Sen. Stivers Tells KSR He’s Blocking Rupp Arena Because He Hasn’t Read Documents He’s Had for Days

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March 26, 2014
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The Republicans in the Kentucky State Senate, led by Senate Prez Robert Stivers, have blocked the Rupp Arena renovation project. They passed a budget that didn’t include the money for Rupp putting the plans to remake Rupp in serious jeopardy.

The Senate and House will enter negotiations and there is still a chance the funding will be restored — however…

On the state’s most powerful political radio show this morning, Kentucky Sports Radio, Matt Jones and Ryan Lemond gave Bobby Stivers a call to discuss the issue, and if you listen to Stivers, it doesn’t much sound like he has any intention of letting his Senate Republicans move forward on Rupp financing.

In fact… from start to finish, it sounds like an amateur trying to play politics. As Matt Jones tells Stivers at the end of the call, “This was not your finest hour”

Some highlights:

  • Stivers says he didn’t get the financing documents until two weeks ago, implying that he hasn’t had time to read them.
  • Stivers says he didn’t get the bill until Monday, implying that he hasn’t had time to fully understand that either.
  • He says that because the city of Lexington is using millions of dollars it does have to fund police, fire and low-income housing initiatives, he and his fellow Republicans Senators don’t think they need to pass Rupp financing — which implies that Stivers believes the cops and the fire department and the poor are less important than a basketball arena.
  • He says people haven’t given him information on how it will be funded, apparently forgetting he’s already blamed his opposition on the fact that he only got the documents two weeks ago.
  • Then he blames the Mayor for not giving them a funding package at all… because whatever Stivers got two weeks ago and was unable to comprehend after two weeks doesn’t count and neither does the fact that he had two weeks to clarify his problems but apparently failed to do so.
  • Then Stivers blames the House for getting the bill to him five days ago… at which point you have to wonder about Bob’s reading comprehension abilities… has he been sitting in his office for the last five days slowing dragging his finger across the page and trying to mouth out the words? Was no one in his office available to help? Did he graduate from the University of North Carolina?

Finally, Matt Jones asks Stivers if the Rupp financing doesn’t happen, will he accept the responsibility for that. Stivers again claims he never recieved the documents he already claimed he did receive but was unable to read them in time in part, it seems, because he never received them.

After that, Stivers bombs a question about who he’s supporting in Friday night’s UK/UofL basketball game. But at least he didn’t say he’s rooting for Duke.

 

One of the sticking points for Senate Republicans is the hotel tax plan. It’s the same basic plan as the one in Louisville, except that it’s already in place in Louisville, and state Republicans are worried that if they approve the money for Rupp they’ll hurt their chances of retaking the House because they voted for a “tax increase”. So Stivers and his Republicans in the Senate appear to be gambling that a vote against the University of Kentucky Wildcats and the will of the Big Blue Nation is the safer bet.

#McConnelling: Duke Blue Devils Fight Song & Mitch McConnell

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March 25, 2014
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Die-hard Louisville Cardinals fan & UK Wildcat snubber Mitch McConnell posted a new campaign video this morning. As our founding father Joe Sonka immediately noted, the McConnell campaign used footage of the 2010 Duke Blue Devils celebrating a championship rather than the 2012 Kentucky Wildcats. Theories for the FUBAR vary:

1) No one on his campaign is from Kentucky and they don’t give two dookies about Kentucky.

2) Someone on his campaign did it on purpose just to wojo Mitch.

3) Mitch McConnell is a Louisville Cardinals fan and it was his way of yet again snubbing the obviously superior program and team, a/k/a, the Kentucky Wildcats.

