April 20th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today demanded that the Senate “scrap the Dodd financial takeover bill and start over with real reform of the government institutions that caused the crisis to begin with.”

“In short, the Dodd bill does nothing at all to prevent another crisis from occurring, and Senators should be wary about following Dodd off the cliff,” Wilson said, adding, “Dodd is asking many of his colleagues to stand for election defending his legislation following the same recipe that caused his own career to go down in flames.”

“Meanwhile, Dodd himself is not willing to run on this nonsense. The voters of Connecticut have rejected Dodd’s corruption. He’s not representing them. To this day, he is representing Fannie Mae and Freddie Mac. He is representing the ill-conceived social policy of pushing loans on those who cannot afford them despite unacceptable rates of default.”

Wilson continued, “In sum, he is representing government control of the entire financial system under the false premise that tighter control will better manage the unintended consequences of foolish government policies.”

Wilson said Dodd bears a “great deal of responsibility” for causing the financial crisis. “Dodd has no business leading the Senate’s effort to ‘reform’ the financial system. He is the most corrupt Senator in U.S. history who protected Fannie Mae and Freddie Mac from being reined in while the housing bubble was inflated, and who personally benefited for being a shill for banks with VIP treatment in his loan from Countrywide.”

In a recent oped, Wilson wrote that “Putting Chris Dodd in charge of writing the financial ‘reform’ bill is like calling in Don Corleone to write an anti-crime bill. To expect anything but a whitewash that protects the real criminals is naïve at best.”

Wilson said the legislation itself proves it: “The Dodd bill does not even mention Fannie or Freddie, government entities that misrepresented the quality of mortgage-backed securities to investors.”

“Instead, it leaves the government in charge of the GSE’s, expands the powers of the Federal Reserve which printed the money that fueled the housing bubble, does nothing to rein in the Federal Housing Administration that degraded credit quality by lowering down payments, and leaves in place the Community Investment Act regulations that strong-armed banks to give out loans to lower income Americans who could not pay them back in the first place,” Wilson explained.

“The only right thing to do in this instance is to scrap Dodd’s plan and to start over with a plan to sell of Fannie and Freddie piece by piece, to bring transparency to the Federal Reserve and to restrict their easy money policy, restore prudent lending standards, and repeal the Community Reinvestment act once and for all,” 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.

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April 16th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today condemned Barack Obama’s nominee for Judge to the Ninth Circuit Court of Appeals, Goodwin Liu, for his views on the Commerce Clause of the Constitution, saying “Liu leaves the door open for regulation of just about every aspect of life.”

In questioning from Senator Dianne Feinstein, who said the Supreme Court had taken a “constraining view” of the Commerce Clause and asked what Liu thought was the extent and scope of Congress’ power to regulate commerce.

Liu outlined what he viewed as the current doctrine adopted by the Supreme Court, saying, “the Court articulated the doctrine that the activity being regulated has to be economic in nature but it stopped short of saying that that is an absolute requirement” before the Court could determine if the activity or “class of activities” had a “substantial effect” on interstate commerce.

Liu promised to uphold that doctrine, saying, “that is the doctrine as I understand it, and I would faithfully apply that doctrine to any case that came before me as a judge.”

“In other words,” said Wilson, “Goodwin Liu is saying that an activity need not be economic in order for it to have a ‘substantial effect’ on interstate commerce, leaving the door open for just about every human activity to be regulated by Congress, even if it in reality has no bearing on interstate commerce.”

ALG Counsel Nathan Mehrens described Liu’s view of the Commerce Clause is “expansive,” adding that Liu had “a total lack of a philosophy that applies either the original intent or meaning of the Constitution.”

Mehrens said that the Supreme Court’s expansive view of Commerce Clause over the past century “has given rise to regulation in areas that have no relation at all to commerce, in everything from education to environmental policy.”

Wilson also criticized Liu for his previous controversial writings, which he said “were confirmed by today’s testimony. Liu acknowledged that if a ‘welfare right’ is created by Congress, ‘eligibility requirements’ of that ‘right’ could be heard by the courts.”

