UPDATE: I have now gotten confirmation that the lobbyist I refer to in the body copy below has a name, and that name is Chris Kyler. Chris is a lucky and influential fellow, as he not only represents Wall Street via the SIA, but also the enormously wealthy and powerful real estate industry. So the question is, does the lawmaker in question do anything involving those industries in his "day job", and has he been the beneficiary of any unusual spikes in his good fortune coming from them? I don't know, but it is a reasonable question, I would think. Again, far be it for me to even hint that a lobbyist would do anything unseemly, or that a lawmaker would accept questionable favor from a conflicted influence peddler. No, I think that this is likely just an honest lobbyist doing the Lord's work, and a lawmaker who's abruptly decided to do a 180 degree about-face on his massively popular and overwhelmingly approved sunshine bill, that threatens nobody but criminal stock manipulators, while it protects Utah citizens - all because some unnamed attorneys offered an opinion that the SIA's BS suit is likely, in their opinion, to prevail. Who the attorneys represent is unknown, however I'm working on that, too.
That seems far more likely than some shady deal of vote buying or whatnot using deal flow from related industry groups, right?
Right?
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Every now and then I see something that stops me in my tracks, and gets me wondering whether we, as a nation, are any cleaner or more ethical than the lowest Central American banana republic. I felt that way when I listened to the Aguirre hearing before Specter and Grassley, wherein the SEC prevaricated and tap-danced around their clear abuse of the rule of law, and engaged in one of the most transparent obstructions of justice I've ever witnessed. And I felt that way today, when I saw the news story about the Utah Senator who drafted it, doing an about face on its anti-NSS bill.
In this implausible twist, the latest in the long series of serendipitous negative events to occur in the battle to get Wall Street to behave, and observe the rule of law, and to stop ripping off investors, we find the lawmaker who drafted the bill that would require Wall Street to actually report to the state the level of FTDs in a given Utah company, suddenly and unexpectedly backing away from his bill, and discussing in the paper the merits of pulling it. After the legislature passed that same anti-NSS bill with an overwhelming majority last Spring - 27 to 1, to be specific.
That's the vast majority of the Utah Senate. Voting to pass the law. The will of the people. Deciding to protect themselves from predators in NY who would damage Utah companies with impunity.
Of course, after it was passed, the Governor stalled it - after having been assured by the Securities Industry Association that the SEC would be solving the problem shortly. Immediately after which the SIA sued the state securities regulator over the bill. And then wrote a comment letter to the SEC demanding that the SEC change exactly nothing, and continue to allow naked short selling/delivery failure to be as large or as small a problem as it currently is.
That would also be the SIA which publishes a spreadsheet showing at least $63 billion in delivery and receipt failures as of the last day of Q2, 2006.
So we have the SIA - Wall Street's lobbying organization - lying through its teeth to the Governor, and using the courts to bully the state, and scare it into allowing Wall Street to abuse Utah companies like Overstock, with impunity.
And now, out of nowhere, we have the Senator who sponsored the wildly popular and overwhelmingly supported bill, deciding he is going to repeal it.
Ostensibly, because unidentified attorneys and such had told him it was unlikely to hold up to the SIA's legal challenge. What attorneys, we have no idea. Maybe the SIA's? Or some Wall Street connected attorneys, perchance? Whatever. Attorneys. Legal eagles.
That got me curious. These sorts of abrupt and inexplicable about-faces always do.
What could have made the good Senator decide to pull the bill? I mean, really, not the news "spin" version, of which I am deeply distrustful. What could have actually taken place?
Because I smelled rat the second I read the article.
So I started rooting around, and guess who turned up within minutes as one of the star players in this little drama?
The SIA.
Specifically, a lobbyist, who represents that fine organization of right-thinking do-gooders, along with a rich cross-section of like-minded, wealthy powerhouse industries.
