Is Schneiderman Selling Out? Joins Federal Committee That Looks Designed to Undermine AGs Against Mortgage Settlement Deal

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?

Maybe Schneiderman has convinced himself that he will get more reach or resources this way, but I have trouble fathoming the logic. While he did do a real service by begin the first to question the AG settlement when that was a isolated and courageous position, and was also early to crank up investigations, other less well resourced states (Delaware, Nevada, Massachuseetts) that started later have filed serious cases. In particular, Catherine Cortez Masto of Nevada has been doing old fashioned, go-after-the-foot-soldiers-to-get-the-capos prosecutions of the sort Eliot Spitzer recommended in Inside Job. Why has Schneiderman, after such a promising start, done so little?

Maybe Schneiderman has fallen for the same sort of pitch that the Administration used on Elizabeth Warren. But the tradeoffs were completely different for her. The CFPB was her baby; giving her the chance to set it up was terribly seductive. And she could convince herself that she’d have more power as an insider than running a shadow CFPB out of Harvard to keep the real one honest. But Schneiderman already has a real power base and media reach. It’s hard to see what the Administration could offer him to get him to compromise his independence (which this effort will, no matter what he has convinced himself).

You can check out the post in its entirety here…

Yves also closes out her post with…

It would be better if I were proven wrong, but this looks to be yet another clever Obama gambit to neutralize his opposition. With all the same key actors in place – Geithner, Walsh, Holder – there is no reason to believe the Administration has had a change of heart until there is compelling evidence otherwise.

Again, I hope she is wrong too…

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