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Peddling Innuendo, Exaggerations on ‘Obama’s Wall Street’

American Future Fund continues to exaggerate the facts in a new round of TV ads attacking President Obama’s ties to Wall Street. We do give the group partial credit, however, for correcting a misstatement from one ad it has re-released. It gets “partial credit” because the group corrected the error once in the revised ad, but then repeated the error elsewhere in the same ad. And the group didn’t make any revisions to address other gross misstatements in the ad.

  • The group re-released “Obama’s Wall Street,” which claims the “White House is full of Wall Street executives.” The original version displays “Goldman Sachs” under a photo of Treasury Secretary Timothy Geithner, even though he never worked there nor at any Wall Street firm. That has been fixed in the revised ad — but only in one place. It still identifies Geithner as a former Goldman executive when listing the names of 27 members of “Obama’s Wall Street inner circle.”
  • Also, the new version of “Obama’s Wall Street” did not correct other misstatements. The list of 27 members of Obama’s “inner circle” still includes such folks as the chairman of President Bush’s intelligence advisory board, two men who never worked in the Obama administration, a Bush Treasury official who stayed a few months in the new administration and, oddly, a State Department fellow. The group pads the list with exaggerations and falsehoods in about half of the cases.
  • The group also released a new ad, “Justice for Sale,” which speculates that campaign contributions may explain why the Obama administration’s Justice Department hasn’t filed charges against any top Wall Street executive related to the 2008 financial collapse. But the group offers no evidence of a quid pro quo, and the Justice Department has prosecuted other Democratic donors on Wall Street.
  • The “Justice for Sale” ad also exaggerates how much Obama’s campaign received from Wall Street. The ad says Obama raised “$49 million from Wall Street,” but that includes donations from those in the real estate and insurance industries. Actually, Obama raised $15.8 million in 2008 from those working in the securities and investment industries and $3.4 million from employees of commercial banks.
  • It also exaggerates when it claims Obama’s current chief of staff “made millions from Wall Street after Wall Street received billions in bailout money.” Lew made $1.1 million working at Citigroup in 2008. That’s not “millions,” plural. And Bush didn’t sign the bailout bill until Oct. 3 that year, so some of Lew’s earnings were paid before, not after Wall Street got the money.

‘Obama’s Wall Street’

American Future Fund, a 501(c)(4), first released “Obama’s Wall Street” in February. The ad claims Obama’s “White House is full of Wall Street executives,” and it displays photos of seven people, including Geithner. Under his photo, these words appear: “Goldman Sachs” and “$1.7 million estimate of assets.” But, as we wrote, Geithner never worked for Goldman Sachs. It is one of those Internet rumors that has been repeated so often it becomes accepted, even though Geithner has addressed it numerous times — including at a congressional hearing.

The group got it right the second time — to a point. It correctly displayed the name of Geithner’s former employer — the New York Federal Reserve — in the reissued ad, as you can see from the before and after screen grabs from the two TV ads:

But American Future Fund doesn’t deserve much credit for correcting the record on Geithner. Little else has changed in the revised ad, which repeats all the other errors and exaggerations from before.

The ad, for example, made no changes to the list of 27 people that scrolls up the screen under the banner of “Obama’s Wall Street Inner Circle.” The group didn’t even bother to change Geithner’s employer on this list — repeating the false claim that he is a former Goldman executive. Among the others who remain on the list, even though they don’t belong:

  • Emil Michael — a White House fellow, class of 2009-2010. This supposed member of the president’s “inner circle” didn’t even work at the White House. He served his fellowship at the Department of Defense.
  • Stephen Friedman and Neel Kashkari — two Bush officials. Kashkari, a key Treasury official overseeing the Wall Street bailout under Bush, briefly stayed on with the new administration. He resigned in May 2009. Friedman was chairman of the President’s Intelligence Advisory Board under Bush, but Obama had new intelligence advisory co-chairmen in place by October 2009.
  • William Dudley and Adam Storch — neither of whom worked in the Obama administration. Dudley was selected by the New York Fed’s board of directors to replace Geithner after a two-month search by an outside firm. Storch was hired by the Securities and Exchange Commission to work in the Division of Enforcement.

A full accounting of these and others with the dubious distinction of being included as “Obama’s Wall Street Inner Circle” can be found in our first article on the ad.

‘Justice for Sale?’

In its new Wall Street ad — “Justice for Sale?” — the American Future Fund takes one fact (Obama received a lot of campaign funds from individuals working in the financial industry) and another fact (no senior Wall Street executive has been charged with crimes stemming from the financial crisis of 2008) to ask a loaded question, “In Washington, is justice for sale?”

