Kilroy's K Street Love

The most predictable act of the OH-15 congressional race has taken place: incumbent Congresswoman Mary Jo Kilroy has attacked Lt. Colonel Steve Stivers with a negative TV ad. With her past history of running negative campaigns, the fact that she aired a negative ad isn't itself worth discussing, but the hypocrisy of the message contained in the ad is well worth highlighting.

The ad decries the number of lobbyists in Washington, D.C., but fails to mention that under the Obama Administration and the Pelosi Congress lobbyists are thriving like never before. The Weekly Standard calls the current Democrat-created environment in Washington a "golden age" for lobbyists. And they're correct in doing so: 2009 set a record as the most profitable year ever for the lobbying industry with a walloping $3.47 billion dollars being spent on lobbying the federal government. And they couldn't have done it without Mary Jo Kilroy and her liberal ilk in Congress.

"Lobbyists love it ... when you've got an activist agenda like this," said James Thurber, the director of American University's Center for Congressional and Presidential Studies, of the Obama-Pelosi agenda. And the lobbyists who are thriving aren't Republicans either--they're Democrats. The much-decried "army of lobbyists" President Obama and Congresswoman Kilroy carp about include many faces friendly and familiar to them: former Obama administration officials, prominent Democratic donors, former lawmakers, and former staff members of the current Congressional Democrats. People like Obama's failed Secretary of Health and Human Services nominee and tax-dodger Tom Daschle; Obama transition team co-chair John Podesta's BP lobbyist brother Tony and sister-in-law Heather; Goldman Sachs's Michael Paese, formerly an aide to House Financial Services Committee Chairman Barney Frank (as in Dodd-Frank Wall Street Reform and Consumer Protection Act).

Kilroy's Army

What's worse is that the anti-lobbyist rhetoric of Kilroy and Obama is pushing lobbying into a black market. The Huffington Post brands the new trend "influence laundering". To get around the scorn and disclosure requirements of being publicly known as a lobbyist many Washington influence peddlers are deregistering themselves. Effectively, this sends much of the lobbying industry underground to a world free of transparency and accountability for both lobbyists and Kilroy lawmakers alike. (Remember when Congresswoman Kilroy inserted a provision into the financial reform bill that sent bond deals underground? --It's like she's got an ax to grind with the very ideas of transparency and accountability.) For his part, President Obama has found his own clever way around the transparency requirements he instated.

In truth the only way to curb the influence of the "army of lobbyists" is to cut the size of government; if the beast starves it will die. President Obama and Congresswoman Kilroy have kept the beast well-fed with Obamacare, the Dodd-Frank "reform" bill, and cap-and-trade. It's time for the lobbyists' "golden age" to end!

Mary Jo Kilroy did get one line right in her attack ad: With big lobbyist enablers like her in Washington, it is no wonder our voices never get heard.

Kilroy Keelhauls Economy with Sweetheart Deal

As Congresswoman Mary Jo Kilroy updates her resume for her post-November job hunt she can add a new achievement: causing economic chaos by bringing a $1.4 trillion market to a grinding, painful halt. As the result of a Kilroy-authored provision of the Dodd-Frank financial overhaul law, the world's three largest bond rating agencies said their credit ratings could no longer be used in documentation for new bond sales. Because many types of bonds are required by law to include credit ratings in their official documentation, the bond market was completely shut down with no asset-backed bonds put on sale this week. 

I'm not sure how many jobs the collapse of a $1.4 trillion market destroys or fails to save, but I'm sure it's a lot. And beyond the killed jobs, the ramifications for consumer credit will be devastating: Ford Motor Co. has already been forced to scuttle a debt deal to finance auto loans.

[For a good discussion of Kilroy's blunder, watch the video here with Ford Motor Company CEO Alan Mulally. It gets relevant around 4:21.]

