today's Retirees: Boomers Are Fine, (but Gen X…The Wall Street Journal [subscription required] adds a new wrinkle to the story of efforts by subprime mortgage lender Ameriquest to use campaign cash to curry favor with the government. Ameriquest's parent, ACC Capital Holdings, has paid $325 million to settle regulators' claims that it charged excessively high mortgage rates and didn't adequately disclose loan risks. The Journal's story today highlights the $20.5 million Ameriquest spent at the state and federal government levels to block legislation that would have limited its predatory lending practices.
But as I posted in August, Ameriquest's cash helped boost the fortunes of president Bush. Bush, who used home ownership politics to get re-elected, received $7.8 million from Ameriquest for his 2004 reelection campaign, his inauguration and for Laura Bush's library foundation.
Ameriquest's most interesting pay-to-play technique was to give Rolling Stones tickets and cash to state legislators. For instance, according to the Journal, "Arnold Schwarzenegger's campaigns received at least $1.4 million, along with stacks of tickets to a Rolling Stones concert that were used to lure big donors." And Ameriquest also handed out Rolling Stones tickets to state legislators in Georgia, Maryland, Nevada, Oregon, Utah, Washington and California.
What did Ameriquest get for all its giving?
It got two state legislatures to overturn legislation that blocked its business and kept a third state from introducing such legislation. In Georgia, the subprime industry helped overturn a law it opposed that required proof that a refinancing of any home loan less than five years old would have a tangible-net-benefit. In New Jersey, the subprime industry also rolled back the tangible-net-benefit rule. And In Texas, Ameriquest's contributions helped block a law that would have restricted home appraisers from overvaluing homes -- a contributor to subprime problems.
Will the subprime disaster become part of president Bush's legacy? Ameriquest's cash and Rolling Stones tickets suggest it already is part of the legacy of several state government officials.
Perhaps Ameriquest's CEO, Roland Arnall, was inspired by the lyrics of the Rolling Stones' song Sympathy for the Devil:
Please allow me to introduce myself
I'm a man of wealth and taste
I've been around for a long, long year
Stole many a man's soul and faith.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
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Reader Comments (Page 1 of 1)
5-25-2008 @ 5:44AM
Trat50 said...
The sub prime disaster IS VERY MUCH part of president Bush's legacy. This financial catastrophe isn't over by a long ways. Here' a real picture of the Bush legacy:
http://www.youtube.com/watch?v=REWIfumx_ow
1-18-2008 @ 12:52PM
Nikki said...
What about the people who went and took out the loans in the first place was Bush signing the loan papers for them!NO, so how the hell is it his fault, if you know you can't afford something or in most cases don't know what an adjustable rate is then you have no buisness owning a home in the first place or simply educate youself first!I think its pathetic! to say the least and just shows how Dumb most Americans really are. Sorry, but that is how I feel,especially since my husband and I bought our first home in our early twenties and we knew to talk with a financial advisor before we took out a home loan knowing that it wasn't just Monoply money we were playing with
1-19-2008 @ 12:11AM
Trat50 said...
Bush is a politician on payola that's sunk USA into financial disarray. The policy of lowering interest rates & printing more money has finally come back to bite back. The US Dollar is now in real double digit inflation thanks to the Bush middle east monopoly game. The recession is here thanks to his monkey economics. He's completely to blame as Ameriquest's cash boosted Bush, who used home ownership politics to get re-elected, received $7.8 million from Ameriquest for his 2004 reelection campaign, his inauguration and for Laura Bush's library foundation. May his legacy reflect his immorality.
Here is the Bush legacy:
http://www.youtube.com/watch?v=REWIfumx_ow