“In short, if something is subsidized by Congress, an individual could sue that they have a right to that ‘entitlement,’” said Wilson.

In a 2008 Stanford Law Review article, “Rethinking Constitutional Welfare Rights,” Liu discussed at length the concept of judicially-imposed welfare rights. In this context welfare rights mean a societal consensus that persons possess a right to certain goods and services, a consensus of “how a society understands its obligations of mutual provision.”

According to the article, Liu wrote that, “judicial recognition of welfare rights is best conceived as an act of interpreting the shared understandings of particular welfare goods as they are manifested in our institutions, laws, and evolving social practices.”

Liu explained what this would look like in context of his actual decision-making as a judge, “Some day yet, the Court may be presented with an opportunity to recognize a fundamental right to education or housing or medical care. But the recognition, if it comes, will not come as a moral or philosophical epiphany but as an interpretation and consolidation of the values we have gradually internalized as a society.”

Wilson said that “by saying that ‘eligibility requirements’ of an expansive ‘welfare right’ such as the recently enacted health care legislation can indeed be heard by the courts, Liu is opening the door for the national health care takeover to become a single-payer system by judicial fiat.”

Senator Jeff Sessions criticized Liu’s consistency, and questioned whether he had contradicted himself in his testimony, comparing his statements to his previous promotion of his book in promoting his book, Keeping Faith with the Constitution for the American Constitution Society.

Then, Liu suggested in a podcast that “What we mean by fidelity is that the Constitution should be interpreted in ways that adapt its principles and its text to the challenges and conditions of our society in every succeeding generation,” as reported by National Review Online.

However, during testimony, Liu said his writings and books “would have no bearing on my role as a judge” and that “in any generation, the interpretation of the Constitution has to be guided by not what makes people happy, rather it has to be guided by the faithful application of the text, the underlying principles and the precedents that have accrued.”

Sessions said, “I’m going to try to fairly evaluate that answer, but I don’t think your writings reflect that… Is what you’re saying today consistent with what you said then?”

Wilson said “They are not at all consistent. What is the point of writings that urge judges to act in a certain way if now he claims those writings would have no bearing on his conduct as a judge?”

Wilson concluded, “Goodwin Liu is being dishonest with the Judiciary Committee, and he should be rejected for once again attempting to conceal his most controversial views from the scrutiny of the Senate by claiming that they now have no relation to how he as a judge will rule when the writings are about how a judge ought to rule.”

Attachments:

Goodwin Liu, Americans for Limited Government Nominee Alert, March 2010.

“Wonderland: The World According to Goodwin Liu,” Bill Wilson, March 24th, 2010.

“Why Goodwin Liu is Important,” ALG News Editorial, April 12th, 2010.

“Liu Guilty by Omission,” Robert Romano, April 8th, 2010.

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April 14^th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today praised the American people’s participation in tea party rallies nationwide, calling them “true patriots standing up for constitutional limited government, liberty, and fiscal responsibility.”

“The American people are not waiting for leaders in Washington to save them from an expansive, centralized government. They are once again taking matters into their own hands,” Wilson said.

Local tea parties have events scheduled across the nation in towns and cities. There will also be a national rally in Washington, DC today.

Wilson said the tea party movement was a “very important development in American politics that has already reshaped the political landscape.”

“Without the tea parties and, more broadly, without the American people standing up and speaking out against the unsustainable growth of government, the government takeovers of health care, housing, the financial system, the pension system, and the energy sector, most of the Obama agenda would already be implemented,” Wilson explained.

“The American people are now all that stands in the way between what remains of our once-great constitutional system and a tyranny of government dependents,” Wilson added, encouraging Americans to take to the streets to protest what he termed was an “unaccountable, command-and-control government takeover of almost every aspect of the people’s lives.”

The tea party movement was originally inspired by CNBC commentator Rick Santelli’s commentary on the floor of the Chicago Mercantile Exchange on February 19^th, 2009. Then, Santelli spoke out against the government foreclosure bailouts, where homeowners who paid their bills on time and in full were being asked to also assume the costs of their neighbors who were delinquent in their payments and not credit-worthy to begin with.

