State Lawmakers vs. Wall Street Clashed at NCSL; Banksters Freaked Against Legislators Over Glass-Steagall

December 5, 2013 • 9:08PM

At the Legislative Forum of the National Conference of State Legislatures (NCSL), being held in Washington, D.C. Dec. 4-6, Wall Street conducted a thug operation to prevent lawmakers' voting up support for a Resolution backing reinstituting Glass Steagall, which was submitted by Maine Rep. Andrea Boland, and co-sponsored by 18 other state legislators, from 15 different states. Lobbyists for the mega-banks were present in force, skulking among the 200+ attendees of the Forum; Wall Street networks activated three letters against the Boland Resolution—one from the Maine Bankers Association, one from the New Hampshire Bankers Association, and a joint one from Maine's Governor and Commissioner for the Department of Economic and Community Development.

The clash came to a head mid-day on Thursday, when the relevant NCSL Committee officially took up the Glass-Steagall Resolution; and heard a powerful 12 minute presentation from Rep. Boland. When the 10 Committee members then voted unanimously against the Resolution—after presenting blatant bought-and-paid-for-rhetoric right out of the ABA letters—the point was clearly made: Boland herself, and the principle of Glass-Steagall are victorious over the corruption of those still grovelling to the banksters.

Wall Street is clearly freaked. Its huge deployment to the August national conference of the NCSL successfully staved off passage of a similar resolution which would demand that Congress act to push through the Glass Steagall bills in Congress—HR 129 and S. 1282 or S. 985, but the momentum nationally for cutting off Wall Street and its deadly gambling crimes, has continued to grow.

- Glass Steagall in Committee; Banksters on Patrol -

The following blow-by-blow account was provided from an attendee at Thursday's hearing by the NSCL Committee on Communications, Financial Services and Interstate Commerce, 10 of whose total membership (of 16-18 members) were present. (Taping was not permitted). Of the total audience of 30 at the hearing, at least 25% were bank lobbyists—including Bank of America, JPMorgan Chase, Citigroup, and the American Bankers Association—out in force on behalf of Wall Street, patrolling the halls and proceedings. [Earlier this morning at a different hearing, one EIR reporter was kicked out of the conference, for not having, "the right credentials." This occurred right after the reporter, covering a session on privatizing Fannie Mae and Freddie Mac as a banking "reform," raised a question on Glass-Steagall. Shortly thereafter, not only was she expelled, but other journalists were summarily subjected to a credentials check, to determine if they were "legitimate media"].

The Committee on Communications, etc., convened at 1:30 pm, with the Glass Steagall Resolution as the first order of business. Its sponsor, Maine Rep. Andrea Boland, was called as the witness, and gave an eloquent, extempore 12 minute presentation, demanding its passage. The text was projected on the screen; parts of it were read aloud. The text was also available in the NCSL conference booklet.

But in addition, all hearing participants had printed copies of an attack on the Resolution, issued Dec. 3 to the lawmakers, by George Gervais, Commissioner of the Maine Department of Economic and Community Development, on behalf of himself and Governor Paul LePage, a man widely disliked in his own state.

- Rep. Andrea Boland's Presentation -

Rep. Boland began by explaining her Resolution to Reinstate Glass Steagall. She then continued, speaking very directly to her fellow lawmakers (reported here throughout, in paraphrase): I know that the American Bankers Association (ABA) and bankers have been lobbying against the Resolution. I know that all of you need to raise money to get re-elected. I know that the bankers are all over the legislatures. I know it will be hard for many of you to vote for this Resolution, because the bankers have a powerful lobby.

But look: the crisis is in the headlines. She read a headline, "JPMorgan Chase Makes $13.8 bil Settlement;" and another: "Bank of America Makes Large Settlement on Bad Mortgages," She read, 'The tally of U.S. banks is at a record low [number]. The small banks are run out of business, while the big banks are continuing to grow.' She said, there are no loans going out to Mainstreet. They major banks are speculating to a degree not seen since the 1929 crash.

Let me give this a personal slant. In my other life, I am a real estate title examiner, and I have seen a dramatic change take place. Previously, the title examiner attorney would sign his name to a certificate of title, and stand behind it. Now, we have title insurance; and the lawyer doesn't have to stand behind his examination.

Now, the same thing is going on with the large banks; they are selling protection with securities, to protect themselves from disaster. Not to expound on every detail, but this process is leading us to a new crisis.

When I raise Glass-Steagall to ordinary people in Maine, they say: 'It makes sense. We should not be speculating with the money people put in the bank.' It should be secure to ordinary people, who just want their money safe in the bank. If people want to speculate, they should do to a brokerage house, or investment firm.

Now, people deposit their money, and it's speculated on. A mortgage might be issued; then the mortgage is sent out of town. It used to be the case, that the mortgage stayed in town. You knew your own banker. And we've lost that feeling.

It's just like when I'm a title examiner. I saw the prices started to skyrocket on the same properties. I said to myself, how can that be? And then I saw the urgency to quickly re-sell the mortgage to a secondary market; and then what happened is, there would be selling, re-selling, packaging, and again, re-selling. The process is now selling, reselling, packaging the same mortgage. The commercial banks have essentially been funded the same way as the investment banks.

And to keep the process going, they are getting $85 bil a month from the Federal Reserve, to keep doing this. If the Federal Reserve evens mentions reducing this, the stock markets immediately go down.

- Banking System: A House of Cards -

It's now like a house of cards. There is $70 trillion in the global GDP, and $770 trillion in global derivatives supported by the GDP! This makes no sense.

