More Crony Socialism From The DOJ

Eric Holder and the US Department of Justice (Civil Rights Division) have been handed another pot of gold to distribute to his racist friends. This past month, as a Christmas gift to Holder and Barack Obama, the US District Court for the Central District of California (Los Angeles and environs) issued its ruling in the case of The United States v Countrywide Financial Corporation.

A $335 million award was granted to blacks and Hispanics who took out loans with Countrywide during the period from 2004 to 2008. Now if this judgment had been entered after an extended court battle, including hard evidence and believable testimony, it might not be so bad. But Countrywide Financial is not in a position to defend itself, since it no longer exists. Its toxic assets were purchased in 2008 by Bank of America, and Bank of America seemed uninterested in pursuing the matter further. That might have something to do with simple financial risk calculation. I find it more likely that B of A, a recipient of largess from the federal government in the form of bailouts, was being very timid about offending its benefactors in the Obama administration.

So there was what is called a “consent decree.” The plaintiff (DOJ) and defendant (Countrywide/B of A) enter into an agreement on money damages, how they were determined, and how the agreement will be presented to the public in the form of a formal judgment. Here’s the money quote from the decision: “The money damages awarded are intended to compensate allegedly aggrieved persons for monetary and other damages they may have suffered.”

The court rubberstamped the DOJ contention that blacks and Hispanics were charged higher interest rates than whites based solely on their race or ethnicity rather than their creditworthiness. There were approximately 200,000 aggrieved borrowers, but it will be up to Holder and the DOJ to determine who gets what, and how much. Any money not distributed within two years of the decree will go to persons and causes to be determined by the DOJ. And you can bet there will be plenty of undistributed money left over to be used by Holder to reward his political cronies.

Holder and his boss are of course expecting to be back in office in 2012 with the full power of the DOJ to enrich their pet causes and supporters. And even before the election, Holder can play accountant-in-chief for how the money damages will be distributed and to whom. That is very likely to include those who would benefit most from Barack Obama’s reelection. Among the potential recipients mentioned in the decree are nonprofit community organizations that “provide education, counseling and other assistance to low-income and minority borrowers.” Isn’t that what got us into this mortgage mess in the first place?

There is honor among thieves, so Holder will make sure there is plenty of money “undistributed” and he will make promises to supporters of Obama’s reelection that they will be recipients of that money after Obama’s reelection and the passage of the two-year distribution period. I have no doubt that he will keep his word. There is no provision whatsoever in the decree for oversight of the distribution by any person or entity other than Holder and the DOJ themselves.

Holder’s history of favoritism and race-baiting pretty much guarantees that “leftover” money will be distributed to persons and interest groups which have no connection at all to the original lawsuit. The first one that comes to my mind is The New Black Panther Poll-Watching Consortium. Ok, I made that up. But is it really that far-fetched? Need I say that this is just another chapter in the history of what Michelle Malkin calls “the culture of corruption?”