Whatever happened, it seemed time for Mitch and Duke to let their freak flag fly:

***Earlier***
If you missed this video like Mitch McConnell missed the UK Wildcats trip to the White House, here it is again: Mitch McConnell — Louisville Cardinals fan, UK Snubber, Tom Jurich lover, and YUM! Center boondoggle defender:

Go Cards! Go Mitch McConnell! #McConnelL1C4 #McConnelling #KYSen #YieldTheFloor [UPDATE: Mitch is also a Duke fan]

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March 25, 2014
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Talkin’ about Kentucky ba-ba-ba-basketball…

This video pretty much speaks for itself.

The only thing worth adding is that it’s humorous Mitch McConnell has spent so much time lauding Louisville’s Athletics Director Tom Jurich (who’s retained and rehired Coach Pitino and Coach Petrino, respectively) despite Mitch’s own moral highground rule that people be barred from accepting scholarships to the University of Louisville if they’ve had children out of wedlock. [LINK]

Go Cayts! #BBN On, on, U of K! On, on, Blue and White!

***UPDATE***
Mitch McConnell’s got a new campaign ad celebrating Mitch McConnell and the ad features the Louisville Cardinals winning the national championship and also… Duke University winning the national championship. No UK to be seen — see the 1:09 mark:

What’s C.L.O. Got to Do With It? Wall Street Eating Andy Barr for Lunch

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March 24, 2014
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Round about Noon today, Andy Barr will be in New York City collecting some end of quarter cash from his good friends on Wall Street.

If you’re in the neighborhood, you are cordially invited:

As the invite makes very clear to its Wall Street recipients, Garland H. Barr IV is a member of the House Committee on Financial Services.

But that’s not all! They fail to mention, but have likely not overlooked, that Andy’s on that Committee’s Financial Institutions and Consumer Credit Subcommittee as well as its Oversight and Investigations Subcommittee. So if you’re in financial services in an age of increased oversight, investigation and regulation… Garland’s probably a good dude to have on your side.

As we discussed at some length over the weekend, the folks hosting Andy’s Wall Street munchin’ are the partners of the financial law firm Cadwalader, Wickersham & Taft.

Cadwalader made a fortune in the 2000s running deals on bundled mortgage securities. When that market collapsed in 2008, Cadwalader got burned.

They’re on the mend now thanks to at least $23 Million in TARP contracts. Yes, that’s right… they spent nearly a decade running up the score on debt bundling banks, brokers and lenders as the mortgage bubble ballooned… and then they helped the Treasury Department bail out the billion dollar institutions that created the bubble.

Good work if you can get it.

Their interest in Andy Barr is likely related to Andy’s push just a few weeks ago to exempt something called the “C.L.O.” from the Wall Street Reform and Consumer Protection Act’s Volcker rule.

What’s a C.L.O.?

It’s a Collateralized Loan Obligation, not dissimilar to the Collateralized Debt Obligations that made headlines when Wall Street lenders (and their defenders) brought down the nation’s fiscal house in 2008.

In fact, 70% of the C.L.O. market is controlled by the Too Big To Fail trio of JP Morgan Chase, Citigroup, and Wells Fargo.

Cadwalader, Wickersham & Taft has argued for an exemption of CLOs from the Volcker Rule’s oversight (basically the Volcker Rule would force banks to stop making obviously risky trades that have little to do with serving their primary customers… and the banking industry really doesn’t like this Rule).

Cadwalader, Wickersham & Taft has represented JP Morgan Chase and Citigroup (and AIG, for what that’s worth) in the past — specifically, around the time of the collapse and their contracts to help administer the TARP bailouts.

The fundraising first quarter reporting deadline approaches and Andy Barr’s lunch with Wall Street should add a nice chunk of change to his warchest.

Andy heading outside Kentucky to collect big checks from the financial services industry is nothing new. He’s been a Wall Street favorite since he got to Congress and spent last Summer cozying up to the re-deregulating financial wizards of Texas.

In the end, either Cadwalader and its Wall Street friends are writing checks because they’re in debt to Andy Barr for his CLO help, or Andy Barr will end up in debt to his Wall Street benefactors.

The one thing that is certain: Someone will be in a whole, whole, whole lot of debt.

