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That stench of corruption you smell is most likely the odor emanating from Obama Administration and Attorney General Eric Holder's Office. At least a portion of what you are smelling is how the Democrats are funneling tax dollars and bank fines to far left community activist organizations - for these organization to then in turn use in support of Democrats. It is as corrupt a practice as you will find in any banana republic.
It works like this. Democrats pass a law, take Dodd Frank for example, which could also reasonably be called the ACORN Full Employment Act. In it, the Democrats specify that a portion of our tax dollars are to be used to fund local organizations, ostensibly to conduct education and counseling of minorities or the elderly on financial matters. The government than enters into a multi-year contract with one of the many far left activist organizations for millions of dollars. A variety of far left organizations wholly survive on our tax dollars through this scam, the most infamous being, until their recent dissolution, ACORN. It is completely legal. It is utterly corrupt. And because of contractual obligations, the Democrats are able to keep this scam going even during periods of Republican control of Congress.
But that is not the only method by which Democrats funnel millions in funds to partisan left wing groups. A variant on the above theme is for the Justice Department to direct that banks owing fines for "race discrimination" have to pay a portion of the fines directly to whatever private radical left organization the Justice Department directs. This too is ostensibly justified on the grounds of educating minorities. The difference here, as the IBD article below makes clear, is that the left are on far shakier legal grounds when going this route.
Just as an aside, these shakedowns of banks for "racism" in lending practices are precisely what led to our economic meltdown in 2008 by destroying credit standards. Invariably in these cases, no single act of racial discrimination is ever proven to have occurred. Rather a bank is held liable if its lending practices show a disparate impact on minorities. That means that statistically, a bank did not make enough loans to minorities - irrespective of how colorblind the bank's lending standards are, irrespective of its outreach to minorities, and indeed, irrespective of whether it statistically rejected more applications from whites than minorities. It is a travesty. This use of disparate impact theory was held, for all intents and purposes, unlawful by the Supreme Court in the employment context in the pivotal 2010 Ricci v. Destafano case. It should be unlawful in all contexts. There is no place for racism in our society, but the disparate impact theory doesn't punish racism, it punishes institutions for results wholly irrespective of actual racism and thus it deeply distorts our economy.
At any rate, back to the topic at hand. It is the Justice Department funneling fines to left wing organizations that is rearing its ugly head today. This from IBD:
Last week, House Judiciary Committee Chairman Lamar Smith fired off a three-page letter to Attorney General Eric Holder warning that his recent punishment of Bank of America's mortgage unit seemed political. In fact, he may have abused his power.
As IBD first reported Jan. 4, 'BofA Must Pay Excess Settlement Funds To Acorn Clones," the $335 million lending-bias deal requires BofA to fork over a chunk of the payout to leftist groups not connected to the suit.
The unusual term is part of a secret Justice program to redistribute millions in settlement cash to third parties instead of alleged victims.
Critics told IBD it's a "political backdoor" to subsidize Democrat-tied bank shakedown groups. . . .
Under the order, excess funds will be handed to groups that "provide education, counseling and other assistance to low-income and minority borrowers."
The corrupt group, [ACORN,] which has re-emerged under other names after coming under investigation in 2009, continues to receive federal funds. Acorn Housing Corp. got some $700,000 in federal money after changing its name to Affordable Housing Centers of America.
Last year, Holder also ordered two AIG-owned banks to pay a minimum of $1 million to "qualified organizations" that help "African-American borrowers."
More recently, he ordered C&F Mortgage Corp. of Virginia to reward such groups. As of 2010, some $7.6 million was waiting to be handed out from his unsupervised grant program. Recipients aren't restricted in how they use the money. In 2008, Acorn bankrolled get-out-the-vote operations for Obama.
Justice would not provide a complete list of approved nonprofits, but a spokeswoman told IBD the National Urban League and Operation Hope are eligible for cash from the AIG case. Urban League has lobbied to water down credit standards. Operation Hope founder John Bryant serves on Obama's financial advisory council.
Smith demands that Holder furnish a full list of "qualified organizations," along with an audit of payments. Hearings are in order if his response is unsatisfactory.
Hats off to IBD for following up on this like a dog with a bone and getting the Republicans in congress to finally move off their posteriors. Nothing that I am aware of authorizes the Justice Department to direct that fines otherwise payable to the government be directed to non-party organizations.
I am waiting for the day when a financial institution finally appeals the use of disparate impact theory in lending to the Supreme Court. This is social engineering at its worst, it was the "but for" cause of the 2008 economic crash and our continuing economic woes, and yet the Obama administration and the Holder Justice Department are pushing it harder than ever before. It is setting us on a second course for disaster.