But the AFF offers no evidence of corruption, just innuendo.

The ad says, “Nearly four years after America’s financial collapse, not a single senior Wall Street executive has been charged with a crime. Not one. Why? Could it be because Obama raised $49 million from Wall Street? More than any candidate in history.”

Let’s first take the claim that Obama raised $49 million from Wall Street. The source is opensecrets.org — a website run by the nonpartisan Center for Responsive Politics, which provides analyses of campaign contributions. But AFF misuses the data. The center’s website shows that Obama raised about $49 million ($42.8 million in 2008 and $7.5 million in 2012) from the “finance, insurance and real estate” sector — not just from Wall Street. (AFF got it right in its other ad — “Obama’s Wall Street” — when it said Obama’s 2008 campaign received $42 million from “Wall Street bankers and financial insiders.” By including “financial insiders,” the ad can correctly claim that Obama raised $42 million.)

The actual amount from “Wall Street” is less than half that.

In 2008, Obama received $15.8 million from executives working in the securities and investment industries, such as those at Goldman Sachs, and $3.4 million from commercial banks, which includes heavyweights such as Citigroup and J.P. Morgan Chase.

So far in the 2012 campaign, Republican Mitt Romney has out-raised Obama by roughly 3-to-1 among individuals in both the securities and investment industries ($8 million to $2.8 million) and the commercial bank industry ($1.5 million to $500,000).

Now, for the suggestion that campaign donations have influenced the Obama Justice Department.

It’s true that no senior Wall Street executive has been charged with a crime related to the financial collapse. The ad correctly supports that claim with an April 14, 2011, New York Times story. The Times story discussed various possible reasons for that, but none of them has to do with campaign contributions.

AFF offers no evidence of a quid pro quo, either. The ad does display a headline (“Has Obama Sold Out to the Banks?”) from a May 6, 2011, Daily Beast/Newsweek article, which discusses campaign contributions and documents the “revolving door” between industry and government. But, again, there’s no proof that campaign contributions influenced any specific decisions at the Justice Department.

And the Obama administration hasn’t hesitated to go after Wall Street big shots who were Democratic donors in other investigations.

Hedge fund billionaire Raj Rajaratnam was sentenced in October to 11 years in jail for insider trading. He and his wife, Asha, have made $119,000 in campaign donations since the mid-1990s, mostly to Democrats, according to the Center for Responsive Politics. That includes $30,800 to the Obama Victory Fund and $2,300 to Obama For America in 2008, federal campaign finance records show.

Rajat Gupta, a former managing director at McKinsey & Company and former Goldman Sachs board member, was also a major Democratic donor. Among his donations in 2008: $2,500 to Obama for America and $2,500 to the Obama Victory Fund. His trial on multiple securities fraud is scheduled to begin May 21.

We note that the ad is correct when it says that former New Jersey senator and governor Jon Corzine, who has raised more than $500,000 for Obama’s reelection, has not been charged in connection with the loss of $1.6 billion in client funds while he was the head of MF Global. But that case is still under investigation, and it is unclear exactly what Corzine’s role was in the company’s alleged mishandling of funds.

Lastly, we want to quibble with the claim that White House Chief of Staff Jacob Lew “made millions from Wall Street after Wall Street received billions in bailout money.” Millions is an exaggeration.

Lew worked at Citigroup prior to joining the Obama administration in January 2009 as a deputy in the State Department. At a Jan. 22, 2009, Senate hearing on his nomination, Lew was asked by Republican Sen. Richard Lugar how much Citigroup paid him for work performed in 2007 and 2008. In a written response, Lew provided a chart that showed he was paid 29 percent less for work he performed in 2008.

Lew responded that he received $800,000 in “discretionary cash compensation” – i.e., bonus pay — for work performed in 2008. That was roughly the same as the prior year. His base compensation was exactly the same: $300,000. The only difference was that he did not receive “deferred compensation” for work he performed in 2008 (unlike the previous year when he received $437,500 in deferred compensation).

So, Lew’s total compensation for 2008 was $1.1 million, down 29 percent from the $1.55 million he earned for his work in 2007. It’s not clear exactly how much he received after Citigroup received bailout funds. President Bush signed the bailout bill on Oct. 3, 2008, and Treasury invested $20 million in Citigroup on Nov. 23, 2008. One thing is clear: He definitely did not receive “millions from Wall Street after Wall Street received billions in bailout money.”

— Eugene Kiely