May 20th, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson today thanked Senate Republicans for blocking the Dodd financial takeover bill yesterday and urged them to “hold the line against a government intervention into the economy that, once enacted, will never end.”

“Senate Republicans deserve the thanks of the American people for standing in the way of legislation that has not addressed the root, government causes of the financial crisis, and instead will institutionalize them for all time,” Wilson said.

Wilson appealed to Senators Susan Collins and Olympia Snowe to join the filibuster. “The American people are not getting a good deal out of this bill from Senators Snowe and Collins. The people are being asked to give the government more power to take over or bail out companies, levy taxes and fees, and monitor every financial transaction in the country, large and small, all without Congressional approval or the possibility for judicial review.”

“In return, the American people are not getting anything. The bill fails to rein in the government causes of the financial crisis that Senators Snowe and Collins have the most direct control over. The American people deserve better,” Wilson said.

“I believe Senators Snowe and Collins can and should deliver more for the American people. They can and should be insisting on the reform of Fannie Mae and Freddie Mac, and end to perpetual bailouts and government takeovers in this legislation that institutionalize ‘too big to fail’ in law.”

“Senators Snowe and Collins both supported Senator John McCain’s amendment that would have ended government control of the mortgage market, and they have the power to demand that this amendment and others ending bailouts and ‘too big to fail’ be adopted. They would be heroes,” Wilson noted.

“Even Senators Dick Durbin and Chris Dodd admit that Fannie Mae and Freddie Mac need to be reformed, and yet they voted against Senator McCain’s very reasonable amendment. To date, they still refuse to do anything to rein in government control of the mortgage market, and Senators Snowe and Collins should tell them that’s not good enough,” Wilson said.

Yesterday on the floor of the Senate, Senator Dick Durbin admitted to Senator Johnny Isakson that government failed in its administration of the housing and mortgage industry: “I will concede that this, what you pointed to as a fundamental flaw, a mistake that was made, there was a presumption made, that owning a home was such a valuable American ideal… but, we went too far, we extended the opportunity for home ownership to people who weren’t ready.”

Durbin continued, “And we believed that if you pushed them to the limit of how much they could pay, that the home would appreciate in value, their incomes would go up and everything would work out. And it turned out that gamble was wrong… on some people. And certainly, Fannie Mae and Freddie Mac as the ultimate guarantors of mortgages were part of that. So, there is a governmental element here, I don’t question that for a moment. So, certainly some blame lies there…”

Senator Dodd too admitted government’s failure to Isakson: “We in Congress collectively did not get job done with Fannie and Freddie… I acknowledge that.”

Neither Durbin nor Dodd thought that the time was right for Congress to do anything about Fannie and Freddie, however. Dodd told Isakson, “I totally agree with your premise [that Fannie and Freddie need to be reformed], the question is that as Chairman of this committee I didn’t know how… we fix this thing at this point… I would also plead that the failure to deal with that in this bill ought not to be justification for walking away…”

“Senators Dodd and Durbin are passing the buck to the American people, to future generations to deal with the government mismanagement of housing finance that caused the crisis. They know government failed, and yet they refuse to do a thing about it,” Wilson declared.

“Senators Snowe and Collins must not be complicit in throwing away the American people’s best chance to rein in the government-caused institution of ‘too big to fail’, the government-controlled mortgage market that created the crisis, and the government-administered bailouts that will never end under the Dodd bill,” Wilson said.

“Only Senators Snowe and Collins can stop the government establishment of unlimited authority to monitor all financial activity in the country, levy taxes, and seize companies, all without Congressional approval of the possibility of judicial appeal. The choice is theirs,” Wilson concluded.

Attachments:

“’Down a Rabbit Hole:’ The Threat Posed by the Dodd Bill to the Private Sector,” May 13th, 2010, Americans for Limited Government.

“Big Brother is Watching You: The Threat Posed by the Dodd Bill to Privacy,” May 5th, 2010.

Letter to the U.S. Senate, ALG President Bill Wilson, April 26th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 20th, 2010, Fairfax, VA—Bill Wilson, President of Americans for Limited Government (ALG), will be available to comment on the cloture vote for the Dodd financial takeover bill. Today, the Senate voted to invoke cloture on the legislation 60 to 40.

