« | »

Subprime Fat Cats Begat Democrat Fronts

From last weekend’s Saturday Night Live:


NANCY PELOSI: This is Herbert and Marianne Sandler, tell us your story.
HERB SANDLER: My wife and I had a company which aggressively marketed sub-prime mortgages and then bundled them as “securities” to sell to banks, such as Wachovia. Today, our portfolio is worth almost nothing. Though at one point, it was worth close to $19 billion.
NANCY PELOSI: Oh my God, I’m so sorry. Were you able to sell it for anything?
HERB SANDLER: Yes. For $24 billion.
NANCY PELOSI: I see. So, in that sense, you’re not actually “victims,” as such.
HERB SANDLER: No. That would be Wachovia bank.
MARION SANDLER: Actually, we have done quite well. We’re very happy.
HERB SANDLER: We were sort of wondering why you asked us to come today.
MARION SANDLER: Anyway, it’s delightful to see you, Nancy.
NANCY PELOSI: And thank you, Congressman Frank, as well as many Republicans, for helping block Congressional oversight of our corrupt activities.
BARNEY FRANK: Not at all. There’s an important social contract here. When deceitful housing lenders play by the rules, and bribe members of Congress with campaign contributions, they have a right to expect that we will protect them from losing money. Now let me say something else here. Many of you are probably wondering, where did that $700 billion missing from our economy go? To help answer that, let me introduce our good friend, billionaire hedge fund manager, George Soros…

The couple mentioned, Herb and Marion (sic) Sandler, are actually all too real.

As the skit suggests, they are the people behind the Wachovia failure scandal. They sold their S&L holding company to Wachovia in May 2006 for $24 billion in cash and stock.

It also happens that the Sandlers, are seminal financiers of the extreme left in this country.

The Sandlers helped to create and then spearhead the enormous Democrat funding machine. They got the whole thing going.

The Sandlers have put millions of their ill-gotten dollars into the coffers of these Democrat controlled 527s and other front groups, such as Media Matters and ACORN. And th3ey have gotten their friends, like George Soros, to join in.

From “Her Way: The Hopes and Ambitions of Hillary Rodham Clinton,” by New York Times reporters Jeff Gerth and Don van Natta, Jr., pp 313-14:

The War Room

Just as 1992’s election inspired conservatives like Scaife to get involved, the 2000 election was a wake-up call to some wealthy liberals about the reach and influence of the other side’s information infrastructure. One of those who responded was Herb Sandler, who, in concert with his wife, Marion, is an enthusiastic supporter of left-leaning causes. At the time, the Sandlers ran World Savings, one of the nation’s leading savings and loans. Sandler was determined to create an ideological counterweight to conservative think tanks like the Heritage Foundation. From their base in Oakland, California, the couple tried to apply tough-minded business-management techniques to progressive philanthropy.

Meanwhile, John Podesta, the last chief of staff to President Clinton, had coauthored a memo exploring the need for a liberal think tank. The memo found its way to Sandler, and the two men met in Washington. Podesta, a gaunt marathon runner in his fifties, had long worked the trenches of Washington’s public-policy wars. Sandler, a lanky California businessman with big ideas, was a generation older. Both men were trained as lawyers and knew how to negotiate. Podesta agreed to head up the new entity, and Sandler became the organization’s largest donor. Another billionaire supporter of leftist causes, George Soros, also kicked in financial support.

The new tax-exempt group opened its doors in downtown Washington in 2003 as the Center for American Progress

Once its roots were established, the center broadened its financial base by seeking donations from a group of left-leaning donors that came together in 2005 under the umbrella of an organization called the Democracy Alliance

This December 2006 article from the Capital Research Center publication Foundation Watch (pdf file) picks up the story:

George Soros’s Democracy Alliance: In Search Of A Permanent Democratic Majority

By James Dellinger and Matthew Vadum

Despondent after George W. Bush won re-election, a small group of billionaire Democrats met in San Francisco in December 2004 to reflect on John Kerry’s failure to capture the White House. George Soros, Progressive Insurance chairman Peter B. Lewis, and S&L tycoons Herb and Marion Sandler were angry and depressed. They felt they had been taken—seduced by the siren song of pollsters and the mainstream media who had assured them that the capture of the executive mansion was theirs.

But despite giving millions of dollars to liberal candidates and 527 political committees, the donors came away with nothing. At about the same time another group of wealthy Democratic donors was meeting at a hotel in Washington, D.C. feeling the same way. “The U.S. didn’t enter World War II until Japan bombed Pearl Harbor,” political consultant Erica Payne told the meeting. “We just had our Pearl Harbor.”

