FollowTheMoney.org
by Kevin McNellis, April 20, 2011
Iowa Attorney General Tom Miller’s campaign war chest got a dramatic boost after he announced his leadership of the 50-state attorneys general investigation into foreclosure irregularities. Out-of-state law firms and donors from the finance, insurance, and real estate sector gave $261,445-which is 88 times more than they had given him over the previous decade.
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This publication was made possible by grants from:
Ford Foundation
Foundation to Promote Open Society
The Pew Charitable Trusts
Rockefeller Brothers Fund
Sunlight Foundation
Last fall, The New York Times reported that the nation’s largest banks were improperly—and potentially illegally—rushing foreclosure proceedings with faulty or incomplete paperwork, which caused the banks to temporarily declare a moratorium on pending foreclosures and prompted the state attorneys general to launch an investigation into their foreclosure practices.1 2 The first tangible evidence of that effort—led by Iowa Attorney General Tom Miller since last October—was leaked to the press in March.3 4
With negotiations nearing their conclusion, the final terms of the agreement will have significant implications for not only the nation’s largest banks and millions of homeowners, but the entire housing market and U.S. economy.
Given these stakes, it is not surprising that Attorney General Tom Miller—who has coordinated the national investigation and is currently at the center of the final negotiations—received large campaign donations from a variety of contributors with a vested interest in the final terms of the settlement.
Nearly half of the money Miller raised in 2010—$338,223 of $785,103—was donated after the October 13 announcement that he would be coordinating the 50-state attorneys general investigation.5
A detailed look at the campaign contributions made to Iowa Attorney General Tom Miller reveals several interesting giving patterns.
First, however, these contributions have to be put into the larger context of Tom Miller’s involvement in last fall’s foreclosure moratorium, which began when Ally Financial (formerly GMAC), JPMorgan Chase, and Bank of America halted their foreclosure proceedings in dozens of states between September 20 and October 1, 2010.6 7
On September 24, Miller announced that his office was opening a civil investigation of Ally Financial’s foreclosure processes in Iowa.8 Two weeks later, on October 7, Miller’s office issued a press release stating that Miller had spoken to representatives of JPMorgan Chase, Ally Financial, and Bank of America regarding their foreclosure proceedings; as well as “assigned staff to convene a separate group of bipartisan state attorneys general and state banking regulators to coordinate states’ reviews and responses to the troubling disclosures by mortgage companies.”9
Almost a week later, on October 13, Miller’s office made the official announcement that his office was coordinating a 50-state effort to examine foreclosure practices by major financial lenders.10
Miller’s major contributions from out-of-state lawyers and firms closely tracks these developments. Between September 30 and Election Day, Miller received $170,300 from lawyers outside of Iowa, which is two-thirds of all the money he raised from them during the entire two-year election cycle. (For a more detailed, day-by-day timeline of Miller’s contributions from lawyers and lobbyists, see his contributions timeline).
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.
| Election | Out-of-state Contributions | Percent of Total |
|---|---|---|
| 2010 | $497,357 | 63% |
| 2006 | $10,508 | 10% |
| 2002 | $19,498 | 9% |
Even more interesting is that it was the lawyers and donors from the finance, insurance, and real estate (FIRE) sector from outside of Iowa who were largely responsible for this reversal. Out-of-state lawyers and lobbyists gave Miller $261,445 in 2010, which is 88 times more than they gave over the previous decade. Out-of-state donors from the FIRE sector gave Miller $56,150 in 2010, compared to $3,500 in 2006 and $1,000 in 2002.
The out-of-state lawyers who suddenly took a strong interest in Miller’s reelection last fall are among the most prominent litigators and partners from some of the largest and most famous corporate and class action firms in the country, which is not surprising given the numerous high-stakes court cases filed in the wake of the financial collapse of 2008 that could be impacted by the pending settlement.11
| Firm | Total from Firm | Total from Firm’s Employees | Grand Total |
|---|---|---|---|
| Boies, Schiller & Flexner | 0 | $63,450 | $63,450 |
| Kirby McInerney | $25,000 | 0 | $25,000 |
| Simpson Thacher & Bartlet | 0 | $12,500 | $12,500 |
| Williams & Connolly | 0 | $10,500 | $10,500 |
| Kaplan, Fox & Kilsheimer | $11,000 | 0 | $11,000 |
| Hanly, Conroy, Bierstein, Sheridan, Fisher & Hayes | $10,000 | 0 | $10,000 |
| Total | …………………$46,000 | ………………………………………..$86,450 | ………..$132,450 |
Below are detailed explanations of the out-of-state lawyers and firms that gave Tom Miller significant contributions.