Audio Actuality 1:
www.getliberty.org/files/Dodd_Pass _ Bill_Statement_1.mp3

“The Senate of the United States today took a giant step to creating a permanent bailout fund for Wall Street. All this does is institutionalize the same bad behavior that got us into the mess we are now.”

Audio Actuality 2:
www.getliberty.org/files/Dodd_Pass _ Bill_Statement_2.mp3

“The American people can be certain of two things as a result of this vote. First, they can be sure that there will be more bailouts and greater dislocation of the markets. Second, they can depend on higher taxes, and greater burden on them and their families, all thanks to the U.S. Senate, Chris Dodd, Barney Frank, Nancy Pelosi, and the rest of the unindicted co-conspirators in the financial meltdown.”

The Dodd Financial Services Bill institutionalizes many of the same issues that the American people rejected during the original financial services bailout. ALG has been a leading voice in opposition to the Dodd Financial Bill, and has become a trusted source for analysis from an independent, limited government perspective.

Interview Availability: To schedule Bill Wilson for a radio or television interview, please contact Rebekah Rast at 703-383-0880, for print interviews please contact Richard Manning at 703-383-0880.

###

May 19th, 2010, Fairfax, VA—A Wall Street Journal editorial published today confirms that an unlimited bailout authority is still contained in the Dodd financial takeover bill.

According to the editorial, “Gus Sauter is the Chief Investment Officer at Vanguard Group, the mutual fund giant that manages more than $1 trillion of investor savings. Mr. Sauter told us this week that, even after recent amendments, the Senate bill still allows the Federal Deposit Insurance Corporation to play favorites among the creditors of a failing institution undergoing FDIC resolution.”

The editorial continues, “Specifically, the FDIC could provide a 100% bailout to whichever of these creditors it favors, while imposing severe losses on other investors who bought the exact same bonds.”

Americans for Limited Government President Bill Wilson today said, “The American people have not been told the truth about what’s in the Dodd bill. The bailouts and government takeovers are still included, and it is up to the Senate freeze this legislation before it moves any closer to passage.”

Wilson continued, “This is exactly what Americans for Limited Government has been saying, that despite the Dodd-Shelby amendment, the bill still contains bailouts. We thank the Wall Street Journal for calling it like it is.”

Wilson said he hoped that Senate Republicans would filibuster the legislation “and exhibit the courage of their convictions. They know this bill will be a bad deal for the American people. If they now rise to stand with the people, the people will stand with them.”

ALG has updated its comprehensive backgrounder, “Down a Rabbit Hole,” on the dangers the legislation represents and the shortcomings of various amendments, including the Dodd-Shelby amendment that passed 93 to 5.

According the ALG backgrounder, “Although the Dodd-Shelby amendment provides that the assessments may be charged to the bailed out or seized company to recoup the costs of the bailout or takeover, they may not be imposed if such payments were ‘necessary to initiate and continue operations essential to the implementation of the receivership or any bridge financial company.’”

The backgrounder continues, “Those funds would be drawn from FDIC-levied assessments on the $50 billion or greater companies. This feature necessarily provides for bailouts, and makes the fund unlimited and permanent, because as it is used up, the FDIC can just charge the banks more assessments without any Congressional approval to bail out or seize more companies.”

“Nothing has substantively changed. Despite the efforts of Senate Republicans, the orderly liquidation fund still has not been removed. After all the amendments voted on, the government can still seize any institution it wants, and then keep it, reorganize it, or redistribute it without any Congressional approval,” Wilson had said after ALG conducted an analysis of the amendments.

The Dodd bill, even with the Dodd-Shelby amendment, creates an unlimited “orderly liquidation fund” financed by assessments on approximately 60 bank holding and insurance companies that ALG says will be paid for by any American that uses the financial system through higher costs of transactions, premiums, and bank fees.

The Senate could vote today on cloture for the Dodd bill. Wilson said “time is running out for the American people to rein in the unbridled expansion of federal power to intervene in the economy as never before.”

Attachments:

“’Down a Rabbit Hole:’ The Threat Posed by the Dodd Bill to the Private Sector,” Updated May 13th, 2010, Americans for Limited Government.

Letter to the U.S. Senate, ALG President Bill Wilson, April 26th, 2010.

“Big Brother is Watching You: The Threat Posed by the Dodd Bill to Privacy,” May 5th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 18th, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson today urged Senate Republicans to filibuster the Dodd financial takeover bill, saying, “once enacted, this legislation will be very difficult to undo. The only option left for Senators is to just say no.”

