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The cronies, czars & corruptocrats at Obama’s first state dinner

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By Michelle Malkin  •  November 25, 2009 12:15 PM

If you want breathless, celebrity tabloid treatment of the first Obama White House state dinner — who wore what, who came with whom, what they ate — go somewhere else. This is a closer look at the cronies, czars & corruptocrats whom Obama wined and dined last night.

- SEIU president/top White House visitor Andy Stern and his lieutenant Anna Burger made the cut. You can learn more about Burger’s shady staff here and refresh your memories on Big Labor’s investment in Obama here. Hope they enjoyed the gala. Stern and Burger have bigger headaches on their plate.

- Bill Richardson and his wife. His Commerce nomination went down in flames, but he has crawled up from under the Obama bus. AG Eric Holder killed the federal probe into Richardson’s pay-to-play dealings. Like Tom Daschle, this Beltway fixture is a human toe fungus. He won’t go away.

- White House legal counsel Bob Bauer and chief Fox-basher Anita Dunn. “The Silencer” and his wife are certainly enjoying the trappings of power. Now, be quiet about it or they’ll crush you.

- Corruptocrat Democrat Sen. Chris Dodd and his wife. The Senator from Countrywide is plunging in the polls over his ethical baggage, but Obama won’t leave him behind.

- Corruptocrat energy czar Carol Browner and husband Tom Downey. She’s the transparency-undermining, document-deleting bureaucrat who has warned auto industry execs to “put nothing in writing, ever.” He’s the disgraced former congressman-turned-lobbyist. From Chapter 5 of Culture of Corruption:

While Team Obama pays lip service to breaking old Washington lobbying habits, Browner and Downey represent the prototypical influence-peddling power couple. In 2006, the pair teamed up on behalf of infamous Dubai Ports World— – the United Arab Emirate-owned company that unsuccessfully sought to take over operations of six major U.S. ports. Browner was a , who was a principal in Clinton pal and former Secretary of State Madeline Albright’s the “international consulting firm,” of her old Clinton pal, and former secretary of state, Madeline Albright. and Browner and Downey, whose own firm lobbied for Dubai Ports World, met with New York Senator. Charles Schumer to try and quell congressional opposition. All deny that lobbying took place. It was “for informational purposes,” an Albright Group spokeswoman told the Wall Street Journal. Yet Downey was named by Washingtonian magazine as one of Washington’s top 50 lobbyists.’

His clients have included foreign governments, drug and insurance companies, and major energy companies including Chevron and the Standard Renewable Energy Group, which will no doubt come under the regulatory purview of his broadly-empowered “energy czar” wife. Obama’s stringent lobbying rules do not apply to spouses. The White House blithely claims that “administration officials will recuse themselves from any issue involving a spouse,” but how exactly can Browner recuse herself from the very core duties of her job, which include targeting carbon emissions, enacting onerous global warming reduction policies, and regulating the very industry her husband represented for years?

This is particularly troubling given Browner’s husband’s past. Conflict of interest and abuse of power seem to be Downey’s specialty. He was a Democrat congressman in New York for nearly two decades before losing his seat during the House banking scandal. Downey racked up overdrafts on 151 checks worth $83,000 at the House bank while his wife held a patronage job as an auditor in the House office that ran the House bank. An undercover ABC News investigation in 1990 showed him lolling on a beach during a congressional junket to Barbados. Reflecting on Downey’s defeat in 1992 and the loss of his long-ago image as an upstart reformer, one of Downey’s congressional colleagues told the New York Times: “You live in Washington, you just get sucked into Washington.””
Thanks to Barack Obama, two more old crony players have been sucked back into the Beltway swamp to wield their joint power and influence.

- White House social secretary and Chicago crony Desiree Rogers and her ex-husband Rogers. I spotlight them in Chapter 2 of Culture of Corruption and reported on them last month in “No Bundler Left Behind:”

Every corner of the Obama administration is stuffed with crony moneybags. Take the First Lady’s social secretary, Desiree Rogers. More than a party planner, she’s a fund-raising machine in her own right. According to left-wing watchdog Public Citizen, Rogers bundled more than $200,000 for Obama and contributed $28,500 to Democrat committees. Rogers’ ex-husband, John W. Rogers, Jr., chief executive of multi-billion-dollar Ariel Capital Management, played basketball with Michelle O’s brother, Craig Robinson, at Princeton. Mr. Rogers also served as a campaign finance bundler for Team Obama – and hung with President Obama in the White House on Super Bowl Sunday.