Think about it: Nobody can get a loan to buy a car because Congresswoman Kilroy just killed the bond market. If nobody can get financing then there aren't going to be many cars rolling off the lot. If nobody is buying cars, there's no need to make cars (or car parts). If there's no need to make cars or car parts, there's no need for workers to be employed at Honda Marysville (Congratulations to them on cranking out their 10 millionth vehicle earlier this week!). Worthington Industries would likely have to make cutbacks too as the demand for automobile steel tanks. So where does that leave us? Car dealers, car manufacturers, steel workers, the drivers who deliver the cars, the workers who make the car parts, and all the support personnel at all the previously mentioned entities left without work. Of course, you can't turn on the TV without seeing a commercial for a car dealership so there are going to be some cutbacks at the TV stations too from the loss of advertising revenues... but I'm sure, by now, you see the pattern: it's all connected. It's not so much a financial overhaul as an economic keelhaul. No bond sales = no consumer financing = no consumption = no jobs. 

And why'd Kilroy do it? To make the financial system more accountable? To right horrific wrongs?

Nope. She did it to excite the erogenous zones of one of her key constituencies: the trial lawyers! This is an election year, and she needs cash.

The Kilroy provision (or Kiljobs provision, if you prefer) renders ratings agencies "expert", and thus, exposes them to a new liability similar to that held by auditors. A major difference, of course, is that auditors are liable for their examination of what is and bond raters are now liable for predictions of what may be. In effect, bond raters now face a level of liability greater than anyone else in all of business: in order to avoid being sued into oblivion bond raters must predict the future accurately every time at bat.

Congresswoman Kilroy knows full well that no one bats a thousand. Just look at her own political party and the "Summer of Recovery".

The impossibility of bond raters getting it right 100% of the time is exactly why Kilroy authored the provision making them legally liable for not having the foresight of Nostradamus: it's food on the table and Benzes in the driveway for her trial lawyer donors.

When they thrive, she thrives.

But we don't:

According to the Wall Street Journal, the Kilroy provision "has done the exact opposite of the bill’s intended efforts at creating more transparency and openness. It is forcing more deals underground, where there will be less access to capital and less opportunity for public scrutiny." Where only people who have the cash and the connections can have access and reap the benefits.

Congresswoman Kilroy has sold us up the river again, pretending to pass Wall Street reform legislation while rewarding her donor base. Let's hold her liable in November.

In an Awkward Turn of Events: Kilroy Exposes Geithner

On Tuesday revelations on the depth of Treasury Secretary Timothy Geithner's complicity in disguising the instability of collapsed investment services titan Lehman Brothers were exposed in a hearing held by the House Financial Services Committee. The hearing had been called for by Congresswoman Mary Jo Kilroy as part of the Ohio Democratic Party's strategy to place blame for Lehman Brothers's collapse on Republican gubernatorial candidate and former Columbus-based Lehman Brothers employee John Kasich. Just as his name was not mentioned in the bankruptcy examiner's report released last month, Mr. Kasich's name was not mentioned in the testimonies delivered before the committee. It would seem that living and working 500 miles away from Lehman Brothers headquarters, Mr. Kasich truly was out of the loop on the questionable accounting practices.

From Congresswoman Kilroy's perspective the hearing may have been a total failure as it neglected to prove once and for all that John Kasich single-handedly--and with malice in his black heart--caused the global financial crisis. However, the hearing provided a great public service by exposing the systemic organizational failures of the Federal Reserve Bank of New York (FRBNY) as it existed under the leadership of then-President Timothy Geithner. For once some good has come out of Mary Jo Kilroy's addiction to the lowest brand of negative, deceptive politics.

In his testimony, William K. Black, a distinguished bank regulator and professor of economics and law, found President Geithner and his FRBNY team "knew that Lehman was engaged in fraud" and that Geithner's failure to take commensurate action constituted "an egregious violation of the public trust." According to Black, "The FRBNY, led by President Geithner, had a clear statutory mission -- promote the safety and soundness of the banking system and compliance with the law -- stood by while Lehman deceived the public through a scheme that FRBNY officials likened to a “three card monte routine.” Black went on, "the regulatory perpetrators [Geithner and his team] must be held accountable."

How awkward for Mary Jo! She was looking to smear John Kasich and she ended up exposing Obama's Treasury Secretary as asleep at the wheel. I sure hope this isn't going to cause a rift that would stop White House Chief of Staff Rahm Emanuel from channeling more of his dirty housing market collapse money to her!