If you can’t make the Manhattan fundraiser, that’s understandable. (You’re probably in Kentucky… thinking about Kentucky things). But the next time you see Garland H. Barr IV and he’s giving a speech about how hard he’s fighting to protect the Wall Street bankers and the debt bundling profiteers with his efforts to defend the C.L.O. you will know exactly what he’s talking about.

[Previously: Andy Barr’s Collateralized Loan Obligation Wall Street Fundraiser]

 

Andy Barr’s Collateralized Loan Obligation Wall Street Fundraiser

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March 22, 2014
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In February 2007, one of the nation’s oldest law firms — Cadwalader, Wickersham & Taft — reported over half a billion dollars in revenue for the previous year and an industry leading profits per partner of $2.9 Million.

The firm’s chairman, Robert O. Link, was bullish on the future: “Are we going to have difficulty sustaining this? No, short of some cataclysmic event that hits everyone else too.”

As the New York Law Journal reported at the time:

The engine of the firm is its asset-backed structured finance practice. Link made his name in the area and still serves as the firm’s practice leader. It is a specialized area that, in its most basic form, involves the issuance of tradeable securities tied to fixed assets or revenue streams, most commonly residential mortgages.

It is not generally regarded as a premium practice area like [mergers & acquisitions] or high-yield bond offerings, and some have questioned how Cadwalader could have achieved such impressive results from that foundation…. The head of another New York law firm described securitization as a high-volume “commodity” practice, an area top firms avoided because of their inability to command premium rates in it.

“Somehow they’ve managed to make a success of it,” he said of Cadwalader.

On Monday, March 24th, 2014, Kentucky’s 6th District Congressman, Garland H. Barr IV, will be in New York City for a Wall Street fundraiser hosted by Cadwalader’s partners.

You are cordially invited:

Not long after Link’s interview, that cataclysmic event did in fact hit Cadwalader, though not quite as hard as it hit everyone else.

The cost of the economic collapse spiraled into the trillions. Millions of average Americans lost their retirement money and their homes. At Cadwalader, Wickersham & Taft over 200 Wall Street lawyers were forced from the firm. [link, link]

While most Americans struggled to understand what had happened, the lawyers at Cadwalader had a pretty good handle on it. The mortgage backed securities industry had led the nation into financial ruin. When the Troubled Asset Relief Program (TARP) was passed in the waning days of the Bush administration, the Treasury Department contracted Cadwalader, Wickersham & Taft to provide legal services in the administration of the bailouts.

At the time of its TARP work, Cadwalader’s current and recent clients included such major TARP recipients and beneficiaries as Bank of America, Citigroup and AIG. [link]

In a 2008 BusinessWeek story about Treasury’s choice of double-dipping firms — ones that played both a role in the financial collapse and in the plans to administer the TARP bailouts — a Cadwalader lawyer puts it simply: “What’s the cost of hiring people who are less competent to do the job?”

So far, Cadwalader has earned somewhere between $23 million and $27 million for its TARP work. They’ve got contracts running thru August 2015. [link]

When the Congressional Oversight Panel requested testimony from Cadwalader in 2010 on its TARP work, Cadwalader and Treasury declined the request and Treasury ultimately blocked public testimony, citing attorney client privilege. [link, link, link, link]

But what about Garland H. Barr IV, the 6th District Congressman from the great state of Kentucky?

Why are Cadwalader’s partners holding a fundraiser for Andy Barr in their Wall Street headquarters?

Part of the reason is clearly indicated on the invitation. Let’s look at it again:

As you see, Andy Barr is a member of the House Committee on Financial Services.

Perhaps even more important, Andy’s on the Financial Institutions and Consumer Credit Subcommittee. And Garland “Andy” Barr also sits on the Oversight and Investigations Subcommittee. [link, link]

Aside from its continued interest in collecting TARP funds, Cadwalader, Wickersham & Taft has an interest in the efforts to regulate and reform Wall Street.