“The Dodd bill will take over the nation’s entire financial sector, institutionalize bailouts for all time, monitor individual finances, and levy unlimited assessments on the American people, all without any votes in Congress nor any recourse to federal courts once company assets are seized,” Wilson declared.

“Only Senate Republicans can stop this legislation before it is too late and it cannot be undone,” Wilson warned, adding, “Harry Reid and Chris Dodd, with this financial takeover, have turned the Senate from the ‘cooling saucer’ into the boiling kettle pot. In just one short month, the so-called ‘most deliberative body’ has considered and will now be voting on the unbridled expansion of federal power to intervene in the economy as never before.”

Yesterday, Senate Majority Leader Harry Reid filed for cloture on the legislation, with a vote expected Wednesday, according to the Washington Post.

Wilson said that his core objections to the bill have not been addressed, including reining in what he called an “unlimited authority to bail out or outright seize companies deemed ‘too risky’.” He also objected to the establishment of an Office of Financial Research (OFR) which he said “would be empowered to gather information on every financial transaction, large and small, in the entire country.”

ALG has published two summaries on the legislation, the first detailing the bailout and government takeover powers in the bill, and the second outlining the threat posed to individual privacy through the OFR.

Wilson said the legislation “started out in exactly the wrong place. The Dodd bill does not address the root, government causes of the financial crisis that blew up the housing bubble in the first place,” Wilson added, pointing to the failure of the legislation to address Fannie Mae, Freddie Mac, the Federal Reserve, the Federal Housing Administration, and the Department of Housing and Urban Development’s Community Reinvestment Act regulations.

“Government policies weakened underwriting standards, lowered down payments on mortgages, and forced banks to give loans to lower-income Americans while simultaneously providing the capital via low-interest loans, which flooded the system and created a housing boom,” Wilson explained.

Wilson said the bill “is as much about deflecting blame away from government for its role in the crisis as it is an egregious power grab. Now, government says it just needs more of our private, financial information to monitor ‘systemic risk’ when it did not act on the clear evidence that was widely available at the time demonstrating its own policies were fueling the housing bubble,” Wilson said.

“The government also argues that it needs a more rapid ‘resolution’ authority when the bailouts to date have only perpetuated the doctrine of ‘too big to fail,’” Wilson added, concluding, “This bill takes all of the worst lessons of the financial crisis and institutionalizes them for all time, and only Senate Republicans can stop it.”

Attachments:

“’Down a Rabbit Hole:’ The Threat Posed by the Dodd Bill to the Private Sector,” April 30th, 2010, Americans for Limited Government.

“Big Brother is Watching You: The Threat Posed by the Dodd Bill to Privacy,” May 5th, 2010.

Letter to the U.S. Senate, ALG President Bill Wilson, April 26th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 13th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today blasted the Dodd-Shelby amendment to the Dodd financial takeover bill that passed last week “which leaves in place the authority for unlimited government takeovers and bailouts paid for by the American people through assessments levied upon financial institutions.”

ALG today updated its comprehensive backgrounder, “Down a Rabbit Hole,” on the dangers the legislation represents.

“Nothing has substantively changed. Despite the efforts of Senate Republicans, the orderly liquidation fund still has not been removed. After all the amendments voted on, the government can still seize any institution it wants, and then keep it, reorganize it, or redistribute it without any Congressional approval,” Wilson declared, urging Senate Republicans to filibuster the measure.

The Dodd bill, even with the Dodd-Shelby amendment, creates an unlimited “orderly liquidation fund” financed by assessments on approximately 60 bank holding and insurance companies that Wilson said “will be paid for by any American that uses the financial system through higher costs of transactions, bank fees, and the like.”

According the ALG backgrounder, “Although the Dodd-Shelby amendment provides that the assessments may be charged to the bailed out or seized company to recoup the costs of the bailout or takeover, they may not be imposed if such payments were ‘necessary to initiate and continue operations essential to the implementation of the receivership or any bridge financial company.’”

The backgrounder continues, “Those funds would be drawn from FDIC-levied assessments on the $50 billion or greater companies. This feature necessarily provides for bailouts, and makes the fund unlimited and permanent, because as it is used up, the FDIC can just charge the banks more assessments without any Congressional approval to bail out or seize more companies.”

“The American people have not been told the truth about amendments being voted upon in the Dodd bill. The bailouts and government takeovers are still included,” said Wilson.