Not what she had planned

(Photo available at http://www.c-spanvideo.org/marykilroy#)

Anton Valukas, the Lehman Brothers bankruptcy examiner, describes in his report how the FRBNY administered three consecutively less rigorous stress tests to evaluate Lehman's ability to withstand a run or a potential run on the bank. After Lehman failed all three tests, the FRBNY allowed Lehman to design its own fourth stress test which the firm then passed. Valukas concluded, "It does not appear that any agency required any action of Lehman in response to the results of the stress testing."

So, apparently, now-Treasury Secretary of the United States Timothy Geithner's mantra is "If at first you don't succeed, keep lowering the bar until you do."

How confidence inspiring.

I'll bet Mary Jo Kilroy, Nancy Pelosi, and the rest of the congressional chupacabra crew wish the American people would adopt that mantra too--it's the only way their job-killing, deficit-deepening policies could ever get a passing grade.

Mary Jo & the Politically Motivated Hearing

Congresswoman Mary Jo Kilroy may have just bumbled her way into exposing further evidence of the incompetence of Obama Administration Treasury Secretary Timothy Geithner. House Financial Services Committee Chairman Barney Frank (D-Mass.) has granted Congresswoman Kilroy’s request for a hearing into the already-investigated collapse of the former Wall Street banking company Lehman Brothers. Ms. Kilroy’s call for a hearing appears to be politically motivated by a desire to create a forum for attacking Ohio gubernatorial candidate and former Congressman John Kasich, a former employee of Lehman Brothers. Recent polls show Mr. Kasich on course to defeat Kilroy political ally Governor Ted Strickland in the November election.

Congresswoman Kilroy’s ill-conceived plan to discredit Mr. Kasich may backfire, however, as teams overseen by then-Federal Reserve Bank of New York President Timothy Geithner were in the office looking over the shoulders of Lehman Brothers executives as the questionable accounting practices responsible for the institution’s collapse took place. Geithner’s teams were provided desks, phones, computers, and total access to all of Lehman Brother’s books and records. The court-appointed bankruptcy examiner’s report does not indicate that Lehman Brothers kept two sets of books or attempted to hide its accounting practices from regulators. It would appear the questionable accounting was taking place in full view of Timothy Geithner’s team.

In fact, Timothy Geithner’s team appears to have gone to great lengths to give Lehman Brothers’s questionable accounting practices a passing grade. Geithner’s team may have even been complicit in disguising the instability of the institution. On page 1,488 of his report (page 445 of this PDF), the bankruptcy examiner describes how Tim Geithner’s team reduced standards to ensure Lehman Brothers would appear to be in good working order.

If Congresswoman Kilroy is serious about investigating the circumstances that led up to the collapse of Lehman Brothers, she must start with questioning Treasury Secretary Geithner’s ineffective oversight of the organization. If Geithner lacks the capacity to recognize “materially misleading” (the bankruptcy examiner’s words) accounting practices at a single Wall Street banking institution, how can he possibly have the competence to oversee the entire Treasury Department?

However, Ms. Kilroy doubtfully has the courage to ask the tough questions and demand accountability from Secretary Geithner, an Obama appointee. Instead she will undoubtedly use the hearing as an attempt to implicate Mr. Kasich in a scandal by his association as a Columbus-based employee of the collapsed institution.

NEVERMIND that the collapse of Lehman Brothers has already been investigated.

NEVERMIND that John Kasich was over 500 miles away in Columbus, Ohio while Timothy Geithner’s teams were in the room with Lehman Brothers executives as the questionable accounting occurred.

NEVERMIND the facts!

THIS IS POLITICS! By Kilroy’s reckoning, reality only muddies the water. She’s got to deliver for the Ohio Democratic Party so they will deliver for her.

If the Congresswoman were interested in representing her constituents she would devote her time towards fixing the economy and creating jobs, not breaking her knuckles beating a dead horse by reinvestigating a financial institution that collapsed years ago and has already been fully investigated.