Sen. John McCain (R-AZ) has repeatedly said he relies on his economic advisers, including former senator Phil Gramm — “McCain’s econ brain” — to make up for his lack of experience on economic issues. “I would rely on the circle that I have developed over many years of people like…Phil Gramm,” he said in February.
But yesterday evening, MSNBC revealed that Gramm worked for the bank UBS “to lobby Congress about the U.S. mortgage crisis at the same time he was advising McCain” about economic policies. The revelations come as McCain banned several advisers from advising him on subjects covered by their lobbying work.
While Gramm was advising McCain, he was paid by UBS to lobby the Senate about the mortgage crisis, strongly opposing increased government regulation and several consumer protection bills, which, as Keith Olbermann noted, “might have mitigated the current crisis”:
As recently as December 31 of last year, still working for Swiss bankers, specifically to help kill the Emergency Home Ownership And Mortgage Equity Protection Act and the Helping Families Save Their Homes and Bankruptcy Act, a bill that would have let bankruptcy judges adjust mortgages terms so American families facing foreclosure could repay their loans and keep their homes. [...]
Gramm’s deregulation [as a senator] help set the stage for an explosion of banks slicing up subprime mortgages, bundling them with other mortgage slices, to hide the credit risks, and stelling mortgage stew to other investment firms. That gave lenders powerful incentive to make as many loans as possible, regardless of risk.
Graham registered as a UBS lobbyist in 2004. But as early as October 2006, Gramm was reportedly advising McCain on economic issues. McCain advisers also said Gramm had input on McCain’s March 26 speech on the economy. UBS, however, only deregistered Gramm last month.
Other McCain advisers have direct ties to the mortgage industry. John Green, McCain’s chief congressional liaison, and Wayne Berman, his national finance co-chairman, “billed more than $720,000 in lobbying fees from 2005 through last year to Ameriquest Mortgage through their lobbying firm.” “They would be defined as the most blatant and aggressive predatory lenders out of everybody,” said Bruce Marks of the Neighborhood Assistance Corporation of America.