CLT UPDATE
Wednesday, March 7, 2007
Moonbats and Pod People:
Who is this we elected ?!?
Governor Deval Patrick, who was criticized during the
gubernatorial campaign for his involvement with a controversial subprime
mortgage lender, called a top official at Citigroup, former US Treasury
secretary Robert E. Rubin, two weeks ago to intercede on behalf of the
owners of Ameriquest Mortgage as they sought urgent financial assistance
from the global financial giant....
Citigroup, the world's largest financial company, has a host of business
interests in Massachusetts, many of which are regulated by the state. A
key Citigroup subsidiary handles lucrative bond work for state agencies.
In addition, Ameriquest is licensed by the state Division of Banks.
In the conversation, Patrick vouched for the "current management and the
character of the company," said Kyle Sullivan, his spokesman. Sullivan
said Patrick told Rubin that he was serving as a personal reference for
ACC as its owners pushed for the quick cash infusion from Citigroup that
would stabilize their struggling lending firm.
"They had a very short phone conversation lasting only a couple of
minutes," Sullivan said. "He did not advocate in any way for a deal
between Citigroup and ACC Capital. He simply offered himself as a
reference."
Sullivan would not elaborate further on what Patrick said....
Citigroup, through its subsidiaries, is heavily involved in the state's
very lucrative public financing system. For example, it was the lead
manager for $4.9 billion in bond issuances in 2004 and 2005 in
Massachusetts, much of it for work for some of the quasi-public
authorities that Patrick now controls or will at some point during the
course of his term.
Those agencies include the Massachusetts Water Resources Authority, the
MBTA, MassDevelopment, the Massachusetts Port Authority, the
Massachusetts Turnpike Authority, and the Massachusetts Health and
Educational Facilities Authority.
The Boston Globe
Tuesday, March 6, 2007
Governor made call on behalf of lender
Troubled Ameriquest sought infusion of cash
By Frank Phillips
Facing an uproar that is shaking even his own supporters,
Governor Deval Patrick said yesterday that he made a mistake when he called a
top executive at Citigroup, which has operations that are regulated by the
state, to vouch for a controversial lending firm.
"I regret the mistake," Patrick said in a statement issued late yesterday, his
second public mea culpa in two weeks over politically sensitive errors in
judgment....
Patrick's latest political misstep reverberated yesterday on radio talk shows
and Internet blogs. It also generated concern among his supporters, weeks after
reports that he leased a Cadillac as his official state car and redecorated his
office with $27,000 worth of drapes, desks, couches, and lamps....
Jeffrey M. Berry, a professor of political science at Tufts University, said
Patrick's actions stand in stark contrast to his demeanor during his campaign
for governor. He now seems to be moving in a bubble, Berry said, and is showing
no sensitivity to the political arena in which he works.
"Governor Patrick showed very poor judgment in making the call," Berry said.
Then citing Patrick's campaign theme, Berry said: "During the campaign: together
we can. Today: I can do what I want. There is a tone-deafness that is striking."
The Boston Globe
Wednesday, March 7, 2007
Patrick says he erred in call to firm
Effort to aid lender shakes supporters
By Frank Phillips
Facing another withering controversy, Gov. Deval
Patrick apologized yesterday for intervening in a financial deal
involving an embattled mortgage lender -- a mea culpa that came as the
Herald learned that the Ameriquest official who requested his help was
also a campaign donor....
Patrick made a phone call to a top Citigroup official at the urging of
Adam Bass, a top Ameriquest lawyer who gave a maximum $500 donation to
Patrick’s campaign in February 2006, financial records show. Patrick
previously served as a director for the mortgage company, which has
faced accusations of predatory lending.
The governor’s intervention occurred despite a January memo approved by
Patrick that warned administration officials of potential conflicts when
dealing with ACC Capital, the firm that owns Ameriquest and employs
Bass....
“In the grand scheme of things, this is more consequential than the car
or the drapes or anything like that,” House Minority Leader Brad Jones
said of Patrick’s phone call. “This one may have more legs than the rest
put together.”
The Boston Herald
Wednesday, March 7, 2007
Official seeking favor was a Patrick donor
It is worth remembering that a misguided telephone call
marked the beginning of the end of Thomas F. Reilly's political career.
The steep, inexorable slide in Reilly's Democratic campaign for governor began
when the attorney general admitted calling the Worcester district attorney to
urge him not to release autopsy results on two teenagers killed in a car crash
after a night of drinking.
The girls were daughters of a Reilly friend and campaign contributor....
