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.