Wilson concluded, “There’s only so much the American people will put up with. In the past two years, government has expanded in ways never thought possible under our constitutional system. It started with the bailouts, but where it ends is anyone’s guess. What is clear, and is evidenced by the tea parties today, is that the American people are standing against tyranny.”

April 14th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today decried what he called “Barack Obama’s job-loss recovery.”

Today, Federal Reserve Chairman Ben Bernanke testified that although the economy was recovering from the financial crisis, “a significant amount of time will be required to restore the 8-1/2 million jobs that were lost during the past two years.”

According to Bernanke that “a recovery in economic activity appears to have begun in the second half of last year.”

“However,” said Wilson, “since July of 2009, unemployment has increased by 543 thousand and underemployment has jumped by 826 thousand.”

According to the Bureau of Labor Statistics, in July 2009, headline unemployment stood at 9.360 percent (14.462 million) and U-6 underemployment stood at 16.3 percent (25.184 million).

Today, it has risen to 9.749 percent (15.005 million) and 16.9 percent (26.011 million), respectively.

Said Wilson, “Obama has not even given the American people a jobless recovery. He has given them a job-loss recovery.”

“Unfortunately for the American people, he has done nothing to enable a speedy recovery in the employment situation, and instead has only placed heavy burdens on the economy and American families,” Wilson added.

Bernanke warned that government spending was out of control: “maintaining the confidence of the public and financial markets requires that policymakers move decisively to set the federal budget on a trajectory toward sustainable fiscal balance.”

Obama economic advisor Paul Volcker has proposed a new national sales tax to address steepening federal budget deficits. Wilson called it a “jobs killer.”

Wilson said that instead Congress must slash entitlement spending, saying that “No amount of new taxes, which will destroy jobs, will be able to sustain the unsustainable: the unbridled growth of federal welfare spending.”

In its ten-year budget plan, the White House projects that the national debt will grow by $10.6 trillion. Wilson said that “will mean less opportunities for private job creation, as government sucks much-needed resources from the economy to finance its unsustainable trajectory that threatens to forever wreck the nation’s finances.”

“Obama is recklessly driving up the national debt, destroying the dollar, taking over health care, taking over the financial system, proposing to raise taxes and punish wealth creation, artificially drive up the cost of energy with a punitive tax on carbon emissions, and all the while continuing the easy money monetary policies that caused the financial crisis to begin with,” Wilson concluded.

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April 13th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today urged the Senate Foreign Relations Committee to reject the nomination of Mari Del Carmen Aponte for the post of Ambassador to El Salvador.

The committee will be considering Aponte’s nomination in a hearing at 2:15PM.

In Wilson’s letter to the committee, he wrote, “Aponte’s nomination is permanently tainted by her 1990’s close, personal relationship with a man whom U.S. counterintelligence considered a Cuban DGI agent, according to a confidential intelligence memo that was obtained by Insight magazine.”

The letter continues, “Aponte’s failure to cooperate with a 1994 FBI investigation into the allegations, and her refusal to participate in a polygraph test after some of the answers to FBI questions showed minor inconsistencies serve as automatic disqualifiers for this nominee.”

An Insight on the News story detailed Aponte’s alleged recruitment by the Cuban spy agency, including receiving a loan which was never paid back that originated from Cuban sources. According to the a confidential intelligence memo delivered to Senate Foreign Relations Committee Chairman Jesse Helms and obtained by Insight, “When the FBI questioned her about her involvement with Cuban intelligence, she reportedly refused to cooperate, saying that since she was not seeking a permanent White House position she was not subject to a background check.”

After she failed to take a lie detector test in 1994, Aponte withdrew herself from consideration of Ambassador to the Dominican Republic after committee questions about her suitability continued.

Yesterday Wilson had said Aponte is “unsuitable to represent the United States in El Salvador or anywhere else in the world. Aponte’s subsequent resume also casts considerable questions about where her loyalties lie, and she should be rejected by the Senate Foreign Relations Committee,” said Wilson.