Now comes Governor Deval Patrick, the Democratic newcomer swept into office last
November on the strength of his promise to end business as usual on Beacon Hill.
It turns out that he picked up his telephone not for a personal friend in
emotional anguish but for a corporate friend in financial distress.
This is not progress.
Patrick's contention that he was acting as a private citizen when he made a call
to Citigroup on behalf of a financially strapped mortgage lender on whose board
he once sat betrays a fundamental misunderstanding of what it means to be
governor of the Commonwealth.
He stopped being a private citizen the day he took the oath of office....
Coincidentally or not, a week after Patrick's call on behalf of Ameriquest
Mortgage, Citigroup struck a deal to extend cash and a line of credit to the
mortgage company that paid Patrick $360,000 a year for two years when he was on
its board of directors.
The Boston Globe
Wednesday, March 7, 2007
Learning curves
By Eileen McNamara
Will Deval Patrick make a call on my behalf next time I need
to refinance my mortgage?
Does the governor really think a free pass comes with winning 56 percent of the
vote? I don't remember the guy campaigning in a Cadillac. What I remember is
Deval Patrick, the candidate, resigned from the board of the parent company of
Ameriquest Mortgage Co. because it didn't look right to be on the payroll of a
subprime lender with a sleazy past. Now Deval Patrick, the governor, calls his
pal Bob Rubin at Citigroup to give Ameriquest his personal seal of approval in
its hour of need with the subprime business in a tailspin? ...
Suddenly a guy who had perfect pitch during the campaign has gone tone deaf in
office. If Patrick wants all this stuff -- the Cadillac, the drapes, the
inappropriate calls to his executive pals -- to stop getting in the way of what
he wants to accomplish, then he has to stop making amateurish mistakes. The
press is not the problem, governor. Simply put, your lack of judgment is the
problem....
The Patrick administration spent yesterday explaining why he was running
interference for a company the Commonwealth was investigating not long ago.
Another day, another apology....
Appearances matter, governor. Your life has changed. Repeat after me, governor:
I no longer work for Ameriquest Mortgage. I work for the people that Ameriquest
ripped off.
The Boston Globe
Wednesday, March 7, 2007
Deval's bad call
By Steve Bailey
This isn't bad political symbolism, like driving a
state-leased Cadillac or buying expensive drapes. This is bad political
judgment. Period....
Can Patrick really believe his personal identity is separate from his elected
position? Does he really believe the recipient of that telephone call -- former
US Treasury secretary Robert E. Rubin, now a Citigroup executive -- considered
Patrick your average private citizen, and not governor of the Commonwealth, when
he took it?
If Patrick does believe that, wow. He is not a new governor making rookie
mistakes. He is a new governor who doesn't understand what it means to hold
public office.
The phone call to Citigroup doesn't smack of political favoritism. It reeks of
it.
The Boston Globe
Wednesday, March 7, 2007
It's not a Caddy. It's worse.
By Joan Vennochi
Once again, Governor Patrick has made a rookie mistake that
could easily have been avoided. He should have known better than to call Robert
Rubin, the former US treasury secretary, last month and offer himself as a
character witness for the owners of Ameriquest Mortgage....
Patrick asked Massachusetts to take a leap of faith in November, trusting a
first-time office seeker to bind the state in common purpose, and begin to move
it forward. Voters delivered that trust, in considerable numbers. Now it is
Patrick's job to deliver his part of the bargain, to keep his governor's hat on
and work single-mindedly for the state's betterment 24 hours a day, every day.
A Boston Globe editorial
Wednesday, March 7, 2007
Patrick makes the wrong call
A Massachusetts judge has ordered Ameriquest Mortgage Co. to
halt a $715 monthly increase in a Cape Cod couple's March payment and to refrain
from foreclosing on their property until a lawsuit over the mortgage is
resolved.
Ameriquest is one of the nation's largest writers of "subprime" loans, which
charge higher interest rates because they lend to borrowers who often have poor
credit ratings or large debts. A study by the Federal Reserve Bank of Boston
demonstrated that borrowers who fall behind on their subprime loans are driving
foreclosure rates in Massachusetts to record levels....
The couple's loan started with a "teaser rate," set for two years, of 5.75
percent, resulting in monthly payments of $1,692, the suit said; after a 2005
rate hike, to 7.75 percent, payments rose to $2,035. On March 1, the rate was
scheduled to jump to 9.75 percent, boosting payments to about $2,750, documents
said.