The banks are being funded, but businesses can't get loans. In many states, re-development authorities, which build infrastructure, can't get money because the money is going other places. And now, as we are fighting to get Glass Steagall, threats are coming down from the bankers, pleading, 'why didn't you call us, to let us know your concerns.'

In Maine, Bank of America is threatening to move over a thousand people, and there would be eight people losing their jobs in my area. And people think that's what this is all about.

Well, if Glass Steagall passes, there will be more pain for some of the banks. But I would rather have pain for the banks, than pain on the rest of us for not doing this.

Ask yourself, there's $700 trillion being traded in derivatives against $70 trillion in GDP—that's a small pot holding up a gigantic tower. A lot will be lost by some people. But a lot will be gained by my people and any citizens whom you represent.

There will be pain for people at the top, lots of pain. But better that, than pain for people at the bottom.

- Three Piqued Responses -

The Committee members, and those in the room were completely provoked by Boland's tough presentation. Immediately four of the nine Committee members jumped up to speak.

Sen. Travis Holdman. The first was a state senator from Indiana. A former bank chairman, and chairman of the banking committee in the state Senate (where Glass Steagall did not pass, though it passed in the Indiana state House), he said, 'I take offense personally at the implication that I am taking money from the bankers, and the implication that that's why, it influences what I do. If I took contributions in Indiana, I would be immediately brought up on ethics charges. How dare you insinuate this?'

The Indiana lawmaker was flipped, and continued: 'The lady from Maine, whom I respect, read to you from the Wall Street Journal, well I'm going to read to you from the Wall Street Journal.' He then picked up Thursday's issue of the WSJ, "Banks Brace for Tighter Regulation," indicating, 'now let me keep reading from the newspapers,' but instead, he picked up the ABA fact sheet, and read it verbatim! He read for five minutes, as if it came from the newspapers. He even said it was from the newspapers.

And furthermore, he then said, it is true that the Glass Steagall Resolution passed the Indiana state House, but not the Senate, and everybody knows, that if it just passes one house, it's not worth the paper it's written on.

What I think is, that we don't need Glass Steagall, we need to repeal Dodd Frank, and privatize Fannie and Freddie. He sat down.

Sen. Curtis Bramble. The second respondent was Wayne Harper, Chairman of the Committee, who went through his own credentials. "I am the Chair of the Business and Labor Committee in Utah. For the sake of disclosure. I am a CPA and I audited banks in the 1980s to make sure they complied with FDIC requirements. I'll be honest. Frankly, I've been lobbied even more by LaRouchePAC, than even the ABA. If people in this room vote for the Resolution, it doesn't mean they support LaRouchePAC. And if they vote against it, it doesn't mean they support the ABA.'

After this formulation—calculated for impact, Harper continued, 'OK. I just want to read something.' He then took the Dec. 3 letter from Maine, and read it, to attack the Glass Steagall Resolution. He ended, with, 'I think, based on this, we should defeat the Resolution on its merits.'

Rep. Barry J. Hobbins. State senator from Maine. Went through faint praise for Andrea, describing her, "as always being passionate for the issue she fights for. We disagree on this, however. Maine has 9,000 people in its financial institutions, who could be affected. I am on the board of Gorham Savings Bank, and the president of our bank, is now the state president of the Maine Bankers Association. And not only that, but for the purposes of disclosure, the Maine Bankers Association did contribute to my compaign.' He continued coyly, playing to the bank lobbyists, 'But frankly, it was a small contribution, and I had expected more.'

Then, picking up the Maine ABA letter, he continued, 'So this Resolution assumes that the repeal of Glass Steagall led to the crash. But I just want to re-quote my friend from Indiana, who said there were other causes. [His friend had NOT given other causes; he too had just read the ABA letter]. Frankly, there are changes going on now in banking pursuant to Dodd Frank, and we now have the tools to regulate the banks,' which was a direct quote from the ABA letter. 'Therefore, passing this Resolution would not be good for the citizens of Maine.'

[A banker then stood up—not clear where he was from; and then, sat down].

A motion was put to take a vote. But Rep. Dan Flynn from Texas stood up, 'Before we vote on the motion, I request a point of order, to make one last comment. I am a former banker, and frankly, I oppose the Resolution. The repeal of Glass Steagall didn't cause the crash. What we should do, is repeal Dodd Frank. The repeal of Glass Steagall has been talked about by people who have been talking to me on the phone and in the halls, but my conclusion is that we should defeat it.'

- Andrea Boland's Rebuttal -

Andrea Boland intervened at this point, saying, 'I want to make a brief rebuttal.' She was given one minute. She said, 'I know that the bankers know about how to present their case to you. And I know that you have gotten letters from them on this. And I apologize to you for the letter you have received from my governor; and that the letter was signed by the Secretary for Economic Development.

'I have another resolution in an adjacent committee on protecting our electric grid, and our Secretary, Mr. Gervais, who signed the letter, would not even consider measures for protecting our electric grid, even though my resolution passed the Maine legislture. It hurts when you lose your electricity.

'Look, all the arguments today presented against this Resolution, have been total mis-information. I urge you to consider the arguments of Elizabeth Warren, Marcy Kaptur and Tom Harkin, and not the arguments of the banks. Follow what Elizabeth Warren is saying, against the bankers.'

The vote was then taken, which was unanimous against the Resolution, except for Maine, which was termed a "split" vote, because the two Maine lawmakers voted oppositely. It was noteworthy, that at least two Committee members had previously said that they would vote up the Resolution, but were strong-armed against it.

Afterwards, as people started leaving, all the Committee Members gave a craven thumbs-up, or shook hands with the bank lobbyists. It was conspicuous.

Previous Entries on this story:

Glass-Steagall at center of NCSL Forum in D.C.
"Wall St. is Doing our Work for us"