From 2001 to 2004, Aponte served as the Executive Director of the Puerto Rico Federal Affairs Administration. In this cabinet-level role, she represented the governor of Puerto Rico in the United States, where she, on at least one occasion, referred to Puerto Rico as a “country,” and her office issued at least one press release calling her office in D.C. an “embassy.”

In his letter Wilson stated, “While [Aponte’s] allegiance toward an independent Puerto Rico is part of the legitimate political discussion on the island, this allegiance combined with her previous unresolved ties to the Cuban spy agency show that she cannot be trusted to serve the interests of the United States.”

In a statement, Wilson concluded, “It is critical to the security of the United States that potential loyalty risks do not escape scrutiny by the Senate Foreign Relations Committee when they are nominated, especially for high posts such as ambassador.”

Attachments:

Letter to the Senate Foreign Relations Committee, April 13th, 2010

“Aponte: A Loyalty Risk for Ambassador?”, Richard McCarty for ALG News, March 8th, 2010

ALG Nominee Alert, Mari Del Carmen Aponte, March 2010.

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April 12th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today urged the Senate Foreign Relations Committee to reject the nomination of Mari Del Carmen Aponte for the post of Ambassador to El Salvador.

Bill Wilson, President of Americans for Limited Government called Aponte, “unsuitable to represent the United States in El Salvador or anywhere else in the world.”

Aponte’s past relationship with someone U.S. counterintelligence officials identified as a Cuban intelligence agent led to her withdrawing from consideration as the Ambassador for the Dominican Republic in 1998 under a cloud of suspicion.

An Insight on the News story detailed Aponte’s alleged recruitment by the Cuban spy agency, including receiving a loan which was never paid back that originated from Cuban sources. Most significantly, Aponte refused at the time to allow the U.S. Federal Bureau of Investigation to give her a polygraph test to clear her name, and withdrew from consideration after Committee questions about her suitability continued.

“Aponte’s subsequent resume also casts considerable questions about where her loyalties lie, and she should be rejected by the Senate Foreign Relations Committee,” said Wilson.

From 2001 to 2004, Aponte served as the Executive Director of the Puerto Rico Federal Affairs Administration. In this cabinet-level role, she represented the governor of Puerto Rico in the United States, where she, on at least one occasion, referred to Puerto Rico as a “country,” and her office issued at least one press release calling her office in D.C. an “embassy.”

Bill Wilson concluded that, “It is astounding that anyone who has refused to explain close, personal ties to Castro’s spy network and declared Puerto Rico’s independence from the United States would be nominated to represent our nation in El Salvador which has been a lynchpin nation in Central America.

“The Senate Foreign Relations Committee should cut this nomination off at the knees by voting no on confirmation, and failing that, placing holds to demand a recorded, up-or-down vote.”

The Senate Foreign Relations Committee will be considering the Aponte nomination on Tuesday, April 13th.

Attachments:

“Aponte: A Loyalty Risk for Ambassador?”, Richard McCarty for ALG News, March 8th, 2010

ALG Nominee Alert, Mari Del Carmen Aponte, March 2010.

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April 8th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today urged Representative Scott Garrett (NJ-CD5) to demand the House majority convene hearings to investigate contradictory “guarantees” made by the federal government after Fannie Mae and Freddie Mac were nationalized in 2008.

According to Wilson’s letter, “Somebody has lied, and he must be held accountable for misleading the American people.”

The letter also urged Garrett to recommend that Barack Obama appoint a special prosecutor to investigate the matter.

In a letter to Garrett, Secretary Timothy Geithner wrote that the “corporate debt of the GSEs is not the same as U.S. Treasuries, nor should it be considered sovereign debt.” The letter continued, “By statute, all obligations and securities issued by the GSEs must include a statement that makes clear that such obligations and securities are not guaranteed by the United States and do not constitute a debt or obligation of the United States.”

But, wrote Wilson, “Unfortunately, Secretary Geithner’s letter directly contradicts then-Federal Housing Finance Agency director James Lockhart’s 2008 Congressional testimony.”

Lockhart had testified that “the conservatorship and the access to credit from the U.S. Treasury provide an explicit guarantee to existing and future debt holders of Fannie Mae and Freddie Mac,” as reported by Bloomberg News.

