Critic Corner Archive

MARCH 21, 2009

Eliot Spitzer wrote in the Washington Post:

Predatory Lenders' Partner in Crime.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably.

The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

On March 19, 2009, the RollingStone magazine published an article, entitled, The Big Takeover wherein the author, MATT TAIBBI, says that,

The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution! The Big Takeover

At the end of the author's article, at page 8, he further says:

The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of.

When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.

But wait a minute, you say to them.

No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting whats left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?

But before you even finish saying that, they are rolling their eyes, because You Dont Get It.

These people (Bankers and lawyers) were never about anything except turning money into money, in order to get more money;valueswise they're on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.

In 2003, Former NY Attorney General Eliott Spitzer exposed the mutual fund scandal, when he arrested a CIBC executive PAUL FLYNN for stealing more than $1 million.

New York State Attorney General Eliot Spitzer had said that he had a memo from PAUL FLYNN which described to others at the bank HOW TO BREAK THE LAW AND ENGAGE IN THE ILLEGAL TRADING!

Spitzer later dropped all charges agaisnt PAUL FLYNN, a Canadian, who worked in CIBC's New York office and was evidently the scapegoat for attorneys at CIBC, who ostensibly have instructed some of CIBC's employees on how to break the laws to defraud their clients. Only lawyers in the CIBC legal department have knowledge of the law and basically on how to break the law.

On July 25, 2005 CIBC confirmed it would pay US $125 million to settle the investigation into its role in the Mutual fund scam.

This was the first case in what would become one of the largest scandals in the history of Wall Street and while attorneys behind the scene continue to enjoy immunity from Attorney Generals in the USA and in Canada, the financial crises, witnessed all over the world, could not have occured without lawyers driving the bus.

Having said that, there was evidently more than one person wanting to eliminate Eliott Spitzer and it is not a stretch to say that others like CIBC NY attorney had motive to send the prostitute to the former Attorney General when he was Governor. NY Attorney General Elliott Spitzer Exposed CIBC After Hour Trading

Global Research, March 17, 2008

Title: Why the Bush Administration Watergated Elliot Spitzer

Author: F. William Engdahl

Student Researchers: Rob Hunter, Elizabeth Rathbun, and Rebecca Newsome

Faculty Evaluator: Mickey S. Huff, MA Eliot Spitzer

The exposure of New York State Governor Eliot Spitzers tryst with a luxury call girl had little to do with the Bush administrations high moral standards for public servants.

Author F. William Engdahl advises that, in evaluating spectacular scandals around prominent public figures, it is important to ask what and who might want to eliminate that person.

Timing suggests that Spitzer was likely a target of a White House and Wall Street operation to silence one of its most dangerous and vocal critics of their handling of the current financial market crisis.

Spitzer had become increasingly public in blaming the Bush administration for the subprime crisis.

He testified in mid-February before the US House of Representatives Financial Services subcommittee and later that day, in a national CNBC interview, laid blame squarely on the administration for creating an environment ripe for predatory lenders.

On February 14, the Washington Post published an editorial by Spitzer titled, Predatory Lenders Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers, which charged, Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

In this editorial, Spitzer explained:

The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC).

The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks.

For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative.

The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks.

The federal governments actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks.

In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

The editorial appeared the day after Spitzers ill-fated rendezvous with the prostitute at the Mayflower Hotel. With that article, some Washington insiders believe, Spitzer signed his own political death warrant.

On March 4, 2008, Spitzer furthermore proposed legislation that would have imposed penalties for mortgage fraud and predatory lending.

Curiously, Spitzer, who had been elected governor in 2006, defeating a Republican by winning nearly 70 percent of the vote, has been not charged with any crime.

His case went into the hands of Washington and not those of New York State authorities, underscoring the clear political nature of Spitzers offense.

New York Assembly Republicans immediately announced plans to impeach Spitzer or put him on public trial if he were to refuse resignation.

Although prostitution is illegal in most US states, clients of prostitutes are almost never charged, nor are their names typically released while a case is in process.

Spitzers editorial concluded,

When history tells the story of the sub-prime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably . . . it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits.

The administration was so willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

Citation

1. Governor Spitzer Proposes Legislation to Address Sub-prime Mortgage Crisis, New York State website, March 4, 2008.

Predatory Lenders' Partner in Crime

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THE FOLLOWING ARTICLE IS ANOTHER GOOD EXAMPLE AS TO WHY THE CANADIAN JUDICIARY HAS BEEN RATED AS LOW AS 30% BY GLOBAL INTEGRITY: Global Integrity Canada Report 2008

Judicial Conflict of Interest Acceptable in Canada by Government

Vancouver Condo Sold to Developer Against Owner's Will

Leaky Building Liquidated by Court After Long Fight Over Expensive Repairs

Tuesday, February 24, 2009

By Kathy Tomlinson, CBC News

Another Example of Judicial Racketeering

A long and expensive court fight over condominium repairs has ended with a Vancouver man being forced out of his paid-off home.

A B.C. Supreme Court justice ruled Craig Fraser's condo could be liquidated, along with the rest of the three unit building, after the two other owner investors couldn't or wouldn't pay the repair bills for a leaky roof.

"It came down to two [owners] against one," Fraser said. "So, now I'm faced with a tough economy, being self-employed and having to move and rent and start over."

