MA-Sen: Scott Brown held Bank of America stock while saving big banks $19 billion

[ProSense]

MA-Sen: Scott Brown held Bank of America stock while saving big banks $19 billion

by Chris Bowers

Massachusetts Senator Scott Brown has not moved his money:

According to personal financial disclosure records from 2009 and 2010, Senator Brown has owned up to $50,000 of stock in Bank of America, which received $45 billion of federal money from the Troubled Asset Relief Program, the government bailout program. He also owns up to $100,000 in General Electric stock, which issued over $70 billion in debt guaranteed by the American government during the financial crisis while its massive banking wing shuddered on its subprime mortgage bets.

But during the final phase of last year's debate over Wall Street reform legislation, Brown demanded critical breaks for big banks as the price of his support, which was critical for the bills passage.

Those breaks included the elimination of a costly tax on too-big-to-fail banks and a special exemption in risky securities trading for the nation's largest banks.

But Brown refused to back the entire Wall Street overhaul unless big banks were allowed to devote up to 3 percent of their total capital to sub-companies entirely devoted to securities trading. That legislative carve-out posed tremendous financial benefits to big financial companies, including Bank of America and GE, while permitting them to take big risks that taxpayers could eventually be forced to absorb.

We're not talking chump change here. Brown's hostage-taking on the financial reform bill saved the big banks $19 billion:

Scott Brown's threat to vote against the financial regulatory overhaul bill unless Democrats met his demands yesterday succeeded in killing the part of the bill Brown had opposed: a $19 billion tax on big banks and hedge funds.

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[Tarheel_Dem]

1. Let's hope Elizabeth can exploit this for the good of MA, and the rest of us. (nt)

[beac]

2. Well, well, well..... K&R. n/t

[karynnj]

3. Rather hypocritical that he jumped out the day after the RW Sweitzer was on 60 minutes.

to lead legislation on legislators and inside trading. One would think you would not do that unless you had a very clean house yourself.

The fact is that it is really hard to actually prove that someone legislates to help his own pocketbook. You would expect people (in general - not legislators) to invest in things they believe in. This is why legislators should not be buying or selling stock and the portfolios they have should be in blind trusts. But, though this is a stronger connection than many of Sweitzer's examples, it may not be an action done to put more money in his pocket - though some of the alternatives are just as bad.

You could make the case that he did it to get WS support and money for his campaign (a common accusation) or I think the real truth is that his action fit his simplistic ideology - that any taxes are bad - even if the tax was to set up a $19 billion fund to deal with any future to big to fail financial institution. It apparently escapes him that his action means that he set things up so that the US taxpayer again will pay for the failure - through some or all of the $19 billion recovered TARP money.

So, Brown either legislated:
- for personal gain
- for campaign contributions
OR
- because he things the taxpayer should pay if banks make bad decisions.

The last is not unethical or illegal, but it is a statement of his values.

How much do you want to bet that THIS story stays out of the Boston papers?