The Boston Globe
Wednesday, March 7, 2007
Cape couple wins a round against subprime lender
Chip Ford's CLT Commentary
Some of the best investigative journalism in a long
time, honest and excellent reporting, happened at The Boston Globe
yesterday. This is why CLT still subscribes to it -- certainly not
for its editorial slant! But even the Ivory Tower Elitists on
Morrissey Boulevard cannot find a way to
take a pass on this outrage as they did with the new governor's
recent "errors of judgment." They've found their collective voice
and this time weighed in. Even the pontificators cannot any longer
turn a blind eye to its editorial board's anointed choice.
Inquiring minds want to know: Who had the
vendetta, who leaked the governor's phone call? His call was very
internal; few knew of it. Watch for who in the Patrick
administration resigns to "spend more time with his/her family."
The "Moonbats" and "Pod
People" aren't throwing themselves on their swords any longer.
They're now wondering just what they've enabled, created; what they
bought into, what they have wrought on the commonwealth. All the
vaporous blanks the vaporous candidate Deval Patrick allowed them to
fill in for themselves during his campaign for governor aren't turning
out the way they expected. At least we CLT members knew better and
voted otherwise.
Two months into the new Patrick administration; 46
months to go.
When The Boston Globe dedicates nearly an entire
edition to finally exposing their favorite son, you know the honeymoon
is over. At least for now.
"Hell hath no fury like a woman scorned."
Except for a support base betrayed.
 |
|
Chip Ford |
The Boston Globe
Tuesday, March 6, 2007
Governor made call on behalf of lender
Troubled Ameriquest sought infusion of cash
By Frank Phillips
Governor Deval Patrick, who was criticized during the gubernatorial
campaign for his involvement with a controversial subprime mortgage
lender, called a top official at Citigroup, former US Treasury secretary
Robert E. Rubin, two weeks ago to intercede on behalf of the owners of
Ameriquest Mortgage as they sought urgent financial assistance from the
global financial giant.
In a statement to the Globe, Patrick said he made the Feb. 20 call to
Citigroup not in his role as governor but after a personal request to
him from a top official at ACC Capital Holdings, the firm that owns
Ameriquest Mortgage, which has frequently been accused of predatory
lending.
Citigroup, the world's largest financial company, has a host of business
interests in Massachusetts, many of which are regulated by the state. A
key Citigroup subsidiary handles lucrative bond work for state agencies.
In addition, Ameriquest is licensed by the state Division of Banks.
In the conversation, Patrick vouched for the "current management and the
character of the company," said Kyle Sullivan, his spokesman. Sullivan
said Patrick told Rubin that he was serving as a personal reference for
ACC as its owners pushed for the quick cash infusion from Citigroup that
would stabilize their struggling lending firm.
"They had a very short phone conversation lasting only a couple of
minutes," Sullivan said. "He did not advocate in any way for a deal
between Citigroup and ACC Capital. He simply offered himself as a
reference."
Sullivan would not elaborate further on what Patrick said. Patrick was
asked to make the phone call by Adam Bass, senior executive and legal
counsel to ACC Capital, Sullivan said.
Patrick resigned last year from the ACC board after serving nearly two
years as a director, for which he was paid $360,000 a year. Sullivan
said that Patrick received no compensation for making the call and that
the governor has no financial interest in ACC Capital.
But the call to Rubin is highly unusual, in part because of the
political sensitivity over his past involvement with the controversial
mortgage lender. In addition, if a sitting governor reaches out
personally to a top corporate executive, it is typically on behalf of
state interests, such as a desire to preserve jobs in Massachusetts.
Pam Wilmot, executive director of the watchdog group Common
Cause/Massachusetts, questioned what role Patrick was playing in placing
such a call to a corporation with extensive interests before the state.
The implied message of Patrick's call, Wilmot said, is that he wants
Citigroup to go ahead with the deal.
Wilmot said the governor "must represent the Commonwealth and only the
Commonwealth" in such circumstances, rather than private interests.
"When a governor calls a company, particularly one that does business
with the state, and asks it to do something, the company is going to
feel pressure to act," said Wilmot. "They are going to ask, 'If I do
this, will I get a favor?' and, 'If I don't, will there be any penalty?'
Those questions should not be on the table at all, and, regardless of
the answer, the very questions themselves create an appearance of
conflict of interest."
Wilmot said the call puts a company in an "uncomfortable and untenable
position."
On Feb. 28, ACC Capital announced it had reached a deal with Citigroup,
under which Citigroup would give a much needed cash infusion and credit
line to the struggling mortgage firm, which provides high-interest
mortgages to high-risk buyers.
In turn, the agreement gives Citigroup an option to buy companies owned
by ACC Capital, but not Ameriquest. Patrick, who joined the five-member
board in 2004, resigned from the board last July as his candidacy for
governor gained momentum.
