While many may be suspicious that Wall Street seemed to be unaffected by recent financial crisis, it is actually two congress members that made the most money from the crisis, according publicly available documents, Bethany McLean wrote in an article for Yahoo Finance.
While there is no evidence that either Senator Mark Warner (D-Va.) who was the governor of Virginia until his Senate term began in 2009, or Senator Bob Corker (R-Tenn.), who took office in 2007, was aware of the strategy, both have since reported millions of dollars of income from the fund they were invested in of Goldman Sachs products that were designed to bet against the real estate market, according to the article.
Goldman Sachs developed ABACUS and sold it to investors on behalf of its hedge fund client Paulson & Co. in 2007.
“Goldman Sachs’ scheme was to design ABACUS to fail, so that Paulson could reap huge profits by shorting the portfolio and Goldman Sachs could reap huge investment banking fees," alleges a complaint from bond insurer ACA Financial Guaranty in a lawsuit they filed against Goldman Sachs in 2011.
From the article:
“This amount of money that’s going into AIG, there is no upside now,” Corker told Politico in early 2009 about the taxpayer bailout of the company. “This is all just like gone money.”
Gone where? Well, what is clear is that Corker especially, but also Warner, made money from their overall investments in Pointer. According to his disclosure forms, Corker’s investment in Pointer first shows up in 2006. He put the value of his investment between $5 million and $25 million. In July 2007, several months before the effective dates for Pointer’s Abacus deals, he put an additional $1 million to $5 million into Pointer. From 2006 to 2014, he reported total income from Pointer of between $3.9 million at the low end and $35.5 million at the high end (including funds from the sale of part of his stake in the fund in 2012.) He sold the rest of his stake in 2014 and reported a cash receivable from Pointer of between $5 million and $25 million that year.
According to Warner’s disclosure forms, he first invested in Pointer in 2007. He assigned his stake the same value range as Corker did his: between $5 million to $25 million. Warner, who sold his entire position in 2012, reported total income from Pointer of between $1.5 million and $10 million.
And now, Corker and Warner are sponsors for the Corker-Warner bill, the purpose of which is to reform the housing system via the government-sponsored enterprises, Fannie Mae and Freddie Mac.
From the article:
Let’s give them some credit. Since they already benefitted from the last crisis, maybe they’re trying to protect us from the next one?