At the time, the agency distinguished between “an explicit guarantee” and the “full faith and credit of the United States”, and Lockhart clarified that he meant “an effective guarantee because there’s $100 billion backing their equity provided by the U.S. Treasury…That does give them effectively a guarantee of the U.S. government.”

Wilson’s letter continued, “Adding complexity to this issue, according to the New York Federal Reserve’s website, the Federal Reserve is not guaranteeing the securities nor Fannie Mae and Freddie Mac by extension either with its purchase of $1.25 trillion of mortgage-backed securities from investors.”

According to the website: “Assets purchased under this program are fully guaranteed as to principal and interest by Fannie Mae, Freddie Mac, and Ginnie Mae, so the Federal Reserve’s exposure to the credit risk of the underlying mortgages is minimal.”

In the letter, Wilson wrote, “either then-Director Lockhart was misleading Congress in 2008, Secretary Geithner is misleading Congress today, or the Federal Reserve really is guaranteeing the GSEs’ debts and obligations.”

In a statement, Wilson said that “All these contradictory ‘guarantees’ do not add up, and the only way to get to bottom of it is for Congress to investigate the matter immediately. Are taxpayers guaranteeing Fannie and Freddie? Is the Federal Reserve? If neither, then who is backing up the GSEs’ $1.6 trillion in debt and $4.7 trillion in mortgage-backed securities?”

Wilson wrote that “Either taxpayers are backing up Fannie Mae and Freddie Mac, or they are not. If the Federal Reserve is not vouching for the GSEs’ debts and obligations, then only taxpayers can be.”

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

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April 7th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today condemned Treasury Secretary Timothy Geithner for excluding Fannie Mae and Freddie Mac’s $6.3 trillion balance sheet, including $1.6 trillion in debt, from the current $12.6 trillion national debt despite 2008 testimony from a federal agency that the government was providing “an explicit guarantee” to the mortgage giants.

“Somebody has lied,” Wilson said, adding that “they must be held accountable for misleading the American people.”

In a letter to Congressman Scott Garrett, Geithner wrote that the “corporate debt of the GSEs is not the same as U.S. Treasuries, nor should it be considered sovereign debt.”

The letter continued, “By statute, all obligations and securities issued by the GSEs must include a statement that makes clear that such obligations and securities are not guaranteed by the United States and do not constitute a debt or obligation of the United States.”

In the same letter, Geithner wrote, the “Treasury is committed to supporting the GSEs while in conservatorship and to ensuring that the GSEs have sufficient capital to meet their debt obligations and honor their guarantees.”

Fannie Mae and Freddie Mac were placed under conservatorship by Congress in 2008 under the administration of the newly-created Federal Housing Finance Agency (FHFA). According to the agency’s website, “As of June 2008, the combined debt and obligations of these GSEs totaled $6.6 trillion.”

But that was not added to the national debt, despite the FHFA director James Lockhart’s Congressional testimony that “the conservatorship and the access to credit from the U.S. Treasury provide an explicit guarantee to existing and future debt holders of Fannie Mae and Freddie Mac,” as reported by Bloomberg News.

At the time, the agency distinguished between “an explicit guarantee” and the “full faith and credit of the United States”, and Lockhart clarified that he meant “an effective guarantee because there’s $100 billion backing their equity provided by the U.S. Treasury…That does give them effectively a guarantee of the U.S. government.”

“Geithner’s and Lockhart’s statements to Congress are in direct conflict with each other. One of them has lied to Congress. It is vital that the American people find out which one,” Wilson declared.

Wilson said the Treasury “is trying to have it both ways; they want to tell markets that they are guaranteeing Fannie and Freddie and tell taxpayers that they are not.”

Wilson also blasted what he termed “financial system takeover” legislation for not addressing the problems surrounding the GSE’s. “Fannie and Freddie underwrote almost every new mortgage in the country and sold their worthless securities all over the world, but neither Chris Dodd’s legislation in the Senate nor Barney Frank’s companion House legislation would do a thing about it,” Wilson said.

Wilson said “The Obama Administration wants to assume the power of controlling the mortgage market without assuming the risk of putting the $6.3 trillion mortgage giants on-budget.”