But so what? How could that play in all this? I mean, as we know from the Abramoff scandal, lobbyists can and do curry undo favor and use indirect compensation schemes to get lawmakers to act in inappropriate ways. But that doesn't meant that they all do.
Perhaps this fellow just appeared in the mix because it's a small world up in Utah? Or maybe he's a rare talent, and is a straight shooter who would never cross any ethical lines, and nobody in the Senate has enjoyed any windfall good fortune?
And that got me wondering as to what Senators do for a living when they aren't busy passing or repealing laws for their state. Because it isn't a full time job. The human condition being what it is, I started thinking about the imperfect clay of which we are all molded, and how, throughout human history, power and wealth has controlled the outcome of critical issues, often by sprinkling a little sugar upon those entrusted with the public trust.
Is it at all possible that some sort of unseemly influence could come into play (gasp) and filthy lucre, or some other sort of powerful favor, could exert influence? I mean, I'm not saying that the SIA would pay direct financial compensation toward a Senator to get him to pull a bill. That would never happen in America. But is it possible that some other, seemingly unrelated group or lobby could decide to lavish lawmaker(s )with business or good fortune, kind of in a cosmically connected but plausibly deniable way? For instance, maybe, for a lawmaker whose business is selling cars, that lucky fellow would miraculously get lucrative fleet contracts out of nowhere? Or Senators with restaurants would suddenly be deluged with catering demand?
We know that happens in Washington. But in Utah?
I'm still digging. But these sorts of things are hard to pin down, and there's always plausible deniability. I heard a story once about a lawmaker in bootleg-era Chicago who always seemed to vote for things that benefited the bootleggers, and oddly, received huge amounts of business from the completely unrelated 1920's equivalent of the teamsters and waste management unions. That seemed transparent to me, and I remember musing that things must have changed a lot since then - there's no possibility that an influence peddler could direct some financial benefit to a lawmaker, ostensibly from one group, to advance the agenda of another group he represents, right? There must be some sort of checks and balances, correct?
I mean, that would be as wild as believing that the NY financial media could peddle and spin an agenda advanced by a separate industry, like Wall Street.
And we all know that doesn't happen.
So perhaps the lawmakers in Utah are all abuzz, suddenly and unexpectedly, over a bill they passed virtually unanimously just a few short months ago. Perhaps the guy who created it and pushed it has just found that old time religion, and seen the error of his sinning ways - maybe he had a vision instructing him to smite down this pernicious bit of law. Perhaps the massive push to derail any legislation that would rein in Wall Street is all a grassroots thing, arising spontaneously, with no coordinated, well-funded campaigns or lobbying. Perhaps all politicians are clean as freshly driven snow, and would shun any arrangement that smacked of impropriety. Perhaps Utah is different than bathtub-gin era Chicago, and the bad guys don't buy legislation by the pound, directly or indirectly.
And perhaps there is no Easter Bunny.
There's an awful lot of money at stake, and an industry whose livelihood seems to me to be based upon breaking the rules and ripping off investors seems awfully agitated, and motivated to do whatever it takes to put the kibosh on any laws that would threaten its larcenous influence.
And sometimes whatever it takes is exactly what it seems. The best government money can buy.
Say it isn't so.
I think at this point Utah needs to ask itself a pretty straightforward question: Is it for sale, and for how much? If I got this all wrong, and my hunches and hypotheticals are all wet, I apologize in advance. Maybe these lawmakers are like Patrick, independently wealthy and above the sway of financial tides. In that case, clearly, I'm way off base. But if they are like most of the rest of us and work for a living in some capacity, then skepticism and concern is warranted. I for one don't like the smell that is emanating from SLC this fine Sunday, and would like to understand the full story.
Perhaps some of you in Utah can email the legislature and pose the question of what safeguards are in place to ensure that public servants can't be influenced by wealthy lobbying cartels. Or send them a copy of this blog, for posterity, and ask them to address our concerns as a collective.
When smart people do about-faces for no plausible reason, I think it's fair to ask what the hell is really going on. This is one of those instances.