I’ve been following the race for VA-Gov; in particular, I’ve been interested in Terry McAuliffe’s candidacy and doing whatever I can to make sure that he doesn’t become the nominee. You can look at my previous diaries for a smattering of reasons I think McAuliffe would be the absolute worst thing that could happen to the renewed and invigorated VA Democratic Party, but I’m not sure I’ve made the case to everyone. Some suggest that I’m raising issues that have long been dispensed with. Others say that no matter how long the path of fetid dung trailing behind McAuliffe, we need to witness him actually making the mess before we can convict him.
The mainstream coverage of McAuliffe kinda-sorta parallels that reasoning: in almost every article profiling the man, he comes off as a happy-go-lucky backslapper that just happens to have been associated with all sorts of vile miscreants. As their misdeeds brought shame to the miscreants, Terry McAuliffe skipped away whistling a merry Irish drinking song. More often than not, his next companion was more corrupt than the last.
But Terry McAuliffe, the Ferris Buhler of politics, always walks away scot-free.
{flip}
But our past has a way of catching up with us, doesn’t it? You can fool a lot of people a lot of the time, but eventually things catch up with you. I’m thinking that is what we are witnessing in slow-motion as this campaign unwinds.
Until he decided to run, Terry McAuliffe was able to fly beneath the radar to a certain extent. He wasn’t asking to be elected to anything; the press knew him mostly as a glad-hander... They looked into his business affairs to a certain extent, but without the immediacy of a campaign, there wasn’t any real reason to do a cavity search on the man...
But as a candidate? I’m not sure McAuliffe knows what’s coming.
Here is one possibility. This widely discussed article by Matt Taibbi points the way:
[Cassano was the leader of the AIG unit that bankrupted the company and may throw the entire world’s economy into a depression. Ed.]
Cassano's outrageous gamble wouldn't have been possible had he not had the good fortune to take over AIGFP just as Sen. Phil Gramm — a grinning, laissez-faire ideologue from Texas — had finished engineering the most dramatic deregulation of the financial industry since Emperor Hien Tsung invented paper money in 806 A.D. For years, Washington had kept a watchful eye on the nation's banks. Ever since the Great Depression, commercial banks — those that kept money on deposit for individuals and businesses — had not been allowed to double as investment banks, which raise money by issuing and selling securities. The Glass-Steagall Act, passed during the Depression, also prevented banks of any kind from getting into the insurance business.
But in the late Nineties, a few years before Cassano took over AIGFP, all that changed. The Democrats, tired of getting slaughtered in the fundraising arena by Republicans, decided to throw off their old reliance on unions and interest groups and become more "business-friendly." Wall Street responded by flooding Washington with money, buying allies in both parties. In the 10-year period beginning in 1998, financial companies spent $1.7 billion on federal campaign contributions and another $3.4 billion on lobbyists. They quickly got what they paid for. In 1999, Gramm co-sponsored a bill that repealed key aspects of the Glass-Steagall Act, smoothing the way for the creation of financial megafirms like Citigroup. The move did away with the built-in protections afforded by smaller banks. In the old days, a local banker knew the people whose loans were on his balance sheet: He wasn't going to give a million-dollar mortgage to a homeless meth addict, since he would have to keep that loan on his books. But a giant merged bank might write that loan and then sell it off to some fool in China, and who cared?
The very next year, Gramm compounded the problem by writing a sweeping new law called the Commodity Futures Modernization Act that made it impossible to regulate credit swaps as either gambling or securities. Commercial banks — which, thanks to Gramm, were now competing directly with investment banks for customers — were driven to buy credit swaps to loosen capital in search of higher yields. "By ruling that credit-default swaps were not gaming and not a security, the way was cleared for the growth of the market," said Eric Dinallo, head of the New York State Insurance Department.
OK, so we’re talking about the late nineties to the early part of this decade...
Hmmm...
What was Terry McAuliffe doing at this time?
From 1980 to 1981, McAuliffe served as Deputy Treasurer and Director of Finance at the Democratic National Committee. From 1985 to 1987, McAuliffe served as finance director of the Democratic Congressional Campaign Committee. During the 1988 presidential campaign, he served as finance chairman for Dick Gephardt. During the 1996 election cycle, he served as national finance chairman and then national co-chairman of the Clinton-Gore re-election committee. In 1997, he was chairman of the 53rd Presidential Inaugural Committee. In 1999, he was chairman of the White House Millennium Celebration. In 2000, McAuliffe chaired a tribute to outgoing President Bill Clinton, which set a fundraising record for a single event, raising $26.3 million. The same year, he chaired the Democratic National Convention in Los Angeles.
Huh. He was raising money. For the wildly successful Democrats of that era... You know... The Democrats that went from controlling the White House and both houses of Congress in 1994 to... well... uhm... controlling nothing, but eating fantastically well at fundraiser after fundraiser if they were lucky enough to remain in office.
I’m not writing to attack Terry for his stewardship of the party from 2001 until 2005... that’s a post for another day...
But I do want to ask this: It appears that just as the Democratic Party turned its backs on unions, activist groups and its traditional base – in favor of large corporate donations – well... Congress all of a sudden got religion on the "orthodoxy" of corporate deregulation. What I want to know – and I’ve emailed the McAuliffe campaign for comment – is this: How much money did the Democratic Party raise from AIG, Bear Stearns, Chase, Citigroup, Merrill Lynch, Goldman Sachs, JP Morgan, Solomon Smith-Barney, Morgan Stanley-Dean Witter and the rest of the Wall Street crew during this critical period? How much did Republicans raise? And in the previous decade – say from 1985 until 1995 – how much did each party raise from the same players? Did Terry McAuliffe’s decision to value money over longstanding Democratic princples contribute to the mess we’ve got ourselves in today?
Just askin’. And lest you think this is just another baseless smear by innuendo, let me say this: Terry McAuliffe had best get this answer straight soon. Because I’m the friendly guy in the race. I promise you: Bob McDonnell and the RNC have entire excavating teams digging into McAuliffe’s dirt.
So yeah, that’s my friendly advice for Team Terry.
And for the rest of my fellow Virginians? Well, I suggest you make sure these questions get answered before we end up saddled with a candidate that Taliban Bob kicks around like a three-legged puppy in the general election.