Determined to bring the Democratic Party back from the political wilderness, Soros and the others decided they needed a long-term strategy to regain power…

In 2005 the Democracy Alliance was born. It was an odd name for a loose collection of super-rich donors committed to building organizations that would propel America to the left…

DA’s managing director, Judy Wade, said she hopes the Alliance will work with other funding groups and eventually give out $500 million in grants each year.

Selected Grant Recipients

We can identify a number of left-wing groups that have gone through the DA’s vetting process and received funding. Some grant amounts have been reported in the press but there is no official tally.

*Media Matters for America: Former conservative journalist David Brock’s group claims to expose right-wing news bias…

*Center for American Progress: Former Clinton White House chief of staff John Podesta heads the think tank that received $5 million from the DA…

*Citizens for Responsibility and Ethics in Washington (CREW): This Soros-funded group sees itself as a left-wing version of Judicial Watch, the conservative legal group that filed a barrage of lawsuits against the Clinton administration in the 1990s….

*Association of Community Organizations for Reform Now (ACORN): ACORN is a radical activist group active in housing programs and “living wage” campaigns in inner cities neighborhoods in more than 75 U.S. cities. In recent years it has been implicated in a number of fraudulent voter-registration schemes.

*EMILY’s List: While the political action committee boasts that it is “the nation’s largest grassroots political network,” it is essentially a fundraising vehicle for pro-abortion rights female political candidates…

*America Votes: Another get-out-the-vote 527 organization, it is headed by Maggie Fox, a former deputy executive director of the Sierra Club…

*Air America: The struggling left-wing talk radio network filed for bankruptcy protection on October 13 after it reportedly had received a funding commitment of at least $8 million from the Alliance…

The Democracy Alliance may have as many as 100 donor-members, both individuals and organizations. However, it has not made available an official list of its “partners.”

Here are known members:

George Soros, the billionaire head of Soros Fund Management LLC, Soros is founder of Quantum Asset Management and the grant-making Open Society Institute. He donated $24 million of his own money to 527 committees that made “independent expenditures” to defeat George W. Bush in 2004. His son Jonathan is also a member of the DA…

Herb and Marion Sandler are the co-founders of Golden West Financial Corp. They sold their S&L holding company to Wachovia in May for $24 billion in cash and stock. In 2004 they gave $13 million to anti-Bush 527s

Bear the Sandlers in mind when you read about the problems at Wachovia.

And when you hear Democrats say the current mortgage fiasco is all the fault of Republicans.

These are the very people Mr. Obama says tricked folks into buying a mortgage.

(Ed Lasky has a highly informative backgrounder on the Sandlers deep involvement in the Wachovia failure at the American Thinker.)

This article was posted by Steve on Tuesday, October 7th, 2008. Comments are currently closed.

24 Responses to “Subprime Fat Cats Begat Democrat Fronts”

  1. 1sttofight says:

    Gee Steve , this video seems to have been yanked from youtube. How did you get it? ;)

  2. texaspsue says:

    1st is right, all of the other Conservative websites have been talking about the removal of the video all day. I’m impressed SG. :-)

  3. 1sttofight says:

    I got a feeling Steve ducks into a phone booth occasionaly.

  4. mathews says:

    better get your own copy of that SNL Bailout skit, http://msunderestimated.com/SNLBailoutSkit.wmv

    as reported at hotair.com, newsbusters.com and several other places NBC’s pulled it down and deleted all comments, some youtube’s SNL Bailouts have been taken down as well as this video’s going viral.

  5. Icarus says:

    Very enlightening!!!

    I’d like to hear more on Soros!

  6. VMAN says:

    Thanks God for the left. Defenders of free speech. What would we do without them? We wouldn’t be able to say a thing. Our every word would be stifled. How could we go on? Oh! Wait a minute! There’s someone knocking at my door! You represent who? Obamaaaa a lsc a
    m sigmfnkj;,.’;pinoun HELP!!!!!!!!!!

  7. Steve says:

    “I’d like to hear more on Soros!”


  8. Icarus says:

    Looks like I’m going to be busy for awhile!

    Thanks… lol

  9. U NO HOO says:

    Video no longer available.

  10. gipper says:

    Wow, I just checked Michelle Malkin’s site and this video has been pulled. I watched SNL live on Saturday. I couldn’t believe they skewered the left like this. I particularly enjoyed George Soros’ title: Multi-billionaire Hedge Fund Manager and Owner, Democrat Party.

