Catastrophe - Dick Morris [108]
Translation: As more banks and mortgages fail, PennyMac stands to make a killing.
Kurland and his team have even boasted that PennyMac can teach the government a thing or two about how to solve the housing and financial crisis, calling their operation a “role model.”365
Talk about chutzpah.
Too bad they weren’t thinking about becoming role models when they were luring in all those people who bought untenable mortgages during their tenure at Countrywide.
12
PAY TO PLAY
No-Bid Contracts Exchanged for Campaign Cash
In many states, there seems to be a very close correlation between companies that are awarded huge no-bid contracts by governors and those that contribute big bucks to the campaigns of those same governors.
It’s happening all over.
It’s called pay to play, and it means just what it sounds like: if you want to play in the highly lucrative state contract system, you have to pay.
That means making campaign contributions—big ones. And, for the most part, it means corruption.
According to Craig Holman, a public interest lobbyist for Public Citizen, “pay-to-play” is an “act of official corruption or the appearance of public corruption. Even where there is no agreement between contractor and government official, large donations from people who win contracts raise an appearance of a problem with the public.”366
And that appearance of a problem is spreading through statehouses all over the country.
Take a look at Pennsylvania, where Democratic governor Edward Rendell awarded a no-bid contract to advise the Pennsylvania Housing Finance Authority to David Rubin, the head of CDR Financial Products, after Rubin made $40,000 in campaign contributions to Rendell.367
Rubin has been in the news lately. It seems his company was awarded another no-bid contract in New Mexico—for $1.5 million, after making a $100,000 contribution to Governor Bill Richardson’s campaign committees.368
Rendell, Richardson, and Rubin all deny any wrongdoing. But Rubin’s company is under investigation by a federal grand jury in New Mexico to determine whether there was, in fact, a pay-to-play arrangement.
We’ve all watched the drama in Illinois, where the wacky former governor, Rod Blagojevich, allegedly tried to sell Barack Obama’s old Senate seat. He also granted a $300,000 state contract to suggest minority contractors for state highway projects.369 Guess who got that one? Roland Burris, the guy Blago named to Obama’s Senate seat, perhaps because Burris had given Blagojevich $20,000 in campaign donations.370
And it’s not just governors who are involved in these questionable contracts; the practice continues throughout the food chain of elected officials, from congressmen to attorney generals to mayors.
Several years ago, the Department of Homeland Security awarded a no-bid contract to the American Association of Airport Executives, its Transportation Security Clearinghouse division, and Daon, an Irish biotech company. Tom Ridge, the former director of Homeland Security, was a director of Daon. The contract, potentially worth hundreds of millions of dollars, assigned the groups the task of issuing secure identification cards to millions of transportation workers.
But it wasn’t Ridge who pushed for the contract. It was Congressman Hal Rogers (D-KY) who sponsored an earmark for the project. Not everyone shared Rogers’s glowing view of the American Association of Airline Executives. According to the New York Times, questions were raised by critics of the contract about “how the association, with little experience in high-technology secure identifications and biometrics, could handle such a task.”371
How did Rogers get interested in the issue? Maybe it happened when he and his wife went on a free trip to Ireland that was cosponsored by the