For example, Cadwalader is opposed to the SEC’s current examination of the repo agreement market, a $4.5 Trillion web of deals that could, in an economic panic, unravel. As Bloomberg reported this past week:

U.S. regulators concerned that banks and brokerage firms remain too dependent on risky types of short-term funding are weighing new rules designed to reduce reliance on parts of what is often called the shadow banking system.

Cadwalader’s current co-chairman told Bloomberg the risk of default is “exponentially less” than in the housing market — which would be more reassuring had they foreseen the risk in the Housing market… but they didn’t.

Cadwalader appears to have a larger interest in overriding and undoing the Wall Street Reform and Consumer Protection Act. That law includes protections for consumers and at least a groundwork for protections against a recurrence of the kind of reckless trading that created the “Great Recession.”

In particular, Cadwalader — and Wall Street at large — is fighting against the Volcker Rule, a part of the Wall Street Reform and Consumer Protection Act which prohibits banks from engaging in certain kinds of speculative investments.

A month ago, Andy Barr began pushing HR 4167 through the House and through his own Financial Services Committee. The bill would, as Cadwalader’s website puts it, “amend the Volcker Rule to exclude certain collateralized loan obligations (“CLOs”) from the prohibition against a ‘banking entity’ (essentially a bank or any affiliate of a bank) acquiring or retaining an ownership interest in a hedge fund or private equity fund.”

The Big Banks and their Wall Street allies claim that the Volcker Rule’s effect on CLOs would crush their industry. Writing in the New York Times earlier in March, ProPublica’s Jesse Eisinger explored this debate and found that claim suspect.

[C.L.O.] stands for collateralized loan obligations, which are bundles of loans, usually made to junk-rated companies. They use the same techniques as collateralized debt obligations, which were often made up of subprime mortgage investments and were the rotten core of the financial crisis. C.L.O.s caused billions in losses for banks during the market panic of 2008, but most recovered strongly and memories faded. Junk-rated companies rallied, and C.L.O.s roared back.

The banking industry and its supporters like to talk about the CLOs strictly in terms of small community banks. Yet, as Eisinger’s notes, 71% of the CLO market is controlled by three “too big to fail” institutions — JP Morgan Chase, Citigroup and Wells Fargo.

When Barr’s bill on CLOs went for a hearing in front of the House Financial Services Committee, one professor explained its cons and four industry leaders argued for the CLO exemption — including a leading partner at Cadwalader, Wickersham & Taft, who testified on behalf of and representing the Structured Finance Industry Group.

The Structured Finance Industry Group was established just last year to educate “members, legislators, regulators, and other constituencies about structured finance, securitization and related capital markets” and so forth. Its members and its Board are, well, basically the Too Big To Fails and the rest of Wall Street. (Cadwalader has joined Republicans since the earliest implementation’s of Dodd-Frank in arguing for delays, rollbacks and repeals of the consumer and financial protections law.)

Whether Monday’s fundraiser at Cadwalader is a chance for the firm, its partners and its friends to say “Thank you” for Barr’s support or to just fill him up on money so he can do it again next time, what is clear is that Barr’s desire to leave Kentucky and fill up on Too Big To Fail Wall Street Money is nothing new.

As the New York Times reported last August:

Representative Andy Barr, a Republican from Kentucky with little experience in the intricacies of Wall Street, was among the lucky House freshmen to secure a seat on the powerful Financial Services Committee.

….Mr. Barr, 40, a first-time elected official, has raised nearly as much money this year from political action committees run by major banks, credit unions and insurance companies as longtime lawmakers like Speaker John A. Boehner and other party leaders.

The flood of financial industry cash — $150,000 in political action committee donations to Mr. Barr in just six months — is hardly an accident.

And as the Herald Leader added:

It remains to be seen how much influence Barr can bring to bear on his colleagues, but so far it seems he’s worked fairly hard to prove his worth.