The Dodd-Shelby amendment overwhelmingly passed the Senate last week 93 to 5 under the premise that it would end bailouts.

The backgrounder also describes one of the mechanisms for bailing out a company under a new name in the Dodd bill: “Conceivably, when the FDIC seizes a company, it could use the Fund to fully pay back all outstanding liabilities to the company’s creditors, turn the company into a bridge financial company, fully recapitalize it with financing from the Fund, and then sell the capital stock to those very same creditors that were bailed with the Fund.”

The backgrounder continues, “That’s a bailout, and neither the Dodd-Lincoln substitute amendment, the Dodd-Shelby amendment, nor the Boxer amendment would remove any of these provisions.”

Previously Wilson had criticized so-called “taxpayer protections” that were included in Boxer Amendment: “The Boxer amendment is meaningless, because the allegation is not that the American people will pay for these bailouts and takeovers via income and other taxes. It is that the American people will pay for these government takeovers and bailouts through higher costs on financial transactions and other fees levied by the financial institutions.”

Wilson had said Boxer’s amendment to require that the assets of companies put into receivership are “liquidated” was also “meaningless, because under the orderly liquidation fund, the FDIC has unlimited capacity to either sell seized companies to the Treasury, to reorganize them, or to be redistribute their assets to politically-favored entities.”

On April 29th, Senator Dodd assured his colleagues that the bill did not contain bailouts, but that he would accept an amendment from Boxer affirming his position. Senator Boxer on April 30th, as she submitted her amendment, agreed with Dodd that her amendment was unnecessary, but that she was offering it anyway.

Wilson asked, “If the Dodd bill does not contain bailouts, then why did Boxer submit an additional amendment to affirm that position? Why did Senators Shelby and Dodd submit an amendment that claimed to end bailouts?”

According to the preamble of the Dodd-Shelby amendment, it would “end ‘too big to fail’ [and] protect the American taxpayer by ending bailouts.”

Wilson said, “Provisions in this bill that create an unlimited ‘orderly liquidation fund’ and the creation of ‘bridge financial companies’ give the government unlimited authority and resources to seize companies and either nationalize, bail out, or redistribute their assets to favored political classes, in spite of the many hollow amendments that have been voted on.”

“The amendments to the Dodd bill will not end bailouts and government takeovers. Instead they will be institutionalized for all time. The Senate must defeat this horrendous legislation.” Wilson concluded.

Attachments:

“’Down a Rabbit Hole:’ The Threat Posed by the Dodd Bill to the Private Sector,” Updated May 13th, 2010, Americans for Limited Government.

Letter to the U.S. Senate, ALG President Bill Wilson, April 26th, 2010.

“Big Brother is Watching You: The Threat Posed by the Dodd Bill to Privacy,” May 5th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 11th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today denounced the U.S. Senate for failing to adopt an amendment to the Dodd financial takeover bill that would have authorized a full audit of the Federal Reserve including its dealings with foreign governments.

“On Sunday, the Fed decided to bail out Europe with a credit line after the Fed Chairman Bernanke promised Congress that it would not do so,” Wilson said.

“The Fed and European Central Bank are essentially guaranteeing the bond sales of bankrupt countries. Without the Vitter amendment, the Federal Reserve will continue to operate in secret and with impunity, endangering the financial system, weakening the dollar, and subsidizing risky bets in the markets,” Wilson explained.

“Making matters worse, the Senate is telling the American people that they do not have a right to know about this and other Fed transactions with foreign central banks and governments.”

An amendment offered by Senator David Vitter (R-LA) would have lifted restrictions on the Government Accountability Office that pursuant to 31 USCA §714(b) prohibits it from auditing the Federal Reserve’s transactions with foreign central bank and governments, its deliberations, decisions, or actions on monetary policy matters, its discount window operations, the reserves of member banks, securities credit, interest on deposits, open market operations and transactions.

“The Vitter amendment was an anti-bailout amendment, and the Senate just said no to stopping bailouts or even conducting any oversight of them. Instead, the Senate just issued the Fed a blank check that it does not even want to know about what the central bank is up to. The American people should not be surprised, then, when the Fed bails out more foreign countries that cannot pay their own debts,” Wilson warned.

The Vitter amendment failed by a vote of 62 to 37.