  11. dulcimergrl says:

    I woke up in the middle of the night and had a chance to watch the video. Thank goodness I couldn’t sleep; otherwise I’d have missed it completely! I also got a laugh out of George Soros’ title. Too bad we can’t watch it again…:-(

  12. Exeter says:

    The link to msunderestimated that mathews provided still works.

  13. GuppyNblue says:

    Ed Lasky wrote a relevant piece at the American Thinker. According to him, Herbert and Marion Sandler sold adjustable rate mortgages (ARMS) at low “teaser” rates that then went up with interest rates. “They were often sold aggressively to unsophisticated home buyers who did not comprehend the vast financial risks they were taking, or who assumed that housing prices would rise high enough to provide a profit to them when they sold their houses.” Sound familiar? Wachovia’s acquisition of the Sandlers savings and loan (Golden West Financial) was “one of the worst merger and acquisition deals of all time for the buyer”.

    Lasky wrote this article before Citigroup offered to buy Wachovia and the stink has gotten worse since. Wells Fargo had also been looking into acquiring Wachovia and offered a much better deal for all. I’d like to why the FDIC has a problem with this.

    Going back to the Sandler’s Lansky writes, “The Sandlers have started to invest their billions of dollars politically, in the manner of George Soros, sugar daddy of many far-left wing groups and an early and prominent supporter of Presidential candidate Barack Obama”. One of those investments was to start an investigative journalism group called ProPublica.

    Here’s my take on this. We all know that news stories are discovered by investigative journalist (newspapers like the New York Times) and then disseminated to all the many outlets (like Yahoo). These journalists are already no more than leftist propagandist and now some Soros wannabes intend to centralize mainstream news under even tighter control. Couple this with a sure bet that a Democrat administration will bring back the Fairness Doctrine. The first Amendment states that Congress may not abridge the freedom of the press but it says nothing about commie billionaires or government bureaucrats like the FCC. Our government is not going to police itself and IMO we’re going to have to find a way to do it ourselves. I believe that the Declaration of Independence does provide for that.

    For Ed Lansky’s article click here.

  14. Reality Bytes says:

    Life Imitating Art, Imitating Life


    You think crucifixion can make a come back?

  15. Steve says:

    I linked to the Lasky article at the bottom of the article.

    It’s a great piece. But it does miss how absolutely pivotal the Sandlers have been in funding the left.

    The Sandlers weren’t just another couple of Democrat fat cats giving to DNC fronts and 527s.

    They STARTED the ball rolling, back in 2002.

  16. GuppyNblue says:

    Sorry. I do make an effort not to be redundant but missed that one.

    Reality Bytes
    I just wish we would start prosecuting for treason again cough(Murtha) cough(Reid)

  17. Steve says:

    “Sorry. I do make an effort not to be redundant but missed that one.”

    I added it after the original post, so you may have read the article before it was up.

  18. 1sttofight says:

    mathews link is audio only.

  19. 1sttofight says:

    Malkin has the video up and running now, don’t know how long it will last.


  20. Reality Bytes says:

    “God – I do love it so.” – General George S. Patton

  21. Reality Bytes says:

    OK – stupid question but is it possible for SNL to win a Pulitzer for that skit?

  22. Icarus says:

    This skit was very accurate and very funny!!!!!!!!!!!
    If SNL would bash the left 50% of the time or more, they’d have a very popular & funny show.
    Lots of material to work from.

  23. Steve says:

    From a March 1, 2004 article in Forbes:

    Stick to Your Knitting

    Seth Lubove, 03.01.04

    After 41 years and many failed competitors along the way, HERB AND MARION SANDLER still run what is not just the U.S.’ best-managed thrift, but perhaps its best financial company. More surprising, they’re happily married after working side by side the entire time.

    Drop in on the Oakland, California headquarters of Golden West Financial and you’ll get a taste of a homespun, unassuming company under family control. Shortly into an interview at the thrift holding company, Marion Sandler, co-chief executive, pulls out a knitting needle and ball of yarn and picks up where she left off on a sweater for hubby, Herbert, the other co-chief executive. Marion, 73, admits to frequently knitting during meetings–“except when I’m running it,” she helpfully notes. Herb, 72, jumps up, opens his closet and proudly shows off another cable-knit sweater Marion made for him.