An indignant White House says this is about “friendship,” not influence-peddling. But as Obama himself noted in 2007: “It is no coincidence that the best bundlers are often granted the greatest access, and access is power in Washington.”

Indeed, the Obama White House policy can be summed up in four words. No Bundler Left Behind.

– Democrat Rep. Linda Sanchez. She’s not gonna let a little House ethics investigation into an alleged collusion scheme get in the way of partying it up at the White House!

- Subprime queen Penny Pritzker and Marty Nesbitt, Chicago pals of Obama. Guess the invites made up for losing the Olympics. Also on the dinner list: Tom Donilon, Pritzker’s attorney.

From Chapter 6 of Culture of Corruption:

…Obama’s close hometown crony, campaign finance chief, and senior adviser Penny Pritzker was head of Superior Bank of Chicago, a subprime specialist that went bust in 2001, leaving more than 1,400 people stripped of their savings after bank officials falsified profit reports.

Pritzer’s lawyer at O’Melveny & Myers, Tom Donilon, is now deputy national security adviser. He earned just shy of $4 million representing her and other high-profile meltdown clients including, yep, Citigroup and Goldman Sachs.

- White House senior advisor Valerie Jarrett. Natch. Wonder if the Stanford alumni blowback came up at dinner? Jarrett’s high-powered Chicago bagwomen Tina Tchen was also on the list.

- White House senior advisor David Axelrod and wife, SEIU/ACORN/WFP “air traffic controller” Patrick Gaspard, and corruptocrat AG Eric Holder and wife, population control freak/stone-walling science czar John Holdren and wife. Makes quite a table, eh?

- Lobbyist Hunter Biden, son of Joe. See Chapter 3 of Culture of Corruption for all the dirty details. A taste:

“Average Joe” Biden wants you to believe he hangs with the regular guys at Home Depot. But the BFFs (Best Friends Forever!) of the Bidens wear pin-striped suits, not coveralls. They carry briefcases, not toolboxes. And you can bet they’re not driving pick-up trucks.

One lucrative cloud seeded by “rainmaker” William Oldaker showered generous benefits on both Hunter Biden and his dad. In 2005–06, the Chicago-based personal injury law firm of Cooney and Conway paid Oldaker, Biden & Belair $220,000 to push its tort reform proposals. At the same time, Cooney and Conway gave Senator Biden’s political campaigns more than $70,000. The firm’s founding co-partner John Cooney told the Chicago Daily Law Bulletin that he struck up a friendship with Biden in 2004 over a legislative battle before Biden’s Senate Judiciary Committee. Cooney was part of a small group that strategized with Biden on campaign matters at his Delaware home. Cooney and Conway represent clients claiming asbestos-related injuries. Biden sided with the trial lawyers, actively opposing measures to reduce frivolous lawsuits and reduce the returns on future lawsuits.

Other heavy-hitting law firms that pitched in to Biden’s campaigns: Baltimore-based Peter Angelos, whose law firm gave Biden $156,250; Wilmington-based Young Conaway Stargatt & Taylor, which kicked in $127, 979; and Pachulski Stang Zielhl & Jones, which donated $145,625, according to The American Lawyer. Philip Howard, author and founder of Common Good, a bipartisan coalition that advocates for legal reform, summed up his record: “Senator Biden has a pretty clear record of being close to the trial lawyers. To people who are interested in restoring reliability to the legal system, he’s probably unlikely to be the champion.”

Disgraced trial lawyer Richard Scruggs donated $11,500 to Biden in 2008. After Scruggs was convicted of attempting to bribe a federal judge, Biden tried to show his ethical bona fides by donating the money to a worthy charity. But Biden couldn’t steer clear of nepotism. The money ended up with the National Prostate Cancer Coalition—a charity where, The American Lawyer pointed out, Biden’s son Hunter sits on the board of directors.

Another Biden family pal in the trial lawyers’ community: Jeff Cooper. With his partner John Simmons, the 39-year-old Cooper built one of the biggest asbestos litigation firms in the country. SimmonsCooper, based in Madison County, Illinois, has donated a whopping $196,050 to Biden’s campaigns since 2003, according to the nonpartisan Center for Responsive Politics in Washington, D.C. In that same time frame, the firm poured $6.5 million into lobbying against the same tort reform bill that fellow asbestos litigators Cooney and Conway opposed—and which Senator Biden worked hard to defeat. Without a hint of irony, Cooper extolled Biden’s anti-tort reform stance: “He understands the plight of the little guy and is against huge corporate interest.” But what Biden did was help fuel lucrative business for the tort bar. When courts in SimmonsCooper’s home base in Illinois finally started cracking down on what had become “America’s No. 1 judicial hellhole” for filing out-of-control tort claims, the firm turned East. And in Joe Biden’s Delaware, they created a new sanctuary. The Wall Street Journal explained:

SimmonsCooper is a big asbestos player, and Madison County was until recently one of America’s meccas for jackpot justice. But the story gets better: Mr. Biden has been helping the tort bar turn his home state of Delaware into a statewide Madison County.

SimmonsCooper made hundreds of millions of dollars on asbestos cases in Madison County, but that started to change in 2004. The business community helped to elect conservative Lloyd Karmeier to the Illinois Supreme Court. Madison County Circuit Judge Daniel Stack also took over the asbestos docket, was determined to clean house, and began dismissing suits filed by residents outside his jurisdiction.

SimmonsCooper and other firms started shopping for a new legal goldmine. And where better than Delaware? Many companies incorporate there, which means a list of defendants usually includes a Delaware target. Beginning in mid-2005, SimmonsCooper began transferring its suits to Bidenland.
The trial bar’s strategy has been to overwhelm Delaware’s once-sensible legal system, taking advantage of rules that pressure companies to settle. In the 22 months following SimmonsCooper’s first asbestos filing in Delaware, the state was hit with 412 suits, primarily from SimmonsCooper and fellow asbestos giant Baron & Budd.

According to the Madison County Record—a legal journal that has doggedly followed this story—clerks in Wilmington were “working nights and weekends to keep up” with the filings. The trial lawyers drew sympathetic judges that have already overseen big verdicts against defendants, primarily Detroit auto makers. Plaintiffs have obtained certain procedures that raise the costs of defense, and restrict defendants’ ability to take discovery.

Cooper first befriended Biden’s sons, Hunter and Beau, before deepening his financial and political relationship with their dad. There’s a personal connection: Cooper’s wife went to high school with Hunter Biden’s wife, Kathleen. And as Biden the Elder was carrying water for the trial lawyers in the U.S. Senate, SimmonsCooper was working another Biden channel through the Wilmington, Delaware, law firm of Bifferato, Gentilotti & Biden, where Joe’s son and Hunter’s brother, Beau, was a partner. SimmonsCooper found Delaware an attractive new magnet for its asbestos litigation racket because many of the firm’s defendants included clients who had incorporated in the state.

SimmonsCooper recruited Beau’s firm to work as co-counsel on Delaware asbestos litigation cases. The Illinois firm steered dozens of cases Beau Biden’s way. He dropped an asbestos defense client to accommodate his deep-pocketed family friend. SimmonsCooper then forked over $35,000 to Beau Biden’s successful run for state attorney general in 2006. Steve Hantler, president of the American Justice Partnership Foundation, observed, “Delaware is fast becoming asbestos lawsuit central.…A tsunami of lawsuits being filed by the SimmonsCooper firm, along with the flow of campaign dollars to Delaware politicians is quite the troubling coincidence.”

Even more troubling was the financial partnership Hunter Biden and his Uncle James (Senator Biden’s brother) attempted to forge with SimmonsCooper. The Bidens approached SimmonsCooper with a proposition: Team up with the family to buy a hedge fund investment firm for $21 million. Cooper agreed to chip in $2 million in exchange for 10 percent interest. The Bidens negotiated the hedge fund buyout of Paradigm Global Advisors with business partner Anthony Lotito Jr. in 2006. As Paradigm chairman, Hunter Biden oversaw half a billion dollars of client money invested in hedge funds while remaining a lobbyist at Oldaker, Biden & Belair.