Yesterday, Wilson had denounced Federal Reserve Chairman Bernanke for going back on his word that the Federal Reserve would not be participating in any foreign bailouts after the central bank announced it was extending a credit line to foreign central banks, including the European Central Bank, to bolster lending in near-bankrupt countries like Greece, Portugal, Ireland and others.

At the time, on February 24th, Bernanke told the House of Representatives, “we have no plans whatsoever to be involved in any foreign bailouts or anything of that sort.”

“Ben Bernanke misled Congress about the Fed’s European bailout, and now the U.S. Senate is covering up for him,” Wilson said.

Wilsons has previously noted that the Federal Reserve was a “principal actor” in causing the financial crisis: “By keeping interest rates too low for too long, the Fed accommodated the inflation of the housing bubble throughout the 1990’s and 2000’s by pumping easy money into the system.”

Wilson cited research by Stanford economist John Taylor who in a recent Wall Street Journal column wrote, “the Fed’s target for the federal-funds interest rate was well below what the Taylor rule would call for in 2002-2005. By this measure the interest rate was too low for too long, reducing borrowing costs and accelerating the housing boom. The deviation from the Taylor rule, which had characterized good monetary policy during the previous two decades, was the largest since the turbulent 1970s.”

“Clearly, the Dodd financial bill is a farce, and will not even be addressing one of the root causes of the financial crisis. Without a full audit of the Federal Reserve, Congress cannot perform its constitutional role of oversight of the central bank. The Senate just voted to keep its blinders on, and to bow at the altar of central planning,” Wilson concluded.

Interview Availability: Please contact Rebekah Rast at (703)383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 10th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today condemned Federal Reserve Chairman Ben Bernanke for “lying about the Fed participating in a bailout of Europe in response to the rapidly escalating sovereign debt crisis,” and called for a Congressional investigation into the Fed, including the passage of a complete audit of the central bank.

“Fed Chairman Ben Bernanke assured the Congress that the Fed had no plans to bail out Greece and other European countries,” Wilson said, “and now here we are, and the Fed and the ECB are basically printing money to purchase worthless junk bonds from nations that are so bankrupt that nobody will buy their debt anymore.”

In February, Congressman Ron Paul (R-TX), who proposed and had passed a House version of a Federal Reserve audit, questioned Fed Chairman Ben Bernanke about whether the central bank was planning to engage in a bailout of Greece.

At the time, Bernanke said, “we have no plans whatsoever to be involved in any foreign bailouts or anything of that sort.”

According to the Wall Street Journal, “the U.S. Federal Reserve said Sunday that it would revive an emergency lending program used during the financial crisis. The Fed will ship billions of dollars overseas through foreign central banks, including the ECB, so they can, in turn, lend the money out to banks in their home countries in need of dollar funding.”

Wilson said, “Now we know Bernanke lied when he said the Fed would not bail out Europe. Yesterday, the Federal Reserve agreed to send billions of dollars to European foreign central banks, including the European Central Bank. Clearly there were contingency plans in place that Bernanke did not disclose to Congress.”

The Fed program comes as the European Central Bank (ECB) announced a program to purchase European government bonds, and the European Union and International Monetary Fund announced a wider €750 billion bailout for the entire continent.

Wilson urged Congress to investigate the Fed Chairman “to find out when the bailout of Europe was planned” and to complete plans to audit the Federal Reserve. He also denounced Senator Bernie Sanders (I-VT) for weakening a plan to conduct a full audit of the Federal Reserve as an amendment to the Dodd financial takeover bill.

“Bernie Sanders is a sellout,” Wilson declared, “His weakened amendment will still shield from public oversight the Federal Reserve’s transactions with foreign central banks and governments, including yesterday’s announced Fed participation in the trillion-dollar European bailout.”

Under current law, the Government Accountability Office, according to 31 USCA §714(b), cannot audit and exempts from public oversight the following activities of the Federal Reserve:

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items.

The original Sanders amendment would have lifted these restrictions. “Under the weakened Sanders amendment the European bailout is a transaction that will be protected from any public oversight and accountability,” Wilson explained.

“The Fed is bailing out Europe, and the American people have a right to know everything about it. The Senate must adopt the original Sanders amendment to completely audit the Federal Reserve, and Congress as a whole must now investigate how widespread these foreign bailouts by the central bank really are. Now, more than ever, the Fed must be completely audited,” Wilson concluded.