    It’s just the way it was 41 years ago, when the Sandlers, with a little financial help from Marion’s brother Bernard Osher, paid $3.8 million to acquire a two-branch savings & loan in Oakland. Except that the thrift has grown a little bigger. Now Golden West has $80 billion in assets, making it the second-largest pure thrift after Washington Mutual. The Sandlers’ stake is worth $1.8 billion. Osher’s got another $695 million worth of the stock.

    How do the Sandlers do it? It’s what they don’t do that makes this company a standout among financial institutions. Golden West gathers deposits and lends the money out as mortgages on modestly priced, single-family homes. No junk bonds, no loans for shopping centers, golf courses or million-dollar mansions. The Sandlers installed ATMs only in the 1990s, and they still aren’t sure the expense is worth it. They give away free toasters for new accounts.

    “We’re boring,” Herb says, proudly. But not on Wall Street, where Golden West’s numbers have drawn some attention. The Sandlers have produced compound annual earnings-per-share growth of 20% over the last 35 years, a record that appears to be unmatched by any other financial firm, with the possible exception of Warren Buffett’s Berkshire Hathaway. Golden West was the top performer among banks in the Forbes Best Managed Companies ranking, with a five-year annualized return of 26.6%, better than every other bank by almost half. Citigroup Smith Barney analyst Michael Diana, whose firm doesn’t do any investment banking with Golden West, gushes that Golden West isn’t just the best thrift, or even the best financial services company, but is “among the best companies of all industries.”

    “It’s as if they came into the business and turned everything people hate about their industry on its head,” says Christopher Davis, whose Davis Selected Advisers is the largest shareholder of Golden West after the Sandlers, with 14.6 million shares. “People say it’s a commodity business. They deal with that by being low cost. It’s rate sensitive. They deal with that by predominantly offering adjustable rate mortgages. It’s just dramatic.”

    Yet the couple still run the place as the U.S.’ largest mom- and-pop shop. In addition to keeping Herb warm with sweaters, Marion oversees much of the advertising (no TV, mainly print), handpicks the architects for the company’s 475 branches and offices and authors much of each annual report. Herb or Marion personally call every employee on significant anniversaries with the company, while Herb keeps a close eye on costs and fires off frequent missives to politicians and regulators warning of one industry catastrophe or another.

    “Their business is seven days, seven nights a week,” says Marion’s brother Osher, who also controlled auction house Butterfield & Butterfield before selling out to Ebay. “They watch the store. That’s their life.”

    Although Herb insists they’ll stick around as long as the couple is making “a useful contribution,” they’re not getting any younger. In anticipation of the day when they finally depart the executive suite, the Sandlers have installed behind them two executives with a combined half a century at the company. But the Sandlers are a unique tandem team who will be hard to replace.

    Of more immediate concern, the company has profited like much of its competition from a low-rate, strong housing economy, especially in California, where Golden West has 62% of its loans. But if rates rise, as they surely will in a healing economy, home lenders such as Golden West will feel the pinch as home buyers take out fewer mortgages, or pull back on the maniacal refinancing that has characterized the past few years. On the deposit side of the balance sheet, Golden’s chintzy but predictable savings accounts, money market funds and certificates of deposit have thrived as a safe harbor for investors scared off by the past few years of turmoil on Wall Street. But with the markets finally showing some pop, CD rates that barely match inflation are significantly less attractive.

    The Sandlers are the first to acknowledge the challenge of topping themselves. “We’ve got a money machine, but what are the new competitive threats?” says Herb, apologizing for a nagging cold that, not surprisingly, struck him and Marion at the same time. “We developed a business with extraordinarily high returns and virtually no risk. How do we make it better?”

    As it is, the company is already among the lowest-cost operators in the business, with expenses that run at less than 1% of assets, compared with a thrift industry average 2.3 times that. The savings are both large and symbolic, such as the lack of a receptionist at the company’s penthouse headquarters overlooking Oakland’s scenic Lake Merritt. (Visitors announce their arrival by a phone in the lobby.)

    Rather than being cheapskates, the Sandlers spend money to make money. “The issue of costs isn’t counting paper clips, it’s how you spend money,” says Herb. “You should spend to enhance productivity and efficiency and to improve customer service.”

    The company’s expenses of $721 million for 2003, for instance, beat the record-high outlay of $601 million in 2002. But the money was well spent, since it’s gone toward a new loan-origination system, Web sites and an upgraded communications network for the branches. Despite Marion’s indulgence of hiring name architects (including Walt Disney Concert Hall designer Frank Gehry), the branches are otherwise models of efficiency with a single-minded focus on vacuuming up deposits. Over the past decade the company has increased deposits at a 10.5% compound rate without the benefit of an acquisition, almost twice the rate of all banks and thrifts.