An investor was allowed to purchase the entire building at 1029 West 7th Avenue for the land value, approximately $1 million, following a July 23, 2008 court decision by Justice Victor Curtis. By contrast, the court estimated the building would have been worth about $2 million fully repaired.

"It's appalling," Fraser said. "I am just absolutely appalled."

Fraser has the biggest unit in the building, which the court said would have been worth an estimated $800,000 after repairs. Instead, the self-employed single father with a three-year-old daughter said he will get a cheque from the sale for approximately $350,000. He has to be out by March 12.

'I will probably never recover'

"I will probably never recover financially, I mean I am 48 years old. It's devastating and it shouldn't happen to anybody," Fraser said.

"Judges aren't, unfortunately, accountable [for their judgments] to anybody.

"I wish the table was turned and I could say to the judge that I have the power to force you out of your house and see how it affects you and your family."

The battle began after Fraser hired an engineer in 2005 to assess his unit for renovations. The engineer found the building needed major roof and other repairs, and the City of Vancouver stepped in and declared it unsafe.

That triggered the long and expensive court exchange among the three owners over proposed repairs estimated to cost $650,325.

Mary Buchanan, a realtor who lives in California, and Maurice Duteau, a mechanical engineer who lives in China, ultimately said they couldn't cover their share of the cost, while Fraser said he would.

"They just decided that they didn't want to repair it, and managed to convince the courts," Fraser said.

As foreign investors, Fraser pointed out, the other two owners are able to write off losses against their taxes, while he has simply lost his primary residence.

In his reasons for judgment, Curtis wrote: "Ms. Buchanan and Mr. Duteau have advised, they do not have the financial resources to fund the repair costs. I have no reason to disbelieve them on that issue. The result is, if the repairs are ordered, they will default on their levies."

"It is unlikely a purchaser would want to buy into the existing situation. In my opinion, the only way to realize a reasonable value, is to place the property for sale free of existing disputes and governance problems," Curtis concluded.

Legal fees hit $100,000

Fraser said he spent $100,000 on legal fees, as well as $112,000 for engineer, architect and permit fees while preparing for repairs that were never undertaken. He's also on the hook for his share of $50,000 in fees for the administrator appointed when the strata became dysfunctional.

Fraser said is not confident he can recoup any of his costs from the other owners. After all is said and done, he estimates he will have lost $500,000 in home equity and the cost of the fight.

"That's it and I had a house paid for," Fraser said. "Nothing has worked out in my favour. It's just been horrific bills and gone nowhere."

When contacted in California, Buchanan refused to speak with CBC News about the case. Duteau wrote back from China that Fraser had caused his own difficulties by trying to get the others to pay more than their fair share for repairs.

"Craig Fraser brought the situation on himself by trying to get his condo updated at Ms. Buchanan's and my expense," Duteau wrote.

He said one of the reasons for the deadlock in this case was the B.C. rule, under the Strata Property Act, that requires approval by three quarters of strata members before repairs can go ahead. Without unanimous agreement on what those repairs should cost, he said, an approval vote was impossible for the three members.

"You found a good example of how things can go wrong under the current system," Duteau said. "This is the last strata property I will ever have anything to do with."

Condo group predicts more liquidations

"It's not the only liquidation that we've seen take place," said Tony Gioventu of B.C.'s Condo Home Owner's Association (CHOA). "We're going to see probably a greater list of strata corporations that are incapable of meeting their financial obligations."

Gioventu said he's aware of two other recent court-ordered liquidations. He expects several more, in leaky condos where repairs have been deferred for years while owners are embroiled in disputes over money, particularly given the current market downturn.

"We will be dealing with developments of several hundred units each that are incapable of doing the repairs, have no money, the debt loads are excessive, the buildings can't be occupied because of structural failures," Gioventu predicted.

"We're facing some much greater problems. And a lot of it is attributable to deferment of obligations."

Gioventu cited a 300-unit complex at Nanaimo and Broadway in Vancouver where the owners can't afford or agree on repairs. He believes the estimated cost of repairs has soared by 1,000 per cent while the fight has raged on.

He said CHOA has been lobbying B.C.'s current government for years to amend the Strata Property Act. It wants it mandatory for stratas to have an adequate reserve fund to cover all future repairs.

"If they had enough money in their [strata] bank accounts we wouldn't be dealing with the type of disputes we are dealing with," said Gioventu, who pointed out that would also mean higher strata fees for B.C. condo owners.

CHOA also wants a streamlined dispute resolution system, so owners who can't agree don't spend their life savings fighting each other.

"It's long overdue for legislation," he added. "There is a desperate need to upgrade dispute resolution for strata corporations in the province."

B.C. government may change the law

B.C. Finance Minister Colin Hansen, who is responsible for the strata law, said his officials are consulting with condo owners on changes, but he didn't say when those changes might come.

"Not all of the strata property groups have decided to become part of our consultation process, which is unfortunate," Hansen said. "But the welcome mat was certainly put out.

"Were certainly looking at ways of how we can provide more flexibility more options and less expensive options for dispute resolutions among strata property owners."

Fraser had some suggested changes of his own.

"The law should be, if people want to get out, for whatever it takes to get them out, they can sell. But don't force people that want to stay in their own homes out. That's what the law should read. The way it is now, it's majority rules."

Fraser suggested all B.C. condo owners should take a close look at whether their strata can handle future repairs.

"I think we are all going to have serious trouble when time ticks on and buildings aren't maintained."

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