David Boies, Donald Flexner, and Robert Silver—all partners in the New York firm Boies, Schiller & Flexner—gave Miller $60,000, or 7.6 percent of his total, making the firm the largest contributor to Miller’s campaign.12 The firm is one of the most prominent in the country, best known for representing the U.S. government in U.S. vs. Microsoft, and Vice-President Al Gore during the 2000 presidential election recount.13
The firm also has a long record of defending corporate clients and dealing with complex financial litigation. Goldman Sachs hired the firm in June of 2010 to defend itself 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.14 15
Kirby McInerney—which is litigating Wachovia, Moody’s Corporation, National City, and Citigroup on behalf of state pension funds and shareholders who claim these firms misled them about their subprime mortgage investments—gave Miller $25,000.16 17 18 19
Kevin Arquit, a partner at Simpson Thacher & Bartlett, gave Miller $12,500. Arquit, according to his official Simpson Thacher & Bartlett biography, is “regularly recognized as one of the world’s top antitrust attorneys.”20 Simpson Thacher & Bartlett has recently been linked to several major players in the housing market. Most notably, the firm has worked with the Treasury Department’s Troubled Asset Relief Program (TARP), as well as listing JP Morgan Chase, Wachovia, and Lehman Brothers as clients.21 22
Eight partners from Williams & Connolly, another Washington, D.C. firm, combined to give Miller $10,500. The firm has experience defending high-profile clients—including representing President Clinton during his impeachment trial.23 The firm has been retained by Fannie Mae’s former CEO, Franklin Raines; its former CFO, J. Timothy Howard; and an ex-controller, Leanne Spencer, who all resigned in 2004 over allegations about Fannie Mae’s accounting practices.24 25 One of these partners, Gregory Craig, also deserves mention, as he was one of the first lawyers retained by Goldman Sachs in response to the SEC lawsuit.26
Kaplan, Fox & Kilsheimer gave Miller $11,000. The firm is suing Countrywide Financial and Fannie Mae over their use of subprime mortgage lending.27
Hanly Conroy Bierstein Sheridan Fisher & Hayes, another prominent New York-based class action firm, gave $10,000.
Milberg LLP, a prominent class action firm that is suing Citigroup over its mortgage modification practices, gave Miller $7,500.28
Meyer Koplow, a partner at the New York firm Wachtell, Lipton, Rosen & Katz, gave Miller $5,000. Koplow is most famous for negotiating Philip Morris’ $206 billion class action settlement with state attorneys general in 1998.29
Frederick Kuykendall III, of both the Murphy Firm and Kuykendall & Associates, is currently involved in the class action suit against British Petroleum over the Deepwater Horizon oil spill.30 Kuykendall gave Miller $5,000.
Robert Sherman coordinates with state attorneys general for Greenberg Traurig, a global, 1,800-lawyer corporate litigation firm.31 32 Sherman gave $1,500 to Miller, and Greenberg Traurig’s PAC contributed an additional $2,000.
Bernard Nash of the firm Dickstein Shapiro gave $2,500. Nash is a prominent corporate litigator, and advertises his own experience dealing with state attorneys general. According to the firm’s own website— “under Mr. Nash’s leadership, the State Attorneys General Practice has become the country’s largest and premier practice devoted to resolving State Attorney General disputes.”33
Stephen Houck is a prominent antitrust lawyer at Menaker & Herrmann, as well as the executive director of The Center for State Enforcement of Antitrust and Consumer Protection Laws, which supports antitrust and consumer protection enforcement across the country. Houck gave Miller’s campaign $1,000.
Miller received contributions from two notable FIRE contributors.
Elizabeth McCaul gave Miller $10,000. McCaul is the Partner-in-Charge of Promontory Financial—a large New York City-based consulting firm—and the former Superintendent of Banks for the State of New York Banking Department, the regulatory agency that oversees the banking industry in New York state, including Wall Street firms.34
Linda Killinger, the wife of Washington Mutual’s former CEO Kerry Killinger, gave Miller $10,000. Washington Mutual did not survive the credit crisis of 2008, largely because of its subprime lending, and Mr. Killinger is being sued by the FDIC over the firm’s collapse.35
Miller also received $50,000 from the Democratic Attorneys General Association (DAGA), a political organization that supports Democratic candidates across the country who run for attorney general. OpenSecrets.org lists DAGA’s top 2010 contributors, summarized below.
Notable contributions made to DAGA by lawyers and law firms include:
Also among DAGA’s top contributors were the same financial firms being sued by the above firms:
An agreement between 14 major mortgage lenders and the Justice Department was reached on April 13, and the state attorneys general hope to reach a separate agreement in the next several months.39 It will be worth comparing the final terms of the agreement with the contributions listed above.
These contributions are both remarkable and altogether expected—remarkable for their size, their extreme deviation from Miller’s historical fundraising patterns, and the combined legal talent and experience accrued between the contributors themselves. Expected because the negotiation process has moved between the federal and state level.
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.
This report was posted on April 20, 2011 by Kevin McNellis.
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