A spokesperson for Rubin, who is chairman of Citicorp's executive
committee, confirmed that the short conversation took place, echoing
Sullivan's statement that Patrick offered himself as a character
reference for the company. ACC Capital did not respond to a request for
comment.
According to the financial press that covered the negotiations, the deal
with Citigroup, which has $1.8 trillion in assets, was critical for ACC
owner Roland E. Arnall, as Ameriquest confronts dramatic declines in
earnings because of increasingly difficult conditions in the subprime
lending market.
Delinquencies and foreclosures have jumped in recent months after a hot
housing boom, including in Massachusetts where many subprime borrowers,
including those with loans from ACC capital's mortgage operations, are
losing their homes. In the final quarter of last year, California-based
Ameriquest launched foreclosure proceedings on 54 homes in
Massachusetts, according to an analysis by Banker and Tradesman.
In making the call, Patrick drew on his ties to Rubin, which developed
when both served in the Clinton administration. Patrick was assistant
attorney general in charge of the US Justice Department's civil rights
division. As treasury secretary, Rubin oversaw the federal Bureau of
Alcohol, Tobacco, and Firearms and worked with Patrick on the
investigations into Southern church arson cases in the mid-1990s.
Citigroup, through its subsidiaries, is heavily involved in the state's
very lucrative public financing system. For example, it was the lead
manager for $4.9 billion in bond issuances in 2004 and 2005 in
Massachusetts, much of it for work for some of the quasi-public
authorities that Patrick now controls or will at some point during the
course of his term.
Those agencies include the Massachusetts Water Resources Authority, the
MBTA, MassDevelopment, the Massachusetts Port Authority, the
Massachusetts Turnpike Authority, and the Massachusetts Health and
Educational Facilities Authority.
The public authorities create a list of qualified private financing
teams, which would include such firms as Citibank, to use when they
issue bonds. It is the authorities' sole discretion to make the
selection.
Citigroup's interests also are focused on Beacon Hill, where it employs
a well-connected Democratic lobbying firm, Dewey Square Group, to look
after its interests.
Citibank, with its huge credit card division, is particularly interested
in identify-theft legislation that has been stalled at the State House.
The proposal is opposed by the credit companies because, advocates say,
it would undercut their efforts to sell identity-theft protection.
Primerica, Citigroup's life insurance company, is licensed and regulated
by the state's Insurance Division. Citibank, its banking division, is
aggressively expanding in Massachusetts in retail banking, for which the
company will face additional state consumer laws and regulations.
Citigroup also is competing to serve as a depository for state funds.
Patrick's close working relationship with Arnall, a conservative
Republican and one of President Bush's major financial backers, and his
former role as a well-paid board member for Arnall's lending company,
has caused concern among his supporters and anger among those who have
battled the mortgage giant. The firm faced allegations that it has
defrauded minorities, the elderly, and low-income people.
Patrick has defended his service on the board of the mortgage company,
saying he pushed through changes in the way the company operates.
Patrick served as the board's representative to the Ameriquest legal
team, as the lawyers negotiated a $325 million agreement with 49 states
to settle allegations it had defrauded low-income borrowers.
In 2005, Patrick wrote the Senate Foreign Relations Committee as it
considered Bush's nomination of Arnall to be the US ambassador to the
Netherlands.
He described Arnal as a man of rectitude. He said Arnall has
demonstrated leadership in moving to correct his company's practices and
said the nominee would make a "fine ambassador."
The Boston Globe
Wednesday, March 7, 2007
Patrick says he erred in call to firm
Effort to aid lender shakes supporters
By Frank Phillips
Facing an uproar that is shaking even his own supporters, Governor Deval
Patrick said yesterday that he made a mistake when he called a top
executive at Citigroup, which has operations that are regulated by the
state, to vouch for a controversial lending firm.
"I regret the mistake," Patrick said in a statement issued late
yesterday, his second public mea culpa in two weeks over politically
sensitive errors in judgment.
Two weeks ago, Patrick placed a call to former US Treasury secretary
Robert E. Rubin, now a top executive at Citigroup, interceding on behalf
of owners of Ameriquest Mortgage, which was seeking urgent financial
assistance from the giant firm. When questioned by the Globe late
Friday, Patrick defended the call, saying that he was not acting in his
role as governor and that he simply offered a reference at the request
of a top official at ACC Capital Holdings, which owns Ameriquest and
other financial firms.
In yesterday's statement, Patrick backed down from his adamant stance
that the call was appropriate, but reiterated that he was not
compensated by the owners of Ameriquest Mortgage and does not have a
financial interest in the company.
