Sen. Byron Dorgan (Dem.-N.D.) got some good press from Huffington Post a couple of days ago; turns out back in 1999 Dorgan was one of the only senators to vote against repeal of the Glass-Steagall Act (the Depression-era law that established a firewall between commercial banks, investment banks, and insurance companies):
The footage of him speaking on the Senate floor has become something of a cult flick for the particularly wonky progressive. The date was November 4, 1999. Senator Byron Dorgan, in a patterned red tie, sharp dark suit and hair with slightly more color than it has today, was captured only by the cameras of CSPAN2.
“I want to sound a warning call today about this legislation,” he declared, swaying ever so slightly right, then left, occasionally punching the air in front of him with a slightly closed fist. “I think this legislation is just fundamentally terrible.”
The legislation was the repeal of the Glass-Steagall Act (alternatively known as Gramm Leach Bliley), which allowed banks to merge with insurance companies and investment houses. And Dorgan was, at the time, on a proverbial island with his concerns. Only eight senators would vote against the measure — lionized by its proponents, including senior staff in the Clinton administration and many now staffing President Obama, as the most important breakthrough in the worlds of finance and politics in decades.
“It was more like a tidal wave in 1999,” the North Dakota Democrat recalled of that vote in an interview with the Huffington Post. “You’ve seen the roll call. We didn’t really have to deal with push back because they had such a strong, strong body of support for what they call modernization that the vote was never in doubt… The title of the bill was ‘The Financial Modernization Act.’ And so if you don’t want to modernize, I guess you’re considered hopelessly old fashioned.”
Other senators to vote against the repeal: Barbara Boxer, Barbara Mikulski, Richard Shelby, Tom Harkin, Richard Bryan, Russ Feingold, and the late Paul Wellstone. HuffPo also cites a few other people who got it right, including Edward Kane, a finance professor at Boston College, Jeffrey Garten, a Clinton Commerce undersecretary, and Ralph Nader. (No mention of D&S, which opposed the repeal consistently (e.g. here, where Jim Campen said “dominant effect is likely to be a further concentration of economic and political power, and the use of this power to benefit the new financial giants at the expense of the rest of us.”). Read the full HuffPo article here.
It seems Sen. Dorgan is an inconsistent watchdog, however. Firedoglake recently reported that Dorgan voted against the “cramdown” legislation that would have allowed bankruptcy judges to write down the value of first mortgages (we reported on this here and here). Turns out Dorgan’s wife lobbied against the cramdown legislation on behalf of the American Council of Life Insurers:
One of the key votes against “cramdown” in the Senate came, surprisingly, from Byron Dorgan of North Dakota. According to an FEC lobbying report filed by the American Council of Life Insurers, Dorgan’s wife Kimberly worked for them as a lobbyist to defeat the measure during the first quarter of 2009 (PDF).
The Amercan Council of Life Insurers (ACLI) represents 373 insurance companies. Headed by former Oklahoma governor Frank Keating, they account for 93 percent of the U.S. life insurance industry’s total assets.
In testimony before the Senate Committee on Banking, Housing and Urban Affairs on March 17, 2009, Keating expressed opposition to letting bankruptcy judges write-down the principle of first mortgages to current values because it “could potentially trigger significant downgrades to life insurers’ Triple-A rated residential mortgage-backed investments.” (PDF)
It is estimated that 8 million homeowners will be foreclosed upon in the next four years. According to a study by Credit Suisse, the bill would have reduced foreclosures by 20% with no cost to taxpayers. The Center for Responsible Lending (PDF) says that foreclosures on subprime loans through the end fo 2009 will result in a decline in property value for homes in the surrounding areas of $352 billion, or an average of $8,667 per home.
The American Council of Life Insurers PAC also made $119,300 in campaign donations during the first quarter of 2009, including $1000 to Max Baucus, who voted against the measure. They also contributed to Blue Dog and New Democat Coalition PACs.
The Honest Leadership and Open Government Act of 2007 requires that lobbying disclose “whether they held what is referred to as an ‘official covered position’ – such as a congressional seat or staff level job or an executive level position in the executive branch – at any point in the last 20 years.” The 1Q 2009 lobbying report filed by the ACLI does not disclose any of these relationships.
Read the full article.