Political link to the mortgage crisis

March 24, 2008 12:00:00 AM PDT
How much did big corporate money influence politicians, as the sub-prime mortgage industry took off, before the bubble burst? In 2005, homeowners were getting offers every week to refinance their homes or take out a mortgage, with payments that in the fine print, would balloon a few years later. The President and congress were not on top of those shaky mortgage practices. The President was talking up home ownership.

Back in 2005, as he started his second term in office, the President promised what he called an ownership society.

"Why should ownership be confined only to rich people?" said President Bush.

At the time, mortgage companies were offering deals that proved too be too good to be true. The secondary financial markets took those shaking mortgages, bundled them, and selling them again.

Federal Chairman Alan Greenspan warned that innovations in the mortgage market could backfire, but few were listening. Now the Center for Responsive Politics is suggesting at least part of the reason why.

It has published a list of the top political contributors to Washington lawmakers. Securities and investment firms are second only to lawyers.

The list of those investment firms that contributed reads like a whose who of wall street, including Goldman Sachs, Morgan Stanley, Merrill Lynch and Bear Stearns which is getting considerable help from the government to keep it from going bankrupt.

The top two recipients of that financial industry money are Hillary Clinton and Barack Obama, in that order. A look at the top eight recipients, all them this year's top presidential candidates.

"Doesn't surprise me at all, but I wouldn't read it the way most people read it as if there is some sort of evil corruption going on," said Professor Lawrence Lessig from Stanford Law School.

Lessig sits on the board of the Sunlight Foundation a watch dog group tracing the influence of money in politics.

"And what we've got to do is get beyond this picture of we've got evil congressmen who are corrupting the public interest to a recognition that we've got an idiotic system for selecting people to congress or to the senate or pick the president," said Lessig.

Lessig says it's the system.

The chairman of the Senate and House Committees that were charged with overseeing the Financial Industry, they get more campaign money from that industry than from any other.

And from Lessig's point of view, it doesn't matter if you're talking mortgage crisis or global warming or any other problem.

"Money controls the agenda in Washington and until we can remove money as the single most important driver of that agenda and allow congressmen to make choices on the basis of what they think is right and what they think is wrong, we're not going to get any progress here at all," said Lessig.

Lessig is working on a project to change the way lawmakers are elected with publically financed public elections.

If you want to find out more or get involved in that project. Follow the links below.

Lessig is part of a project to change congress, here is their link:

He's also on the board of the sunlight foundation:

One of the best sites for tracking congressional and presidential contributions is this one run by the Center for Responsive Politics:

Taking action: