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Profiling Senator Ted Kaufman
A well-deserved profile of one of the most respected Senators, Delaware's Ted Kaufman, who unlike most of his colleagues, has shockingly and stubbornly still not "gone once, gone twice, sold to Wall Street." By Arianna Huffington.
At a time when our political and financial landscapes are littered
with villains and those unwilling to take them on, it's refreshing to
find someone in the halls of power that we can unabashedly celebrate.
Enter Sen. Ted Kaufman of Delaware. Kaufman, Joe Biden's longtime chief
of staff who was appointed to serve out his old boss's term, was
originally thought to be a Senate placeholder.
But, far from biding his time, Kaufman has emerged as one of the Senate's fiercest critics of Wall Street and a champion of the need to push for a serious rebooting of our financial system.
When I met with Kaufman earlier today in his small, basement "hideaway"
in the Capitol ("it took Sen. Biden 15 years to get one of these; I was
lucky to get one right away"), the first thing I wanted to know was
what had inspired his transformation from behind-the-scenes staffer to
fire-breathing accidental leader. Was there a Road to Damascus moment?
"In the beginning," he told me, "though I was very upset about what had
happened on Wall Street, it wasn't one of my key objectives. In fact,
the committees I got on were Foreign Affairs and Judiciary. But then I
started reading more and more about the way the SEC was failing to curb
abusive practices when it came to short selling. So I started speaking
out on that... and the blogosphere really got involved, reporting what
I was saying. Then people started reaching out to me: 'You think this
is bad about short selling, you ought to take a look at this'... or
'you ought to take a look at that!' So we started getting all this
information, and then checking it out with academics, folks from the
industry, we just started building this whole repository of things that
were still going on as if nothing bad had ever happened."
Kaufman, who turned 71 on Monday, has a very unusual resume
for a senator. He earned an engineering degree from Duke, followed by
an MBA from Wharton. He then worked at DuPont before shifting his focus
to government, working as Biden's chief of staff from 1976 to 1995.
The first piece of financial reform legislation he cosponsored, along
with Sens. Patrick Leahy and Chuck Grassley, gave federal prosecutors
combating financial fraud more power. President Obama signed the bill
into law last May.
Since then, Kaufman has immersed himself in the often byzantine battles
over financial regulation -- and watched as financial reform has been
watered-down and lobbied within an inch of its life.
Frustrated, Kaufman has moved to the forefront of those willing to stand up and demand real change.
While far too many of his Senate colleagues tinker around the edges of
our broken financial system, creating what Kaufman has derided as
"compromise measures that give only the illusion of change and a false
sense of accomplishment," Kaufman is fighting to create a financial
infrastructure that will protect us from having another financial
meltdown.
In the last week alone, Kaufman has taken to the Senate floor to deliver two major -- and blistering
-- speeches. The first was a masterful overview, offering chapter and
verse on what led to the financial crisis and what, specifically, needs
to be done to ensure that we "build a regulatory system that will
endure for generations instead of one that will be laid bare by an even
bigger crisis in perhaps just a few years or a decade's time."
Kaufman quite simply wants to put an end to "too big to fail" banks:
"We need to break up these institutions before they fail, not stand by
with a plan waiting to catch them when they do fail."
He believes strongly in the need for a "Glass-Steagall for the 21st
century," the need to radically clean up the over-the-counter
derivatives market, the need to make the shadow banking world far more
transparent, and the need to better address "the fundamental conflicts
of interest on Wall Street" that lead to securities fraud. Kaufman,
looking very Lincoln-esque with his long, thin face and lanky build,
doesn't mince words.
"Individuals at Enron, Merrill Lynch, and Arthur Andersen were called
to account for their participation in fraudulent activities," said
Kaufman. "But it is quite possible that no one will be held to account,
either in terms of criminal or civil penalties, due to the deception
and misrepresentation manifest in our most recent credit cycle."
Monday, on his 71st birthday, Kaufman took to the Senate floor to lambast the loss of the rule of law on Wall Street -- his outrage sparked by the damning report from the bankruptcy examiner for Lehman Brothers.
He reminded his colleagues that the American taxpayer has laid out over
$2.5 trillion to "save the system," and asked: "What exactly did we
save?" His answer: "a system of overwhelming and concentrated financial
power that has become dangerous... a system in which the rule of law
has broken yet again."
After saying that he was "concerned that the revelations about Lehman
Brothers are just the tip of the iceberg," he explained the overarching
reason reform is essential:
"At the end of the day, this is a test of whether we have one
justice system in this country or two. If we don't treat a Wall Street
firm that defrauded investors of millions of dollars the same way we
treat someone who stole $500 from a cash register, then how can we
expect our citizens to have faith in the rule of law?... Our markets
can only flourish when Americans again trust that they are fair,
transparent, and accountable."
The great thing about Kaufman is that he isn't afraid to use direct,
pointed language, saying that "fraud and lawlessness were key
ingredients" in the financial collapse. And he's willing to name names:
in his attack on derivatives, he called out Alan Greenspan, Robert
Rubin, and Larry Summers as key cheerleaders for unregulated
derivatives markets.
Contrast that with Tim Geithner who, during his interview with Rachel Maddow
this week, not once, not twice, but three times ascribed the financial
crisis to a "failure of government." One time it was "an outrageous
failure of government." The next it was "a tragic failure of
government." The third, it was "a terrible failure of government." But
before it was failure of government -- i.e. of regulations -- wasn't it
an outrageous, tragic, and terrible failure of Wall Street?
Spending time with Sen. Kaufman, and witnessing his passion and
determination to fix the system, I asked myself: What conditions helped
turn him into a fearless crusader? And how do we get more like him?
Leaving aside his personal character and wisdom, which we cannot
duplicate, there is one very big condition we can: The absence of money
as a factor in our leaders' decision making. Kaufman didn't need to
raise any money to become a senator -- he was appointed. And he doesn't
need to raise any money for his reelection campaign -- he's not running.
At 71, with a long, distinguished career in government under his belt,
Kaufman is completely unencumbered by the need to curry favor and
approach moneyed interests with his hat in his hand.
So let's all take a good look at Ted Kaufman. This is what it looks
like when our representatives are not beholden to special interests,
and are only serving the public interest.
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Excellent article. I didn't realize you could gain access to a Senator so freely!
hey arianna, you are a fake, phony, fraud !!! why did you censor jesse ventura from your web site ? what are you afraid of ?
http://www.amazon.com/American-Conspiracies-Dirty-Government-Tells/dp/16...
My thoughts exactly. When, for example, Jesse Ventura, former governor of Minnesota, wrote an article that truly took on the system from its rotten guts, Huffington censored it. I'm not lauding Jesse as the savior of anything and I don't think he's that bright, but he did do some work impugning the ruling elite and was censored.
Gentlemen,
I like Jesse, but he's clearly flogging a book and a TV show. How about attacking the substance of the piece... just one point!
She nailed it, and if I may attempt to take it to the next level... forget term limits, set firm time limits on campaigns (3 months max), tax corporations (they'll save a fortune) to pay for funding... and of course, professional lobbying must end.
Result... "government of the people, by the people"... probably too simple, and too easy though.
the one thing that stands in the way of so much progress is one must be willing to lose office (or something) before sacrificing some principle. if it is always about holding office and gathering money there will never be improvement.
Arianna Huffington - seriously Zerohedge?
Where's Marla?
Um, no. Government failed first, but not the way Geithner wants people to believe. Wall Street took over the currency, but only because the government explicitly LET them, and continues to do so, because it's a mutually beneficial arrangement between gov't and Wall Street. What do you expect the Fed to do, just hand over the reins to Congress? No, Congress has the full right to dissolve the Fed, right now. But they won't. It's in their hands, but they won't do a thing. The somnambulant people support the status quo, so that's what they're going to get, good and hard.
Not to worry, mate. Gov't has seen the light. In fact, one of their best minds is on it now:
http://www.thedailyshow.com/watch/wed-march-17-2010/in-dodd-we-trust
In Dodd We Trust.
Amen.
It's not a beneficial arrangement between Wall Street and government, no We The People whose government it is supposed to be, but it is a beneficial arrangement between Wall Street and certain powering factions of government "servants" who have usurped OUR government for corrupted private power and benefit.
Umm...let's know Ted...
*****************************
Ted Kaufman was born on March 15, 1939, in Philadelphia, PA, to Helen Carroll and Manuel Kaufman.
He graduated from Duke University with a BS degree in mechanical engineering, and then earned an MBA degree from the Wharton School of the University of Pennsylvania.
Ted moved to Delaware in 1966 to work for the DuPont Company. It was during this time that he first became involved in Delaware politics, working on various campaigns.
In 1972, Ted joined Joe Biden’s long-shot U.S. Senate campaign on a volunteer basis. After Biden's surprise victory in 1973, he took a one-year leave of absence from DuPont to organize and head Senator Biden's Delaware office. In 1976 he became Biden's Chief of Staff/Administrative Assistant and served until 1995.
Since 1991, Ted has taught a course on "The Congress" as a Senior Lecturing Fellow at the Duke Law School for Law and Sanford Public Policy students. For over 10 years he also taught a course entitled "Government, Business, and Public Policy in the Global Economy" for students from the Duke Law School and Duke's Fuqua Graduate School of Business.
From 1995 to 1999 he was Co-Chair of the Duke Law School Center for the Study of the Congress.
********************
from http://kaufman.senate.gov/senator/
********************
Any warning signs, umm besides he's a long time "bud" with Biden?
Ummm...Wharton....so he knows what about economics? (rhetorical)
Ummm...Teaching at a Law School..oh we're getting warm.
I wonder aloud if he's a member of any give away "clubs?" :)
Umm....No obvious Phi Beta Kappa, no Masons, oh well.
He's been teaching a Global Public Policy Course for 10 years and didn't feed his insights to Sen. Biden? Why wasn't Biden using this information when it might have mattered? (rhetorical).
But come on folks he's been handed another frothing at the mouth goodie two shoes role.
Its regulatory capture 101. If you think they will regulate for you, they have captured your ability to take care of business.
Seriously folks if its butterfly net time, tell me why I'm playing with Lucy in the Sky.
It is suspicious but I figure that he is at the end of his political career and life. He is out from under Biden and has no boss to answer to, and probably thinks he can at least try to do something about the corruption with nothing to lose. He is more than likely recieving a lot of support from the citizens which must be gratifying.
Ok. You got me. Post #2.
Are these people so out of touch with their own existence?
71 years of human existence and he is thinking about this now.
Does his shit smell?
Can we get a stool sample please.
Expect Sen. Kaufman to have an unfortunate accident soon.
I applaud his comments.
The sole purpose of the law should be to protect property and prevent plunder which is also the sole basis of human rights - without these rights and enforcement there is no rule of law as he correctly states. The second problem is the corporate veil which is being used unfairly to defraud behind closed doors - business people no longer need to worry about their reputations since the corporations shield activity.
Here is another honest Congressman telling the truth:
http://www.realclearpolitics.com/video/2010/03/18/dem_congressman_if_you...
On video he just stated "if you don't tie our hands we will keep stealing".
Every component of this article is utter bullshiaaight.
Arriana Huffington
HuffPo.
Kaufman.
Governor Ruth Ann Minner.
Joe Biden.
James Biden.
Hunter Biden.
http://brontecapital.blogspot.com/2009/04/first-post-i-did-not-make-on-p...
Kaufman has known Joe James and Hunter Biden for decades. And he is fully aware of how Joe influence peddled in return for investments by the lobbiers into James and then Hunter's ponzi schemes.
The Biden family is the epitomy of the scumbag politician/banker syndicate that destroyed this country. Kaufman is their Baghdad Bob or Marwan Barghouti of their criminal empire.
Time to spread the word!!!
KAUFMAN GOES TO WAR WITH WALL STREET: http://williambanzai7.blogspot.com/2010/03/kaufmans-war.html
Good article . I am left wondering where is his support ? Why are'nt other senators lining up behind him ? I think the politicians forget that it is easier to get reelected by doing the right thing than it is by doing the wrong thing and"fund raising " . Ron Paul is a perfect example of this , he gets the money anyway because people feel he is doing the right thing .
A bigger and more extensive regulatory system? Rrright, let's set up some up more big fat fail for the next gens. While it is true the SEC is a mess, too big to fail institutions wouldn't exist had the monetary system been honest (ie gold standard, srsly). Kaufman seems like a typical good-intentioned politician building road to hell, as usual. He totally misses the heart of the matter.
If too big to fail was somehow made clearly inoperative by legislation, I have no idea how, then the too big would fail. For they live inside the bubble of confidence and once that popped a new reality would appear. Then if they failed the world as we know it would fail.
While a couple of back bench legislators are willing to put it on the table, not in those terms of course, no government in the world would ever do such a thing. Everyone who has their wealth primarily in financial instruments, accounted for in bits and pixels have to accept that wealth would largely disappear with the demise of the formerly too big to fail. Everyone who takes great comfort and satisfaction in living in the nation that strides the globe like a giant with 1000 military bases and spooks with a licence to kill and meddle in the affairs of every other nation in the world get ready to give most of that up if the formerly too big to fail do fail.
would someone shut this guy up. there aren't enough rags in this world to clean up all his verbal diarrhea.
Greenspan hits back at claims he caused housing bubbleA logical response to a problem. Do research, then decide solution. He must be an engineer, lol.
This is basic problem solving 101, good for him. Wish him well.
Maybe more of our elected officials should have an education in engineering... or at least an ability to decide for themselves after receiving facts
1:100. An accurate representation within the halls of power of the current state of "representative" government. The fact remains that the article nails the issue squarely with respect to the rule of law, or its absence. This policy of a multi-layered system of justice that is in effect, the law of the land has been enunciated by senior administration official, Cas Sunstein. It is this concept, whose premise is that government can only function IF those that formulate or carry out policy measures, many of them crafted in secret under the power of an Executive Order are excluded from judicial review as a precondition for the system to function. A cornerstone of the unitary executive. Cas Sunstein:
Prosecuting government officials risks a “cycle” of criminalizing public service, [Sunstein] argued, and Democrats should avoid replicating retributive efforts like the impeachment of President Clinton — or even the “slight appearance” of it.
Is it no small wonder then, what has come to pass when the coercive power that is the rule of law, expressed through impartial review and the potential of imposed sanction, the very definition of the concept of retribution is removed from the equation all together, rather than simply being confined to the false expressions of this power and the quality of its result that we have witnessed to date?
Why don't we, as ZH-ers, come up with our own plans for financial reform? I'll bet we could come up with fantastic, practical solutions that aren't completely revolutionary (probably can't get rid of the Fed right now, e.g,).
Here's my first list of items I would require:
I'd like to see what people have to say about these. I like these because it eliminates future risks of debt crushing our economy, it limits Federal spending, it disallows deficits, it realigns the Fed to the needs of the people (we hope), it eliminates the financial lobby, it eliminates many of the abuses of Wall Street, and eliminates "financial weapons of mass destruction". Yes, it also rids us of S&P minis (I think - no derivatives), which will probably annoy many traders on this site.
I like this...someone other than me suggesting that ZH take an active role in the process and at almost the same moment; figure those odds...Are you guys up for this? What's wrong with a securities advocacy element of ZH? Or put another way, if you don't provide a solution you are just part of the problem and we don't want the blogging world to think we're just obstructionist Republicans.
What's wrong with a securities advocacy element of ZH?
...gee you mean like hiring/becoming lobbyists? I'm not knocking it but you see it's hard to re-invent the system and get shit done at the same time.
Missing in the above agenda is dealing with the "of gov't employees-by gov't employees-for gov't employees" system we have evolved into now at the Fed, state and most local levels. As the public sector grows and grows more Americans get guaranteed, gold-plated everything for life. That can't fly forever...or even for a few more years...Greece?
Thanks LF... good thought , and good ideas!
From an earlier post of mine...
Forget term limits, set firm time limits on political campaigns (3 months max), tax corporations (equal to the amount spent on lobbying today) to pay for funding, and of course, professional lobbying must end. Result... "government of the people, by the people."
Putting an end to fractional reserve central banking should be the next step... once a true democratic government is in place.
IMO, removing money from politics is the foundation of any real reform (financial or otherwise)... without it, nothing else works.
The meaning of the above would be to help Sen Kauffman (if we like him) push through legislation. I agree that he can act in the best interest of the people because he has no ties to any groups, but getting politicians (without constitutional colleges by the states) to be forced to act for the people, good luck. The elimination of the lobbying profession probably won't happen without revolution, we can always try.
One wonders if he has been talking with the FBI and/or Federal Prosecutors about these issues. He need not depend upon the (un)likelihood of his politician colleagues seeing the light and enacting new legislation on some sort of inspiration from God or conscience. Prosecutions would likely put the issues in the news in a way that would force them to show serious efforts (with an awakened and informed public audience.)
That's the tact I would take. Cynics, of course, can poke holes in that, but anybody got a more realistic plan?
I don't know how many readers here have definable experience with federal regulation, specifically with the SEC. I do.
I was a Hill Staffer for ten years dating back to the 80's before entering the investment business. In addition I have had the misfortune of being involved in several SEC actions over the years and am now currently tracking securities reform.
While I did not see his interview, (and this is very hard for me to say,) Geithner is somewhat correct when he says Washington regulation was part of the problem. Where I differ with both Kaufman and Geithner is the solutions being proposed will not fix the problem.
As both Dodd and Shelby have said, there is much agreement between House and Senate and Dems and Reps with respect to the financial services reform, but what is missing is regulatory oversight.
The SEC is as opaque as the Fed. There is zero accountability for how that agency functions. Here's an example.
Hasn't anyone wondered why Harry Markopolos worked so hard to provide information on Madoff only to the SEC? Why didn't he take his charges to Senator Dodd, or Barney Frank, or his own Member? The simple answer is no one on Capitol Hill would have listened to him.
In order for Congress to track issues within the vast federal system it established liaison offices. If a constituent has a problem with a federal program, say EPA, they send a letter to their Congressman or Senator asking for help. A "case" is opened and the appropriate liaison interacts with Hill and agency. This is how Congressmen and Senators discover issues within the federal system. They are our canaries in the coal mine.
But when a constituent sends a letter describing something like problems with his investment account, or ANY securities issue, they get a polite letter back informing them they must interact directly with the SEC. While its true there is some interaction, The Hill lacks the authority to interact as it does with virtually all other federal regulation.
The SEC knows this. And since there is no real power, a Member/Senator never learns about securities issues or problems in securities markets, which is why all these Congressional hearing are so painful to watch.
This is NOT how the federal system functions in other key areas of federal regulation and given that the SEC missed all the dot.com abuses, abuses regarding brokerage house operations dating back to 2000 and again missed the credit crisis, how many trillions of dollars must be lost before people realize that opaque federal securities regulators cannot do their job?
Has anyone here read the Dodd bill? in all those pages there is basically only a single paragraph regarding the need to further examine how the SEC functions. Really? Are you kidding? The Hill, House and Senate included, do not have a clue how the SEC really functions. All they know is what the SEC tells them, and believe me a bureaucrat will never admit that their agency is dysfunctional.
What constantly amazes me is that when faced with repeated spectacular failures, the SEC has been able to somehow get that which every agency in the federal system craves, MORE.
Read the testimony, its incredible. Trust us now, we've seen the light, we've re-organized internally, we are unified in our mission, but please don't pull back the curtain. If you listen to Chairman Schapiro the only thing not needed is more sunlight...more oversight.
Senator Kaufman, demand more oversight. Heck, they'll probably call it the Kaufman Rule!
The SEC is almost by definition asleep at the switch and when they do act, they generally get it wrong. Wall Street is always going to press the envelope, its what they do. The only way we will ever know whether our bank/securities/commodities regulators know what's going on is if they are truly forced to open-up.
Tyler and Marla, you have both aggressively supported action to audit the Fed and open-up that agency. The same efforts must be directed to the SEC and NOW is the time to act. The good news is that all it takes is one Senator to offer a rather simple and innocuous amendment. Heck you could even ask readers to propose language on this site!
And if you need a lobbyist to press the point, let me know I'm your man.
Thanks, your insight is appreciated.
More of what?
Hasn't the SEC been nothing but a paper tiger?
Isn't that by design?
As long as prosecutions are controlled by the Executive Branch, we can only wait for those to happen, as team O has made it clear they will not be pushing forth on these prosecutions. We need a Spitzer character to push from New York state, and that may happen.
I would be all for an advocacy element from ZH, particularly because many of us are concerned about the system, not our own pocketbooks (although total decimation of the American monetary/political system would probably not be in our short term interests - so I suppose we have indirect skin in the game).
Whatever, Kaufman is voting for Healthcare I'm sure or else Arianna wouldn't be felating him. If healthcare passes the average, sainted 'retail' investor's range of financial motion will be henceforth so severely restricted from cradle to grave that Kaufman's 'lookin' out for the little guy' regulations will be meaningless.
I'm all for killing TBTF and severely limiting the size and leverage of all deposit taking institutions (If Ted's even going that far) but 'Helathcare' isn't about healthcare, it's about the gov't deciding who gets what when and under what conditions...everything, all the time. If this passes, nothing else will ever matter again, including the Nov. elections.
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