The following is in response to this issue, read it here.
On 9 May 2016, the Arrington campaign sent out what it called a “fact check” on this issue. However to those who understand English well, it is nothing more than talking around the central issue. In fact, it’s about what you’d expect from a smooth talking DC-insider.
The campaign wrote:
Glen’s FALSE Attack: “Under Arrington’s leadership, the FDIC ignored the housing bubble, made thousands of sub-prime loans, and then dumped them on other banks, costing taxpayers nearly $90 million.”
FACT CHECK #1: The failure of Superior Bank happened in July 2001. Jodey was not at the FDIC when this happened. He began his tenure at the FDIC on December 2, 2001 – 5 months AFTER this occurred.
[This doesn’t matter, the issue covered by the Wall Street Journal isn’t about when the bank was taken over by FDIC, it is about how the FDIC ran the bank and Arrington was there during the time the questionable loans were being made. – Pratt]
FACT CHECK #2: The FDIC is funded by insurance premiums paid by member banks – NOT taxpayers.
[Taxpayers bailed out many, many banks after the debacle which was caused by the very loans the FDIC kept letting the bank made while it ran it. Thus, it did cost taxpayers. – Pratt]
FACT CHECK #3: The FDIC settlement over the Superior bank failure occurred in 2008 – Jodey left the FDIC on December 31, 2006, two years before this settlement.
[The settlement came at the end of a very long legal suit brought by the Texas bank the FDIC pawned the failed bank off on. The bad actions which led to that lawsuit happened while Arrington was at FDIC. – Pratt]
Overall, a very weak response to the issue. But, better than when the campaign called the whole thing a lie with the very misleading line about how the FDIC doesn’t make loans!
Nothing in this “fact check” email from Arrington rebuts what was documented by the Wall Street Journal or the Robertson campaign.
Links:
- http://www.wsj.com/articles/SB121641296022866029 – requires subscription
- http://prev.dailyherald.com/story/?id=223399 – full reprint you can read free.
- The above was in response to this issue, read it here.
Typical response from an insider but this doesn’t come as any surprise. Arrington nothing but to become an insider and a part of the problem instead of fixing the problem.
Robert, how come you never mention the fact that Jodey saved 80 million in taxpayer funds by cutting a budget and reducing staff..at a time when their responsibility increased.
Meanwhile spending, taxes, and debt has gone up in Lubbock under Robertson’s term, which hurts taxpayers much more than the FDIC contuining business operations for ONE bank, well before the economy’s major collapse.
First, I’ve not covered many of the claims of both candidates. But, Arrington was one of the highest spending high-ups at Texas Tech, on the taxpayer-dime, so I’m not convinced of his conservative nature. His trips to DC? Stays in the Hotel Monaco and The Mayfair – among the more expensive in America.
We don’t even know if Arrington actually cut a budget of his own volition or if he simply carried out an executive mandate to cut budgets due to changes in Congressional funding or Executive Branch priorities. Every agency head could claim to be a budget cutter if they got to count cuts imposed through the budget process in the legislature.
As to Robertson, he has cast a few votes I don’t agree with but he voted against much of the spending increases in Lubbock and against the issuance of CO bonds for the new city hall project. You can’t give him a black-mark for what other did in majority just as you can’t always credit someone personally for what was done if it was not of their own creation.
Lastly, what’s your comment have to do with this FDIC story?
You either have very little understanding of the FDIC and the financial crisis in its entirety, or you are intentionally trying to mislead people.
I am not sure what your agenda is, but it is clear you have one beyond simply being a voice of conservative values. After looking at your website for five minutes, it so transparently evidences a hatred, dislike, vendetta (or whatever it is) against Arrington, that any narration you have regarding this race comes from an unreliable and exceeding biased foundation.
I have watched this campaign from afar without preconceived opinions on either candidate, but it doesn’t take much digging to realize that Robertson’s campaign is pandering to the emotional reactionary political tailwind. So far, every claim he has made (whether through his own campaign or through you) has been easily deconstructed with minuscule amounts of research. His hope that his electorate takes these claims at face value is insulting to the people of his district. His entire strategy the pasts four years has been built on a foundation of belief that his constituents are not educated or dedicated enough to find the truth for themselves.
Thankfully, you and Robertson have vastly underestimated the great people of West Texas, and these attempts of vituperation will be what ultimately seals Glen’s fate.
Blah, blah, blah. Read the Wall Street Journal story. I understand it well, you must refuse to read it. FDIC ran a bank and pumped out over half-a-billion in subprime mortgages while Arrington was Chief of Staff of the agency. It was so bad and covered up by FDIC that Beale Bank of Plano sued the FDIC after agreeing to take the bad bank over and won a huge settlement over the issue. None are so blind as those who refuse to see.
According to the WSJ article you posted, the FDIC absorbed the bank, appointed a new Chairman, hired an outside CEO, and appointed employees to oversee day to day operations. This all occurred before Arrington came to the FDIC. The process was set up and the bank continued to conduct business while the FDIC sought a buyer. According to the article you are using as a source, the FDIC never sought to own the bank, but due to private sector sales falling apart, it was forced to operate the bank while searching for buyers.
So let’s review the timeline you are attempting to use to prove your invalid point. Arrington arrives in December 2001, months after this bank is absorbed and back up and running under the FDIC, with multiple layers of new management already in place. Shortly thereafter in “early of 2002,” the FDIC stopped funding loans and “shuttered the operation” completely in May of that year. So your assertion that he is culpable for loans made during the few months at the beginning of his tenure holds no water if you do not also give him credit for shutting the operation down shortly after he took charge. If he, as Chief of Staff, did have the day to day involvement in the bank that you assert, you should be singing his praises for closing the operation down within months of his tenure.
It is common knowledge regarding the FDIC that they routinely take over failed banks and sell them to the private sector. It also states in the article that:
“the agency backed the Superior loans with extensive warranties about their quality, including that there was no fraud or misrepresentation in their origination. The FDIC says it included such guarantees, in part, to give Beal Bank the ability to sell back to the agency any loans that had fallen through cracks in the oversight process.”
The FDIC knew there may have been issues with loans that fell through the cracks and warranted the sale so that Beal could recoup any money from Depositor Insurance Fees, as they did through this lawsuit, not taxpayer money. The FDIC didn’t “pawn” the bank off on some sucker. The fact that you and Glen assert that goes back to my initial point that you are either ignorant of the FDIC and the entire Superior situation, or intentionally attempting to mislead people.
Crickets…