The deal between Citigroup and ACC Capital was completed last week.
Ameriquest, which provides high-interest mortgages to high-risk lenders,
has been repeatedly accused of predatory lending practices. Patrick
served on the ACC board for two years, earning a salary of $360,000,
until he resigned in July.
"Even though I made this call solely as a former board member, and I
believe that was clear to Mr. Rubin, I appreciate that I should not have
made the call," said Patrick, who spent most of the day in his office,
avoiding reporters who waited outside.
Patrick did not elaborate on what his mistake was or why he feels that
he should not have made the call to Rubin. "We will just stand by our
statement," said his press secretary, Kyle Sullivan.
But in a telephone interview yesterday with Globe columnist Eileen
McNamara, Patrick said: "I get it. I really do."
The call was "a stupid mistake," he said. "I have no stake in this game.
The state has no stake in this game. But I don't get to draw a line
between my private self and my public self. Maybe I'm resisting that a
little bit, and that's why I keep making these stupid mistakes."
Common Cause of Massachusetts, a nonprofit government watchdog group,
had questioned Patrick's decision to make such a call to a company that
has extensive business before the state. Pamela Wilmot, its executive
director, told the Globe such a call would put the firm in an
"uncomfortable and untenable" position and creates an appearance of
conflict of interest for the governor.
Several divisions of Citigroup, the world's largest financial company,
have business in Massachusetts that is regulated by agencies controlled
by the Patrick administration. Citigroup's public financing division
also contracts for lucrative bond work with quasi-public agencies and
authorities that Patrick controls or will control during his tenure as
governor. Ameriquest is licensed by the state Division of Banks.
"I have no financial interest in ACC Capital Holdings or its subsidiary,
Ameriquest Financial," Patrick said in his statement. "I neither knew
nor had any interest in the details of the transaction that ACC Capital
and Citigroup were considering. As a former board member, I was asked by
an officer of ACC Capital to serve as a reference for the company and
agreed to do so."
Patrick, a former assistant attorney general, pointed out that he had
worked with Rubin in the Clinton administration and that the
conversation with Citigroup's executive lasted "at most a couple of
minutes."
Patrick's latest political misstep reverberated yesterday on radio talk
shows and Internet blogs. It also generated concern among his
supporters, weeks after reports that he leased a Cadillac as his
official state car and redecorated his office with $27,000 worth of
drapes, desks, couches, and lamps.
As criticism mounted, Patrick agreed two weeks ago to help cover the
monthly payments on the car and to reimburse the state for the
furniture.
Warren Tolman, the former state senator from Watertown who describes
himself as a strong Patrick supporter, said the governor broke no laws
in making the call to Rubin. But reports that he reached out to
Citigroup on behalf of the controversial mortgage company is a "public
relations disaster," Tolman said.
"I think his supporters are still very much believers and want him to do
well," Tolman said. "But they are scratching their heads. This latest
report is another blow to the governor's image."
Jeffrey M. Berry, a professor of political science at Tufts University,
said Patrick's actions stand in stark contrast to his demeanor during
his campaign for governor. He now seems to be moving in a bubble, Berry
said, and is showing no sensitivity to the political arena in which he
works.
"Governor Patrick showed very poor judgment in making the call," Berry
said. Then citing Patrick's campaign theme, Berry said: "During the
campaign: together we can. Today: I can do what I want. There is a
tone-deafness that is striking."
While Patrick refused to meet with the press yesterday, Lieutenant
Governor Timothy P. Murray came to his defense. Several hours before the
governor issued his statement saying he was wrong, Murray told reporters
outside the governor's office that Patrick acted appropriately in
calling Citgroup.
The Boston Herald
Wednesday, March 7, 2007
Official seeking favor was a Patrick donor
By Casey Ross
Facing another withering controversy, Gov. Deval Patrick apologized
yesterday for intervening in a financial deal involving an embattled
mortgage lender -- a mea culpa that came as the Herald learned that the
Ameriquest official who requested his help was also a campaign donor.
Patrick made a phone call to a top Citigroup official at the urging of
Adam Bass, a top Ameriquest lawyer who gave a maximum $500 donation to
Patrick’s campaign in February 2006, financial records show. Patrick
previously served as a director for the mortgage company, which has
faced accusations of predatory lending.
The governor’s intervention occurred despite a January memo approved by
Patrick that warned administration officials of potential conflicts when
dealing with ACC Capital, the firm that owns Ameriquest and employs
Bass.