“The Treasury cannot have it both ways, and it only has two options at this stage: either the underlying assets of Fannie and Freddie are sold to privately-held institutions, or they are in effect guaranteed by taxpayers, as Lockhart stated,” Wilson added.

Those assets included, according to Bloomberg News, $4.7 trillion in mortgage-backed securities (MBS). Of that, $1.5 trillion had been sold to foreign investors, as reported by the New York Times.

Since that time, the Federal Reserve has purchased $1.25 trillion of the MBS, although they have not disclosed which securities it has purchased. According to the Federal Reserve, the securities are purchased at “Current face value of the securities, which is the remaining principal balance of the underlying mortgages.”

Wilson wants to know if foreign nations got bailed out, saying the exclusivity of the program was “cause for concern.” According to the NY Fed, “Initially, the investment managers will trade only with primary dealers who are eligible to transact directly with the Federal Reserve Bank of New York. Primary dealers are encouraged to submit offers for themselves and for their customers.”

Wilson noted that several of the primary dealers are foreign institutions. The so-called Troubled Asset Relief Program explicitly prohibited that foreign central banks or institutions owned by foreign governments from participating in the Treasury-administered program to purchase MBS, but Wilson said there was no such restriction on the Fed-administered MBS purchase program.

“It’s a legitimate question: Did the Fed buy back the mortgage-backed securities from the foreign investors, including China, Japan, and other sovereign entities?” Wilson asked.

According to the NY Fed’s website, the Federal Reserve is not guaranteeing the securities nor Fannie Mae and Freddie Mac by extension either: “Assets purchased under this program are fully guaranteed as to principal and interest by Fannie Mae, Freddie Mac, and Ginnie Mae, so the Federal Reserve’s exposure to the credit risk of the underlying mortgages is minimal.”

Wilson said since Fannie and Freddie depends on the Treasury to keep up with its obligations, and the Federal Reserve will not guarantee it, “that can only mean taxpayers are the guarantors of Fannie Mae and Freddie Mac.”

“Essentially, the Federal Reserve printed $1.25 trillion to buy back the mortgage-backed securities from investors. So, if the Federal Reserve is not backing up Fannie and Freddie’s worthless securities, then it bought those securities back with the implicit if not the explicit backing of U.S. taxpayers, just as they were sold,” Wilson concluded.

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

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April 6th, 2010, Fairfax, VA—Obama Administration officials within the Labor Department were urged to not rescindunion disclosure rules in a letter released today from Americans for Limited Government (ALG).

ALG President William Wilson in the April 5 letter to the Labor Department’s Office of Labor-Management Standards blasted the Agency stating, “Rather than working feverishly to turn union financial transparency into a financial black hole the Department should get back to work investigating and bringing to justice those union leaders who steal from their members.”

The letter was prompted by Labor Department proposed rulemaking that would change two major Bush Administration labor disclosure requirements. Under the new Obama rules, labor unions with trust accounts would be allowed to hide both income and expenditures from those trusts from scrutiny by members, media and outside watchdog groups creating a whole new definition of “blind trust”.

The other major change would allow “intermediary” unions like the role the Alabama Education Association plays for the National Education Association, to not disclose their income or expenditures creating a dead end for those reporting on how the teachers unions influence the nation’s education policies.

Wilson concluded by stating, “When union leaders working with their former employees, who now function as Obama officials at the U.S. Department of Labor, eliminate the ability of the people to track the expenditure and collection of hundreds of millions of dollars by those very union leaders, it smells like the sewer of corruption that only DC politics can create.”

The Department of Labor has been charged with overseeing the financial activities of organized labor since the 1959 passage of the John F. Kennedy sponsored Labor-Management Reporting and Disclosure Act (LMRDA). A law that was designed to provide for full disclosure of union finances. During the Bush Administration more than 900 union leaders were successfully prosecuted, with many as a direct result of financial reporting requirements.

A copy of the original letter to the Department of Labor is available from ALG at http://www.getliberty.org/files/T-1 Rescission NPRM ALG Comment 04_05_10.pdf.

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