But things fell apart. In their haste to clean up the Biden image, they ended up with dirtier hands. According to Lotito, the Bidens pursued the venture to help get Hunter Biden out of the lobbying business before Dad launched another presidential campaign. The Madison County Record, which tracked the dealings of the Bidens and SimmonsCooper closely, laid out the timeline:
According to court records filed by Lotito, Joe Biden wanted Hunter Biden to find a different line of work because he couldn’t afford to run for president as father of a lobbyist.

Lotito claims he and James Biden discussed Hunter Biden’s job prospects.

Lotito met James Biden in 2002 and they invested together in 2005, according to Lotito.

Lotito introduced James Biden and Hunter Biden to lawyer John Fascian[a], and the four began planning to buy Paradigm Capital Management.

Majority owner James Parks had started Paradigm in 1991 and successfully promoted it as less volatile than most hedge funds.

Everyone agreed that the Bidens and Lotito would form a corporation to buy 54 percent of Paradigm for $21.3 million in cash.

They would install Hunter Biden as chief executive officer at a salary of $1.2 million.

In April 2006, they formed LBB Limited Liability Corporation.

In May 2006, SimmonsCooper invested $1 million.

In June 2006, according to Lotito, the Bidens told him to stay away.

In August 2006, according to Lotito, the Bidens formed a corporation, executed a promissory note for $8.1 million, and purchased Paradigm’s assets.

In September 2006, Lotito signed an agreement relinquishing his third of LBB.

He sued the Bidens in January 2007, alleging fraud and breach of fiduciary duty.

Lie down with shady partners, get up with a public relations nightmare. Lotito maintained that the Bidens cut a secret deal and tried to fraudulently trick him into signing away his interest in the LLC that they had formed together. In court filings, Lotito’s lawyer asserted that the Bidens used their political clout to intimidate his client: “Ultimately, the Bidens threatened to use their alleged connections with a former U.S. Senator to retaliate against counsel for insisting that his bill be paid, claiming that the former Senator was prepared to use his influence with a federal judge to disadvantage counsel in a proceeding then pending before that court.”

The Bidens shot back that Lotito had neglected to mention that the lawyer he connected them with, John Fasciana, was a crook. Fasciana had been convicted in July 2005 on federal charges of conspiracy and wire and mail fraud over a scheme to cheat Electronic Data Systems (Ross Perot’s computer services company) of millions of dollars. Fasciana was sentenced in 2008 to four years in prison, but has appealed the case. He sued the Bidens for nearly $200,000 in legal fees; they countersued Fasciana for overbilling him and committing fraud by concealing his criminal conviction. Hunter and James Biden also countersued Lotito in February 2007 seeking $10 million. The Bidens asserted that Lotito “hid debts and falsely claimed he held securities licenses to lure them as partners in the planned $21.3 million acquisition,” the Washington Post reported. “Had James and Hunter Biden known the truth about Anthony Lotito, they never would have gone into business with him,” their complaint alleged.

Where did this leave SimmonsCooper, which had kicked in half of a $2 million investment at the request of the Bidens? The Illinois firm had withdrawn from the deal after watching $1 million of its investment allegedly squandered by Lotito. The investment “converted to debt,” which Hunter and James Biden then attempted to shift to Lotito. A New York judge didn’t go along with the Bidens’ attempt to play the victim card. In May 2008, he rejected their bid after concluding they should have vetted the fund more carefully and performed their own due diligence. Cutting through the ploy, the judge ruled that the Bidens’ counterclaims “seek only to foment uncertainty and chaos between the parties in the event that plaintiff is successful in presenting the main claims.…Such pleading will not be countenanced.” Moreover, he ruled, “Certainly defendants do not claim that the law permits sophisticated investors to rely on whatever representations a potential advisor makes without the need for a diligent inquiry by defendants, and that such representations are actionable if they wind up to have been faulty.”

In January 2009, court papers announced that the legal fracas had been settled confidentially —preventing any disclosure or discussion whatsoever regarding the nature of the settlement or the subject matter of the action. The record did note that the lawsuit was resolved “without cost to any party.” For anyone paying close attention, however, the cost to the Biden family’s “just folks” reputation was clear. Alas, the settlement didn’t end the sordid story for the Bidens…

Katie Couric was also in attendance. She was no doubt too busy on the dance floor to ask any questions about the company Barack Obama keeps.

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