Citigroup has substantial business interests in the state and manages
millions of dollars in bonds for state agencies. Ameriquest is licensed
by the state Division of Banks.
“In the grand scheme of things, this is more consequential than the car
or the drapes or anything like that,” House Minority Leader Brad Jones
said of Patrick’s phone call. “This one may have more legs than the rest
put together.”
As GOP critics pledged to explore potential ethical conflicts, Patrick
issued a statement yesterday apologizing for his intervention, which
came one week before Citigroup approved a deal providing an urgent cash
infusion for Ameriquest.
“Even though I made this call solely as a former board member ... I
appreciate that I should not have made the call,” Patrick said. “I
regret the mistake.”
Patrick said he believes Robert E. Rubin, the Citigroup official he
contacted, understood that he was calling in his capacity as a former
official of ACC Capital, not as governor. A Patrick aide said the
governor made the call on a cell phone while away from his office.
Rubin is a former U.S. Treasury secretary who worked closely with
Patrick in the Clinton administration.
Patrick also said in his statement that he has no financial interest in
ACC Capital. He resigned from the firm’s board in 2004 as his
gubernatorial campaign gathered steam. He was paid $360,000 a year
during his work as a director.
The Boston Globe
Wednesday, March 7, 2007
Learning curves
By Eileen McNamara, Globe Columnist
It is worth remembering that a misguided telephone call marked the
beginning of the end of Thomas F. Reilly's political career.
The steep, inexorable slide in Reilly's Democratic campaign for governor
began when the attorney general admitted calling the Worcester district
attorney to urge him not to release autopsy results on two teenagers
killed in a car crash after a night of drinking.
The girls were daughters of a Reilly friend and campaign contributor.
A tearful Reilly insisted that his motive had been only to spare the
grieving parents further painful publicity. He would have done the same
for anyone, he said.
The public did not question Reilly's compassion; it was less sure of his
political judgment, seeing in his intervention on a friend's behalf the
sort of special access that accounts for much of the cynicism about
politics in Massachusetts.
Now comes Governor Deval Patrick, the Democratic newcomer swept into
office last November on the strength of his promise to end business as
usual on Beacon Hill.
It turns out that he picked up his telephone not for a personal friend
in emotional anguish but for a corporate friend in financial distress.
This is not progress.
Patrick's contention that he was acting as a private citizen when he
made a call to Citigroup on behalf of a financially strapped mortgage
lender on whose board he once sat betrays a fundamental misunderstanding
of what it means to be governor of the Commonwealth.
He stopped being a private citizen the day he took the oath of office.
Every telephone call he makes now, whether to Citigroup or to his dry
cleaner, comes from the governor of Massachusetts.
Coincidentally or not, a week after Patrick's call on behalf of
Ameriquest Mortgage, Citigroup struck a deal to extend cash and a line
of credit to the mortgage company that paid Patrick $360,000 a year for
two years when he was on its board of directors.
Patrick said he was merely providing a character reference for the
firm's owners, not advocating on their behalf. If I owned a competing
mortgage company, that might sound like a distinction without a
difference.
"I get it. I really do," a chastened Patrick said in telephone interview
yesterday about the call he now characterizes as "a stupid mistake."
"I have no stake in this game," he said. "The state has no stake in this
game. But I don't get to draw a line between my private self and my
public self. Maybe I'm resisting that a little bit, and that's why I
keep making these stupid mistakes."
The last eight weeks on Beacon Hill have been an eerie echo of those
early Aaron Sorkin scripts from "The West Wing," with the morally
superior chief executive and his acolytes exhibiting flashes of pique
when their good intentions are not automatically presumed and their
mistakes not instantly absolved.
Some of the missteps have been trivial and the news coverage overblown,
but Patrick cannot have it both ways.
If symbolism matters when he stages his swearing-in on the steps of the
State House, then it matters when he chooses a Cadillac as his official
car.
"Shame on me for not running the political traps first," he said of the
criticism he has encountered about everything from his new office drapes
to his wife's staff.
He has been preoccupied, drafting a state budget that required him "to
learn a whole new language," he said. "As engaged as I want to be in the
big policy issues, what I am learning is that every small thing counts,
too."
Politics has "a steep learning curve," Patrick acknowledged, promising
that those critics looking for patterns, divining the seeds of his
administration's eventual downfall in each error in judgment will be
disappointed.
"It is too early for that," he said. "I made a mistake. Period. I am
going to do my level best not to make it again."
The Boston Globe
Wednesday, March 7, 2007
Deval's bad call
By Steve Bailey, Globe Columnist
Will Deval Patrick make a call on my behalf next time I need to
refinance my mortgage?
