Not one but two national news outlets came out with profiles of Eric Schneiderman over the weekend, both making essentially the same point that The Observer made in our August profile of the attorney general: that he serves as a progressive counterpoint to the Obama administration, particularly during the current negotiations over a mortgage-backed security settlement.
In the first, Politico’s Ben Smith details some of the push back Schneiderman has received from his fellow AG’s for refusing to go along with the 50-state settlement.
A private-sector figure closely involved in the talks between the Attorneys General and the banks, though, said the situation has not always been that simple. Miller and the other AGs, he said, were initially “thinking they were doing rough justice: Robo-signing was worth $5 billion. They’d take $15 billion on top plus some pretty progressive reforms, and then you get the market started again.”
“Either the dollar figure goes down or the release is fairly broad,” the person said. “The banks aren’t paying $20 billion for robo-signing.”
Miller says the servicing and foreclosure issues can raise the value of the settlement without preventing Schneiderman or other AGs from investigating the many other aspects of the crisis – issues that, he notes, are already the subject of extensive private securities litigation.
And he casts the settlement as a matter of urgency, one that appears to be shared by his allies in the Obama administration, though spokespeople for the Treasury and the Justice Departments declined to comment on the talks.
“Homeowners are in a very difficult situation right now,” Miller said. If the AGs, as Schneiderman and others have suggested, attach their cases to the lawsuits over securitization, the settlement could be delayed years.
“That’s not a good tradeoff, I don’t think,” he said.
If, as he says, his time in the New York Assembly taught him that politics was “a contact sport,” it was football. The Wall Street game is more extreme, Thai boxing, maybe. I asked him if he thought he had what it might take — the starch, the fight and the clean trou with which to wade into battle. I asked, or rather told him, his fight was “dangerous.”
“Well, we’ll find out, won’t we?” he shrugged.
As if responding on cue to that taunt, the New York Post reported two days later that one of Schneiderman’s staff attorneys had been moonlighting as a dominatrix for hire under the name Alisha Sparks. In her day job, she had negotiated deals with errant bankers, by night she was allegedly taking money to whip submissive men into states of bliss. Schneiderman promptly put her on unpaid leave on the basis of the charge that she had broken the rule against outside employment. His press secretary assured me that Sparks hadn’t come anywhere near the current ongoing investigation. But financial bloggers immediately smelled a rat and suggested the outing was just the beginning of a coordinated dirty war on Schneiderman’s office as he turns up the heat with bank subpoenas.
“I think the banks are very scared,” said Tom Adams, a former securities insurer who now writes about the banking industry fornakedcapitalism.com. Adams says he believes Schneiderman has no shortage of hurt and angry former Wall Street players willing to talk to him about what went down.
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