Of course, screwing over homeowners isn’t a crime with wealthy progressives, they’ll only get him on sexual assault. Reader reaction to Schneiderman resignation

I must confess to a bit of schadenfreude in seeing Eric Schneiderman quit. He’s finally getting the level of press coverage he always wanted.

You can read the underlying allegations that led to his world-record speedy resignation in the New Yorker. Four women accused him of sexual violence, such as being hit and choked by him. Two were willing to have their names published. One had a photo of the alleged damage done by him.

Schneiderman tried the story that the women had been willing participants to the abuses. From the New Yorker:

All have been reluctant to speak out, fearing reprisal. But two of the women, Michelle Manning Barish and Tanya Selvaratnam, have talked to The New Yorker on the record, because they feel that doing so could protect other women. They allege that he repeatedly hit them, often after drinking, frequently in bed and never with their consent. Manning Barish and Selvaratnam categorize the abuse he inflicted on them as “assault.” They did not report their allegations to the police at the time, but both say that they eventually sought medical attention after having been slapped hard across the ear and face, and also choked… In a statement, Schneiderman said, “In the privacy of intimate relationships, I have engaged in role-playing and other consensual sexual activity. I have not assaulted anyone. I have never engaged in nonconsensual sex, which is a line I would not cross.”

As one wag said via e-mail, when the resignation was announced, “So much for role playing, it only took as long as someone reading through the article.”

Schneiderman was singularly responsible for the Obama Administration’s success in executing what has not been sufficiently well recognized as a second bailout to banks, in the form of the 2012 National Mortgage Settlement in which 49 states also participated. We called the “get out of liability for almost free card” for banks otherwise known as the National Mortgage Settlement. Federal and state officials had massive leverage over bank servicers to force them to do mortgage modifications for borrowers who still had some level of income. It would not only have been better for homeowners and communities, but it would have greatly reduced investor losses.

Schneiderman threatened me through Democratic party intermediaries as I wrote about how terrible the National Mortgage Settlement was and how the Administration had played him for a fool: “I’m going to get her.” I didn’t feel concerned because Schneiderman had been so ineffective as a prosecutor.

But as for many in the large group activists who had been collaborating to document and publicize foreclosure abuses and failures to convey mortgages to securitization trust (this was the liability bomb that could have brought the US banking system to its knees), Schneiderman’s betrayal felt like a punch in the gut. My personal therapy was to take a beaten-up cat toy, a small stuffed black spider, tape Schneiderman’s photo to it, and stick pins in it when I got upset about how Schneiderman had sold out homeowners on a mass basis.

The Administration had been kinda-sorta working on a settlement in 2011. 14 state attorneys general had been working on their own, tougher settlement, and more Democratic attorneys general were considering joining. Schneiderman not only sold out the effort by abandoning it, he didn’t even secure a good deal for himself. The Administration seemed to go out of its way to humiliate him. Schneiderman announced that there would be “hundreds” of people working on it. The Department of Justice’s Lanny Breuer contradicted him and said it would be only 55. That was the number of people already deployed on existing going-nowhere Federal mortgage fraud efforts that would be consolidated into the new task force.

And the piece de resistance? Schneiderman wasn’t even given an office or working phone for months.

Moreover, it should have been obvious that one motive for Schneiderman to join this task force was as a cover for not manning up and prosecuting. As we wrote when the scheme was announced:

It’s clear what the Administration is getting from getting Schneiderman aligned with them. It is much less clear why Schneiderman is signing up. He can investigate and prosecute NOW. He has subpoena powers, staff, and the Martin Act. He doesn’t need to join a Federal committee to get permission to do his job. And this is true for ALL the others agencies represented on this committee. They have investigative and enforcement powers they have chosen not to use. So we are supposed to believe that a group, ex Schneiderman, that has been remarkably complacent, will suddenly get religion on the mortgage front because they are all in a room and Schneiderman is a co-chair?

Even though Schneiderman had amassed solid progressive credentials as a state senator, beating party efforts to squash him by redistricting him so that his formerly Jewish, well educated Upper West Side voter base was Hispanic (Schneiderman learned Spanish) and getting a strong anti-corruption bill passed despite considerable obstacles, he managed to get himself promoted to his level of incompetence by winning the attorney general seat. Going from state senator to state attorney general is a big jump in responsibility. Schneiderman had never been a prosecutor, never even been a litigator. Reports from his office were that he’d dither on case development and was hesitant to pull the trigger.

By contrast, consider how much a real former prosecutor, Benjamin Lawsky, accomplished from the far less powerful office of the newly-formed New York State Department of Financial Services. He showed up the Treasury and other Federal bank regulators on money laundering by Standard Chartered, taking the unheard-of step of threatening to remove its New York banking license. That would have shut down its critically important as well as lucrative dollar clearing operations. For that case alone, he extracted a $340 million settlement for New York taxpayers. And imitation being the highest form of flattery, Lawsky can deservedly pat himself on the back for Federal regulators emulating his bloody-minded approach on later money-laundering settlements and extracting vastly larger penalties than they had previously sought. After his initial successes, he also sought and got resignations of senior bank officials. He also pursued mortgage services, and among other things, got the CEO of Ocwen to step down, and even fined supposedly too blue chip to touch bank fixer “shadow regulator” Promontory Group and extracted a settlement from top white shoe law firm Sullivan & Cromwell for providing bogus information to his office.

Even Eric Schneiderman’s downfall is lamer than Eliot Spitzer’s. https://t.co/fMZ1GV0wGp — Yves Smith (@yvessmith) May 8, 2018

Hopefully, New York will get a tough-minded attorney general who is willing to pursue important cases and knows how to use the Martin Act. We’re sorely in need of someone like that.