Does the governor really think a free pass comes with winning 56 percent
of the vote? I don't remember the guy campaigning in a Cadillac. What I
remember is Deval Patrick, the candidate, resigned from the board of the
parent company of Ameriquest Mortgage Co. because it didn't look right
to be on the payroll of a subprime lender with a sleazy past. Now Deval
Patrick, the governor, calls his pal Bob Rubin at Citigroup to give
Ameriquest his personal seal of approval in its hour of need with the
subprime business in a tailspin?
The governor's office told the Globe's Frank Phillips that Patrick's
Feb. 20 phone call supporting Citigroup's rescue of Ameriquest was OK
because Patrick was calling as a private citizen and not as governor.
Does that mean Patrick left the State House and found a pay phone on
Beacon Street? Or did he call from the back seat of his Cadillac?
Suddenly a guy who had perfect pitch during the campaign has gone tone
deaf in office. If Patrick wants all this stuff -- the Cadillac, the
drapes, the inappropriate calls to his executive pals -- to stop getting
in the way of what he wants to accomplish, then he has to stop making
amateurish mistakes. The press is not the problem, governor. Simply put,
your lack of judgment is the problem. And it is not helpful, to say the
least, to have your judgment be the issue day after day. If we can't
trust you to get the little stuff right, why should we trust you with
the big stuff -- say, a $27 billion state budget? Should we trust your
judgment that closing those corporate tax loopholes won't hurt the
state's business climate? What did your buddy Bob Rubin have to say
about that?
While our new governor has frittered away his honeymoon, New York's new
governor, Eliot Spitzer, has come in ready to govern. The first thing he
did was call the Legislature to task for its choice of one of its own
for state comptroller. He came out squarely in favor of an Indian casino
in the Catskills. And he broke a long impasse on a package of reforms
for the state's expensive workers' compensation system. The Patrick
administration spent yesterday explaining why he was running
interference for a company the Commonwealth was investigating not long
ago. Another day, another apology.
Appearances matter, governor. Your life has changed. Repeat after me,
governor: I no longer work for Ameriquest Mortgage. I work for the
people that Ameriquest ripped off. If the attorney general's office
starts digging in again on Ameriquest, please refrain from calling
Martha Coakley to offer your endorsement of the company -- personally or
otherwise.
The Boston Globe
Wednesday, March 7, 2007
It's not a Caddy. It's worse.
By Joan Vennochi, Globe Columnist
This isn't bad political symbolism, like driving a state-leased Cadillac
or buying expensive drapes. This is bad political judgment. Period.
Governor Deval Patrick makes a telephone call to a top official at
Citigroup on behalf of Ameriquest Mortgage. He tells the Globe he made
the Feb. 20 call not in his role as governor, but after a personal
request from a top official at ACC Capital Holdings, the firm that owns
Ameriquest.
Former attorney general Thomas Reilly fielded heavy criticism from me
and others, when, as a candidate for governor, he made a telephone call
to a Worcester district attorney on behalf of a grieving family who lost
two teenage daughters. Reilly's judgment was harshly questioned because
he called the D.A. to remind him that the sisters' autospy reports
should not be released to the public. The call, I wrote then, "smacked
of political favoritism."
Now comes Patrick, who intervenes not on behalf of a grieving family,
but on behalf of an economically pressed lending firm. Ameriquest
Mortgage was seeking urgent financial assistance from Citigroup, which
has multiple business interests in Massachusetts. He is asked to make a
phone call to Citigroup by Adam Bass, senior executive and legal counsel
to ACC Capital Holdings. Patrick, who resigned last year from the ACC
board, makes the call, offering himself as a personal reference on ACC
Capital Holdings.
Can Patrick really believe his personal identity is separate from his
elected position? Does he really believe the recipient of that telephone
call -- former US Treasury secretary Robert E. Rubin, now a Citigroup
executive -- considered Patrick your average private citizen, and not
governor of the Commonwealth, when he took it?
If Patrick does believe that, wow. He is not a new governor making
rookie mistakes. He is a new governor who doesn't understand what it
means to hold public office.
The phone call to Citigroup doesn't smack of political favoritism. It
reeks of it.
The Boston Globe
Wednesday, March 7, 2007
A Boston Globe editorial
Patrick makes the wrong call
Once again, Governor Patrick has made a rookie mistake that could easily
have been avoided. He should have known better than to call Robert
Rubin, the former US treasury secretary, last month and offer himself as
a character witness for the owners of Ameriquest Mortgage.