He has pledged to help protect a $500 million tax break for credit unions. Barr also has introduced a bill to remove a federal regulation to prevent banks from making mortgage loans to people who cannot afford to repay them.

Barr invokes the all-purpose mantle of government over-regulation stifling business to criticize rules aimed at preventing the type of mortgage boom and bust that almost brought down our economy in 2008 and 2009.

And as discussed here at B&P back in February, Andy Barr’s ties to the financial services go well beyond the private firms and Too Big To Fail Banks on Wall Street. His trip last summer to Texas with five other members of the House Financial Services Committee under the apparent wing of the Committee’s Chairman, Jeb Hensarling, raked in cash from a host of payday lenders, mortgage bundlers and other more remote financial actors who would all like to see a less regulated, more shadowy financial industry — that is, one that looks more like the Wall Street that nearly destroyed America six years ago.

Hensarling is an acolyte of Phil Gramm, the Texas Senator whose 1999 law created the Bank/Investment Firm nexus that lead to financial ruin. Now head of the Financial Services Committee, Hensarling’s pushing for re-deregulation, and Barr appears to be right at his side.

The fundraiser at Cadwalader, Wickersham & Taft on Monday will no doubt be lucrative for Garland. But perhaps the better question is: How lucrative will it ultimately be for Cadwalader, Wickersham & Taft?

 

Do Ya Want My Love by Electric Light Orchestra on Grooveshark

***

It’s perhaps also worth noting that in January, Cadwalader announced their next chairman — James C. Woolery. He joined the firm in 2013 and will assume the helm in 2015:

[Woolery] moved to help Cadwalader continue rebuilding itself after the financial crisis, when the firm’s lucrative business of advising on complex debt offerings dried up. The collapse of the market for mortgage securitizations, in particular, led to a big wave of layoffs.

Woolery’s a graduate of the University of Kentucky Law School (’92) and a distant cousin of noted conservative economist and game show host Chuck Woolery.

WWABD?

4 comments
March 4, 2014
By

Steve Beshear’s decision to appeal the court’s ruling that Kentucky must recognize gay marriages is sad but not surprising. Outside one single issue, Beshear has shown himself again and again to be a weak Democrat and a weak leader.

Maybe he’s planning a run for Senate in 2016. Maybe he’s just as useless on equal rights as he is on the environment. Maybe he’s just a useless homophobe and we should treat him like the dinosaur he is and retire him to his Ark Park.

But what I’m curious about in this story is this: What Would Andy Beshear Do?

Steve’s son, who’s known to start food fights in food pantries, is running for Jack Conway’s job… Attorney General of Kentucky.

Perhaps Steve’s decision to appeal is actually an attempt to protect his son, to swaddle Andy in a warm blanket of “not in my control” and pamper him with the soft coos of “I’ll wait to see what the court decides.”

If Kentucky appeals and the matter is settled one way or another, Andy Beshear is handed yet another political silver spoon and never has to pick a side.

But why shouldn’t he pick a side? He’s running for Attorney General.

Either Andy Beshear agrees with his father — who is quite clearly wrong — or he agrees with Jack Conway.

Conway chose, rightly, not to challenge the judicial ruling:

“Judge Heyburn’s decision does not tell a minister or a congregation what they must do, but in government, ‘equal justice under law’ is a different matter,” Conway said. “For those who disagree, I can only say that I am doing what I think is right. In the final analysis, I had to make a decision that I could be proud of — for me now, and my daughters’ judgement in the future.”

Conway made his decision, in part, with an eye toward how his children would look at him. Maybe Steve Beshear made his decision for the exact same reason.

So someone tell us… what would Andy Beshear do?

What kind of Attorney General would he be? Which side is he on? Does he agree with Conway, or his homophobic father?

And ‘letting the courts decide’ isn’t an answer.

 

Watch Jack Conway’s powerful statement on why appealing Judge Heyburn’s decision is wrong, and contemplate why Steve Beshear thinks discrimination is right:

 

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