    “My ideal customer opens a $50,000 account, and I don’t see them for six months,” says Marion.

    At the branch in Alhambra, for instance, a mostly Asian suburb of Los Angeles, Marion hired a feng shui consultant to ensure that the branch was in harmony with its surroundings. But aside from the New Age flakiness, the emphasis is on selling various savings accounts and CDs, with rates displayed prominently on a menu board in the front window. To stay competitive with the half-dozen or so competing banks, branch manager Jason Jung takes regular surveys of his competitors.

    “It’s like a chess game,” says Jung. “We’ve got a lot of people who are rate-shoppers.”

    Meanwhile, on the other side of the balance sheet, the Sandlers have seemingly been able to defy logic with record closings of adjustable-rate mortgages at a time when consumers have been frantically locking in the low rates on 30-year fixed mortgages. For 2003 the company lent out $36 billion in new mortgages, a 35% increase from the year before. Of that amount, 94% were ARMs. Instead of flipping the loans to Fannie Mae and Freddie Mac, the Sandlers retain all but the fixed-rate loans for their own portfolio, providing a margin of around 3% on the loans, instead of the 0.25% servicing fee left over on loans that are sold off. But despite the fact that the Sandlers don’t use or trust the ubiquitous credit-scoring algorithms that have become the lingua franca among lenders, Golden West’s bum loan rate is just 0.5% of assets, compared with 0.7% for the thrift industry.

    “Obviously we’re doing something right,” says Herb of his disdain for credit scoring, which he contends is too dependent on borrowing histories accumulated during a relatively benign economy with strong housing prices.

    The danger of holding so much paper in your own portfolio is that the short rates Golden West pays its depositors and on its borrowings could fall out of alignment with the long rates it charges on mortgages. This was the dilemma that forced the original deregulation of the thrift industry in the 1980s, and ultimately the S&L fiasco that ended up costing taxpayers and innocent thrifts $160 billion. (So far, grouses Herb, the crisis caused Golden West’s deposit insurance bill to balloon by $450 million.) Golden West mitigates the risk by keeping fixed-rate loans to a minimum.

    Many ARM lenders reset their rates annually, often according to indexes related to U.S. Treasury rates and the London Inter Bank Offered Rate or the 11th District Cost of Funds Index. But in their tradition of breaking ranks with the rest of the industry, the Sandlers decided to take fate into their own hands a few years ago after they saw the institutions that make up the 11th District diversifying away from deposit-gathering and changing the makeup of the index. So they invented their own Cost of Savings Index, set according to the rates Golden West pays on its deposits. Golden West resets its ARMs on a monthly, lagging basis, which allows it to expand margins when rates are falling, as they have been in the past few years.

    “The point is to have loan rates match up to the costs of funds on the other side,” says Russell Kettell, president and chief financial officer and one of the two executives set to succeed the Sandlers.

    After talking with the Sandlers, though, you come away with the impression that, for all their financial accomplishments, they’re more interested in using the business as a means to the higher end of political and philanthropic pursuits. Die-hard liberal Democrats, the Sandlers support various do-gooder causes and activist outfits, as well as medical research for the asthma that afflicts Marion. The couple provided seed money alongside hedge fund scold George Soros to start up Clinton apparatchik John Podesta’s Center for American Progress, a liberal version of the Heritage Foundation, and is the primary sugar daddy behind UC, Berkeley’s Human Rights Center.

    “If our dreams come true, we’ll give every last dollar away,” smiles Herb. Everything but the sweaters.

    It is to laugh.

  24. GuppyNblue says:

    Just a small point regarding the Forbes article. Over the weekend I watched as CBS’ 60 Minutes laid the blame on Wall Street and of course gave congress a pass. They basically painted a picture of an intentionally complicated system in which Wall Street was able to hide their risky behavior. This may have some truth to it but you have to wonder where all this wisdom was a few years ago. Anyway, amongst their accusations; “these complex financial instruments were actually designed by mathematicians and physicists, who used algorithms and computer models to reconstitute the unreliable loans in a way that was supposed to eliminate most of the risk”.
    Now according to the Forbes article “the Sandlers don’t use [my emphasis] or trust the ubiquitous credit-scoring algorithms that have become the lingua franca among lenders”. And yet the results were the same for both. Keep trying CBS.

« Front Page | To Top
« | »