10.22.2010 0

Schumer channels Wall Street cash to troubled Democrats

The Hill newspaper reported October 20th that New York Senator Charles Schumer went on a spending spree trying to help his Democratic Senate colleagues keep their seats to the tune of over $2 million. Additionally, Schumer gave $250,000 he collected from others to Senate Majority Leader Harry Reid, and cut five figure checks to various state Democratic Party organizations around the country.

The real question is who gave Schumer the money to spread around the country.

OpenSecrets.com reveals that the number one industry donating to Schumer is: the financial services industry — also known as Wall Street. That’s right — Wall Street, the exact people that the Senate Democrats have spent the past two years vilifying. Now, their money is coming to the Democrats’ rescue like the cavalry in an old western.

Even more incredible is that Schumer got the most cash from Paulson & Company. If that name seems familiar, it is because John Paulson is the same guy whose mortgage packaging bond deal ended up getting Goldman Sachs indicted by the Securities and Exchange Commission. The indictment was used by Senate Democrats as the launch point for their legislation that effectively took over the financial services industry.

Remember that Paulson & Company made $15 billion betting that a package of mortgage backed securities that they put together would fail. Essentially, Paulson bet against the housing market, and that people would default on their mortgages, and the banks (subsequently the taxpayers) would be stuck with the bill.

The sanctimonious Senate Democrats have spent the past two years railing against these very financial institutions, yet now, in desperation, they are essentially taking a pass through from those same companies via Senator Charles Schumer’s helpful campaign committee.

If the Democratic Senatorial Committee has a shred of integrity, they will return Schumer’s $2 million. Of course, this is unlikely as Schumer is the immediate past chairman of the organization.

The current chairman is Senator Robert Menendez from New Jersey. According to OpenSecrets.com Wall Street is only the fourth highest contributor to Bob’s campaign with more than $600,000 spent, and his second largest corporate donor is Goldman Sachs with over $95,000 contributed since 2005. Not much chance a wave of ethics is likely to sweep DSCC any time before November 2nd.

Now, personally, I have nothing against taking money from investment bankers. What I object to is the obnoxious author (Schumer) of the supposed finance reform measure called the DISCLOSE Act, using his campaign committee effectively as a pass through for money that the candidates who would be beneficiaries would view as tainted.

I object to using money given to one candidate to support candidates that might be antithetical to the interests of the donors.

I object to a donor doubling their impact by giving the maximum contribution to two different Senators, and then having the money from the first Senator passed along to the one who is in political trouble.

Obviously, Schumer has comingled his Wall Street take. He hasn’t kept a separate Paulson & Company campaign account. He will obviously and rightfully claim that he is following the law. However, the blatant hypocrisy of the Senate Democrats, who are benefitting from taking millions from someone whose top donor engaged in behavior so egregious that the SEC came down on his corporate partner and coerced a $550 million settlement from them, is too much even for the most cynical political observer to not note.

Let me be clear about one thing, the SEC did not indict Paulson & Company, so their actions were perfectly within the law. However, these very Senate Democrats dragged this controversial hedge fund company through the mud. I’m sure John Paulson is pleased as can be that his company’s campaign cash is being used to prop up the very scoundrels who tried to wreck his business.

So, when you see a Democratic Senatorial Committee ad in Washington state for Patty Murray, remember that it was likely unwittingly paid for by the very Wall Street interests that she has attacked. Of course, Murray has taken tens of thousands from these same interests and sees no correlation between her taking the money and her election year attacks on the very industry that has helped fund her campaign.

Such is the way of politics in 2010, and folks in D.C. wonder why voters are angry.

Rick Manning is the Director of Communications for Americans for Limited Government.

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