Attachments:

Original Sanders Amendment to the Dodd Bill, SA 3738, sponsored by Senator Bernie Sanders, and cosponsored by Senators Russ Feingold, Jim DeMint, Patrick Leahy, John McCain, Ron Wyden, Chuck Grassley, Byron Dorgan, David Vitter, Barbara Boxer, Sam Brownback, James Risch, Roger Wicker, Lindsay Graham, Orrin Hatch, Mike Crapo, Robert Bennett, and Jim Bunning.

Interview Availability: Please contact Rebekah Rast at (703)383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 10th, 2010, Fairfax, VA—Bill Wilson, President of Americans for Limited Government (ALG), will be available to comment on the potential nomination of Solicitor General Elena Kagan to the U.S. Supreme Court.

“Elena Kagan is an unknown quantity with nothing in her record to recommend her to the highest court in the land. She’s never been a judge, and devoid of any examples, Senators will be hard-pressed to determine exactly what her judicial philosophy is,” Wilson said.

“President Bush’s nomination of Harriet Miers’ was withdrawn for the same exact reason, and rightly so,” Wilson added.

ALG has been a leading voice in opposition to the Appeals Court nomination of Goodwin Liu and other high profile radical nominees to the federal courts, and has become a trusted source for analysis from an independent, limited government perspective.

To schedule Bill Wilson for a radio or television interview, please contact Rebekah Rast at 703-383-0880, for print interviews, please contact Richard Manning at 703-383-0880.

###

Suddenly, The New York Times is exorcised and agitated about potential conflicts of interest within the Food and Drug Administration (FDA’s) committee structure. Some of the scientists serving in policy advisory positions could be unduly motivated to make recommendations on the basis of their own financial interests, a recent editorial warns. Stipulations are already in place to guard against conflicts that may open the way to decisions that are not in the public interest.

Ideally, there should no waivers but agency has made some recent progress, editorial points out. Whereas the FDA had been granting waivers to more than 15 percent of the members, it is now granting waivers to less than 5 percent. Although The Times articulates a legitimate concern, it appears to be feigned and not real.

Even as it huffs and puffs about potential conflicts, the editorial neglects to mention that the FDA has set up a panel on menthol with the aim of outlawing it in cigarettes. The panel is stacked with people who have a clear bias. In many instances they would stand to profit from the prohibition that is being entertained. This raises some questions.

If The Times has such faith in its editorial stance, why the sleight of hand? If there’s a bias at work here against certain products in deference to others, shouldn’t this find its way in the editorial? It would appear the outrage is highly selective and agenda driven.

“An important panel set up by the FDA has a near majority of its voting members getting paid by special interests who have billions of dollars riding on the outcome of the committee’s ultimate decision,” Bill Wilson, President of Americans for Limited Government, observed. “This is ludicrous.”

“The Obama administration continues its rhetoric about a balanced, objective approach to science – an approach that sets aside agendas and emphasizes science – but we keep finding that special interests trump scientific findings,” he continued. “On this advisory pane, the heavy influence of big pharmaceutical companies is overwhelming. Pharmaceutical companies stand to make huge profits if the committee takes certain actions like banning menthol.”

• Jack Henningfeld a voting member of the committee is a consultant to GlaxoSmithKline the maker of Nicorette gum who would stand to benefit financially from further restrictions on tobacco products

• Neil L. Benowitz was Pfizer consultant which makes the drug Chantix that aids people who want to quit smoking. Benowitz has also worked for GlaxoSmithKline and Nabi Pharmaceuticals

• Dorothy Hatsukami received grant support <http://phx.corporate-ir.net/phoenix.zhtml?c=100445&p=irol-newsArticle&ID=1048442&highlight> from Nabi Pharmaceuticals to study their nicotine vaccine

• The head TPSAC, Jonathan Samet, also received grants from GlaxoSmithKline and the organization he headed was funded by two different pharmaceutical companies.

“Remarkably, The Times could have inserted a few lines from its own reporting to provide readers with some perspective on the tobacco panel,” noted Kevin Mooney, the TimesCheck editor. “They are entitled to take whatever editorial stance they want. But when they go out of their way to avoid mentioning and highlighting conflicts that bedevil their policy goals, it gives good cause to wonder about what is omitted in the other reports.”

