Lawyers and lobbyists from the finance, insurance and real estate sectors gave $261,445 to Iowa Attorney General Tom Miller's re-election campaign in 2010 -- 88 times more than the previous decade, according to a report released this week.
The National Institute on Money in State Politics
began looking into Miller's campaign contributions as negotiations between his office and major lenders continue. The settlement will be the last deal struck between regulators, law enforcement and mortgage servicers found to be mishandling the foreclosure process last year. The institute is a nonprofit state-level elections watchdog that maintains a campaign finance database.
In September, Miller launched an investigation into the foreclosure processes of Ally Financial (GJM)
. The inquiry grew as documentation problems began to show up across the industry. In October, Miller spearheaded the 50 AG investigation into these problems with each of the federal banking regulators joining. The Office of the Comptroller of the Currency
and the Federal Reserve
split off recently and struck their own deal
with lenders, signing consent orders and requiring servicers to boost staff and develop better loss-mitigation strategies.
But Miller's deal lingers. His office is besieged by consumer advocacy groups demanding harsher penalties for the banks than what the OCC and the Fed offered, and banks pushed back against his reported demands of mandatory modifications, principal write downs and a civil fine of up to $20 billion. Even within his own ranks, Republican AGs have come out against
his settlement. The Oklahoma AG even began directing his staff
to draw up a separate settlement in case a larger one isn't reached.
Now, the report
on his campaign contributions heaps more pressure on Miller to crack down on these firms.
According to the report, nearly half of the money Miller raised in 2010 – $338,223 of the total $785,103 – was donated after his office announced the industry-wide investigation with the other AGs.
"Although it is typical for candidates to raise large sums of money in the month immediately preceding the election, Miller’s out-of-state donations in 2010 were a significant departure from his two previous campaigns, in terms of the amount of money he raised, where it came from, and when," said Kevin McNellis, who conducted the research.
Miller's 2010 total more than doubled the $327,196 he raised for his 2006 and 2007 campaigns – combined.
Contributions from banking attorneys also added up for Miller. The leading firm was Kirby McInerney
, which gave him $25,000, followed by the $11,000 from Kaplan, Fox & Kilsheimer
, and $10,000 from Hanly, Conroy, Bierstein, Sheridan, Fisher & Hayes
Yet partners at Boies, Schiller & Flexner
gave Miller a combined $63,450, or 7.6% of his total, according to the report. This made the firm Miller's biggest contributor.
"The firm also has a long record of defending corporate clients and dealing with complex financial litigation," McNellis said. "Goldman Sachs
hired the firm in June to defend it from a hedge fund seeking $1 billion over subprime mortgage-linked securities sold to them by Goldman, as well as several other suits brought against Goldman involving other investments backed by subprime mortgage-linked securities."
Kevin Arquit, a partner at Simpson, Thacher & Bartlett
, gave Miller $12,500 and has listed JPMorgan Chase (JPM)
, Wachovia and Lehman Brothers as clients.
The eight partners at Williams & Connolly
gave Miller $10,500. Most notably, they have represented former executives at Fannie Mae
, including former CEO Franklin Raines. These executives have come under Congressional investigation, calling into question the ethics of charging Fannie Mae, ultimately the taxpayer, for these legal fees.
Finally, Miller received $50,000 from the Democratic Attorneys General Association
, a poltical organization that supports left-leaning AGs. Several of the same law firms that donated directly to Miller, give money to DAGA. But so do the largest banks. Bank of America (BAC)
contributed $80,000 to DAGA, followed by $75,000 from JPMorgan Chase (JPM)
and $65,000 from Citigroup Global Markets, a subisidiary of Citigroup (C)
Neither Miller nor the named law firms responded to requests for comment.
Already consumer advocacy groups are calling on Miller to give the money back.
"He had a tough fight in 2010 and he needed to raise money," said Mike McCarthy from Des Moines and a member of the Citizens for Community Improvement
. "But this investigation is far too important to be jeopardized by any whiff of big bank influence. The right thing for Miller to do is return the money so there is absolutely no question if campaign contributions are a factor in these negotiations."
Miller has become the face of what could be the most striking crackdown on the financial industry since its collapse in 2008. But McNellis said, whatever the outcome, it will be worth comparing the terms to the contributions.
"It should not be surprising that those most concerned with the outcome gave money to the man serving as the central broker between millions of underwater homeowners and national and multinational financial institutions, with billions of dollars hanging in the balance," McNellis said.
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