All Patrick had to do was call the State Ethics Commission, which
answers some 4000 inquiries a year, frequently giving advice over the
phone. If the commission had so advised, Patrick could have disclosed
the call before making it, taking away some of the appearance of
impropriety.
Instead, the governor called Rubin, a colleague from the Clinton
administration who is now a director and chairman of the executive
committee of Citigroup, on behalf of ACC Capital Holdings, the firm that
owns Ameriquest. ACC was seeking financial support from Citigroup, and
got it Feb. 28.
Patrick acknowledged late yesterday that the call was a mistake and said
he regretted it. The speed and directness of the statement are welcome.
Still, his failure to see the error before he made it is worrisome.
Patrick was on the board of ACC for nearly two years until he resigned
during the campaign amid controversy over the $360,000 annual fee for
board members and the low-end lending practices of Ameriquest. Had Rubin
called Patrick, the exchange would not have been quite so questionable.
But by initiating the call, Patrick allowed the impression to be created
that he was advocating for ACC, even though he said in a statement he
was not promoting the deal in question.
Impressions are important, however, both politically and legally.
Section 23(b)(3) -- the "appearances" section -- is the best-known part
of the state conflict of interest law. It forbids actions that a
reasonable person might conclude would subject an official to undue
influence from others. Since Citigroup and Ameriquest are both active in
Massachusetts, and subject to state regulation, Patrick should have
stopped himself.
A broader problem is Patrick's assertion, repeated yesterday, that he
"made this call solely as a former board member" and not "in his
capacity as governor." Yet it is simply impossible to take off the
governor's hat at will.
In this and other recent missteps, it appears that Patrick's brilliant
campaign instincts have not matured into solid governing judgments. They
raise a suspicion that he is not getting very solid advice, or is not
trusting the people who do give it.
Patrick asked Massachusetts to take a leap of faith in November,
trusting a first-time office seeker to bind the state in common purpose,
and begin to move it forward. Voters delivered that trust, in
considerable numbers. Now it is Patrick's job to deliver his part of the
bargain, to keep his governor's hat on and work single-mindedly for the
state's betterment 24 hours a day, every day.
The Boston Globe
Wednesday, March 7, 2007
Cape couple wins a round against subprime lender
Judge tells firm it cannot foreclose until suit resolved
By Kimberly Blanton
A Massachusetts judge has ordered Ameriquest Mortgage Co. to halt a $715
monthly increase in a Cape Cod couple's March payment and to refrain
from foreclosing on their property until a lawsuit over the mortgage is
resolved.
Ameriquest is one of the nation's largest writers of "subprime" loans,
which charge higher interest rates because they lend to borrowers who
often have poor credit ratings or large debts. A study by the Federal
Reserve Bank of Boston demonstrated that borrowers who fall behind on
their subprime loans are driving foreclosure rates in Massachusetts to
record levels.
Thomas Hilchey, a self-employed home builder who filed the lawsuit last
month, is middle class and isn't a typical subprime borrower, according
to his lawsuit and his Stoughton attorney, Bruce Bierhans.
"He has paid all his bills, including his mortgage, in a timely fashion,
and now finds himself in a loan he can't pay," Bierhans said.
Ameriquest declined to comment on the case.
Hilchey and fiancee Robin Crevier, in the suit in Suffolk Superior
Court, said Ameriquest's loan salesman did not provide the proper
documents and disclosures about their loan, as required under state and
federal laws. The payment increase "has this middle-class individual
facing the specter of foreclosure," the suit said.
The couple's loan started with a "teaser rate," set for two years, of
5.75 percent, resulting in monthly payments of $1,692, the suit said;
after a 2005 rate hike, to 7.75 percent, payments rose to $2,035. On
March 1, the rate was scheduled to jump to 9.75 percent, boosting
payments to about $2,750, documents said.
While the couple agreed to an adjustable rate mortgage to refinance
their Harwich home and knew the interest rate could rise in two years,
they were not told how high future rates and payments could go, Bierhans
said.
Boston attorney Gary Klein said a lawsuit is virtually the only method
available to Massachusetts homeowners to halt foreclosure proceedings.
Massachusetts law, unlike a majority of states, does not require courts
to monitor the process, said Klein, who represents dozens of borrowers
in class-action suits against subprime lenders. He said he has about 40
such injunctions.
In Massachusetts "foreclosure is an entirely private proceeding" between
the borrower and lender, he said.
In a Feb. 21 decision, Superior Court Judge Allan van Gestel said the
rate on Hilchey and Crevier's loan would remain at its current rate
until the lawsuit is resolved.
NOTE: In accordance with Title 17 U.S.C. section 107, this
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