Attachments:

FDA Conflicts are Wrong Except Where they Advance New York Times’ Agenda, Kevin Mooney, May 7th, 2010:
http://timescheck.com/2010/05/07/fda-conflicts-are-wrong-except-where-they-advance-nyt-agenda/

Experts, Conflicts and the F.D.A., New York Times, May 4th, 2010: http://www.nytimes.com/2010/05/05/opinion/05wed3.html

F.D.A. to Examine Menthol Cigarettes, New York Times, March 29th, 2010: http://www.nytimes.com/2010/03/30/business/30tobacco.html

###

“The McCain amendment is the very definition of leadership,” Wilson declared. “It is an example of a mature adult examining a problem, and offering the only responsible solution. The McCain amendment simultaneously addresses many of the root causes of the crisis and takes taxpayers off the hook for the ongoing bailout of Fannie and Freddie, which has already cost $126 billion.”

Wilson appealed to Senators, “This is the line in the sand. If you are for the McCain amendment, you truly are standing with American taxpayers in addressing the root causes of the crisis and steadfastly against the unlimited bailout of the Fannie and Freddie. To be against it is, on the other hand, is to declare yourself a looter and unindicted co-conspirator in the theft of America.”

Wilson outlined the policies pursued by the GSE’s that he said contributed to the crisis, citing research by former Chief Credit Officer of Fannie Mae, Edward Pinto. Those include taking on some $1.835 trillion in higher-risk mortgages and mortgage-backed securities just before they were nationalized. This included high risk loans in whole loan form, most of which, $1.646 trillion, were GSE-issued mortgage-backed securities, and $189 billion of subprime and Alt-A private mortgage-backed securities.

According to Pinto, because of the implicit backing of taxpayers, Fannie and Freddie securities were automatically given AAA credit ratings. Because of that shielding from scrutiny, Fannie and Freddie were able to misrepresent the quality of mortgages that underlined those securities.

Wilson added, “Because of the implicit backing of taxpayers, Fannie and Freddie crafted a marketing plan that enabled them to sell some $4.7 trillion of mortgage-backed securities, $1.5 trillion of which were sold overseas to investors, as reported by the New York Times.”

“By promising a higher rate of return than treasuries, but with the same risk associated with a taxpayer guarantee, the sales flooded the GSE’s throughout the housing bubble. As more securities were sold, Fannie and Freddie bought more mortgages and bundled them into securities. As a direct result, Fannie and Freddie were able to acquire about half of all mortgages as of July 2008,” Wilson explained.

According to the Wall Street Journal, the McCain amendment “mandates that the current government conservatorship of Fan and Fred will end within 30 months. In the meantime, the companies will have to reduce their mortgage portfolios by 10% each year” and if the conservatorship failed the GSE’s “would then go into receivership and be liquidated.”

If the GSE’s can be rendered solvent and “can survive on their own, they would have three years before the expiration of their federal charters, during which time they would have new operating restrictions” including reducing “mortgage assets held on their books by nearly 50% within two years and raise their capital standards.”

The McCain amendment would also “repeal the affordable housing goals previously legislated for Fan and Fred and which contributed to their terrible mortgage bets,” reports the Journal. According to Pinto, from 1992 onward, the Department of Housing and Urban Development (HUD) loosened lending standards by imposing “affordable housing goals” on Fannie Mae and Freddie Mac, adopted “Fair Lending Best Practices” requiring low-income lending, and promulgated new Community Reinvestment Act “regulations applicable to all insured banks, in particular a change from a qualitative standard to a quantitative.”

Also, under the amendment, as reported by the Journal, the GSE’s would “have to start paying state and local sales taxes, lose their exemption from full registration at the Securities and Exchange Commission when they issue securities, and start paying fees to repay the taxpayer for the value of federal guarantees.”

The amendment would also reinstate the $400 billion limit of assistance from the government and “for as long as they are in federal conservatorship or receivership, they would have to be included in the federal budget.”

Wilson said that including the GSE’s on the federal budget was “essential to preserving creditworthiness of the United States.”

Wilson concluded, “The only responsible act for Congress is to rein in and unwind the government control over Fannie Mae and Freddie Mac, to restore honesty to the nation’s balance sheet, and require that taxpayers are paid back for the ongoing bailout of the GSE’s that has cost more than $126 billion since it began in 2008. Senator McCain’s amendment accomplishes these goals.”

Attachments:

SA 3839, McCain amendment to the Dodd bill, May 5th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###