Do you remember what it was like back in 2004 when Democrats put up a genuine war-hero – a man that had killed another man with his own hands in defense of his country – against a draft, and subsequently, duty-dodging political dilettante in the presidential election? Do you remember how frustrating it was when the media ran with the Swift-Boat smears and refused to engage in any kind of substantive analysis of the candidates? Do you remember what the consequences were? Do you remember Katrina? Iraq? U.S. Attorneys? The financial mess?
Before I get along any further, let me make it perfectly clear: I’m not comparing Terry McAuliffe to George Bush. (Hell, I thought it was a border-line low-blow when we compared John McCain to George Bush. Kinda like invoking Hitler...) But the parallels in the press coverage and scrutiny (or lack thereof) seem almost eerie.
Look. George Bush failed at every business venture he ever got involved with, yet somehow became a millionaire anyway. Every business venture Terry McAuliffe has ever been a part of has failed, yet Terry McAuliffe somehow became a millionaire anyway. George Bush surrounded himself with his daddy’s cronies to get ahead; Terry McAuliffe sucked off Bill Clinton’s teat. George Bush’s brother looted an S&L; Terry McAuliffe’s father in law did the same. George Bush’s entire career was built upon an edifice of cronyism, Terry McAuliffe (with the possible exception of his driveway sealing business) never got anywhere without the help of cronies. But the most striking parallel of all is that the media, in covering these races, has let bygones be bygones. They’ve shown absolutely no interest in asking the difficult questions that should be asked.
Perhaps the most egregious example of this dynamic at play in the Virginia race is the media’s sleeping on the job as McAuliffe runs around the state bragging about his Chairmanship of Federal City National Bank.
Under McAuliffe, that bank was run into the ground! It was cited by regulatory authorities for "unsafe practices". They forced the bank to merge with a stronger and more stable institution. McAuliffe’s leadership was an absolute train-wreck. And it went off the rails almost as soon as McAuliffe arrived.
McAuliffe joined the bank’s board in 1987. At the time, he was the Chairman of presidential candidate Dick Gephart’s Finance Committee. In 1988, only months after McAuliffe’s arrival, the bank made a $125K unsecured loan to Gephart’s campaign. I haven’t been able to tell if McAuliffe got a cut of that.
But that’s not all. The Democratic Speaker of the House, Jim Wright, and the Chairman of the Democratic Congressional Campaign Committee (DCCC), Tony Coehlo, also received sweetheart loans from McAuliffe’s bank. Incidentally (because I’m quite certain it wasn’t coincidentally), both Wright and Coehlo resigned from Congress disgraced by banking scandals.
In 1988, McAuliffe assumed the Chairmanship of Federal City. I’m not a forensic accountant and I haven’t gained access to Federal City’s books, but under the circumstances... well... I guess what I’m saying is that we KNOW about the Gephart/Coehlo/Wright loans. How many other crony loans were made that didn’t perform? I don’t think is an unreasonable question to ask. And if I was a reporter, I’d be all over it. Especially since McAuliffe touts his leadership of Federal City as an example of the kind of experience he’ll bring to Richmond. Especially since in 1991 Federal City was cited for "unsafe and unsound" business practices. Especially since regulators forced the bank – after McAuliffe couldn’t fix it – to merge with another bank. And especially because when McAuliffe finally did find a bank to merge with, it was a bank run by other DC insiders, including a former Chair of the DNC. That bank, Credit International, had no branches: it was a bank created ut of whole cloth to cater to Washington’s crème de la crème. If you were allowed to bank with Credit International, you weren’t required to leave your office: the bankers came to you. In the end, Credit International went bankrupt too.
One more note of concern... When these banks fail, it doesn’t matter that the principals paid themselves hundreds of thousands or millions or tens of millions of dollars while they ran it. It doesn’t matter that those same principals made millions of dollars in bad loans to their political pals. In the end, the tax-payer, you and I, clean up the mess. We pick up the tab for insured deposits.
Anyway, I’m really hopeful that the press starts looking into these things. We’re all-too familiar with the costs we incur when the media calls it in. Let’s hope cronyism and exploitation of the public trust aren’t the consequences of media failure in Virginia.