Trump Nominates Corporate Lobbyist and Foreclosure Fraudsters Defender Pam Bondi as Attorney General

Trump opponents should be careful about what they wish for. As much as they are no doubt enjoying spectacle of forcing an early Trump climb-down by getting Matt Gaetz to withdraw as attorney general, no one should have any illusions about the new candidate, Pam Bondi. Bondi was the attorney general for Florida for two terms. Her conduct on the foreclosure front alone shows she defends corrupt corporate cronies rather than enforce the law to protect ordinary citizens.

Trump presumably picked Bondi because she was a loyalist. The Financial Times reminds readers that Bondi dropped a 2013 investigation into the failed Trump University mere days after Trump gave $25,000 to Bondi’s re-election campaign. She was a member of his legal defense team in his first impeachment trial and supervised some of the state lawsuits challenging 2020 votes. As chair of the litigation team at America First Policy Institute, oversaw amicus briefs supporting Trump in his legal fights, such as one that contended that the Jack Smith special counsel appointment was unconstitutional.

The pink paper describes Bondi’s recent career as a lobbyist:¹

She then joined Ballard Partners, an influential lobbying firm with close ties to Trump. Susie Wiles, Trump’s pick for White House chief of staff, worked at the firm for nearly a decade.

Bondi chairs Ballard’s corporate regulatory compliance practice. She has lobbied the federal government on behalf of General Motors, Amazon, Uber, Qatar’s government and other clients.

Now let us turn to Bondi’s fraudster protection racket as Florida attorney general. Recall that Florida was one of the epicenters of foreclosures in the wake of the crisis. Over 6 million households lost their homes as a result. The foreclosure crisis went well beyond subprime borrowers; in fact the number of prime mortgage borrowers hit by foreclosures was twice that of subprime.

Many of these foreclosures could have been prevented via a mortgage modification that would have left the investors in the securitization better off than a foreclosure. Too many were even bogus, including foreclosures on homes owned by servicemembers (exempt from foreclosures while on active duty), that had never had a mortgage, or where the house was lost in a fire but the servicer refused to accept a payoff in full.²

A criminogenic environment had developed to support the servicers’ desire to process high volumes of foreclosure cheaply. That regularly involved document fabrication (how many readers remember bogus allonges?) and legally invalid procedures, like individuals with no legal authority to do so engaging in so-called robosigning.

We were part of a group of lawyers, activists, and journalists combatting these mass foreclosures. Because the focus was on systemic abuses that we could substantiate and developing legal theories that could give borrowers more leverage, our focus was less on personalities, since for the most part they were not positioned to drive the action in courts.³

Even so, Pam Bondi managed to stand out, and not in a good way. From a 2011 post:

Now contrast Bondi joining in with other pious moralizers about suspected borrower bad behavior with her conduct when presented with actual bad behavior by a foreclosure mill. Via 4closurefraud, hat tip Lisa Epstein:

Today Florida Attorney General Pam Bondi announced a first-of-its-kind settlement against attorney Marshall C. Watson and his law firm, one of the largest foreclosure firms in Florida, for alleged improprieties in the prosecution of foreclosure cases throughout Florida.

This settlement, which calls for a $2 million payment and imposition of certain requirements to conduct business, is the first stemming from numerous investigations into Florida foreclosure law firms.

$2 million is at most what Watson makes in two weeks, more likely one week. In Alabama, the pickings for big foreclosure firms are much lower than in Florida. Not only is the default rate worse (Alabama didn’t bubble up anywhere close to the degree that Florida did) but Alabama is a non-judicial foreclosure state, while Florida is a judicial foreclosure state, so the fees per foreclose are greater in Florida because more legal work is involved.

One of the big foreclosure mills in Alabama, Sirote & Permutt, makes $4 million a month on foreclosures. It’s pretty unlikely that one of the largest players in Florida would be pulling in less.

So in one corner, a wealthy and likely politically connected law firm gets off easy despite widespread reports of abuses in Florida (see 4clousurefraud, Fraud Digest, foreclosurehamlet.org for more sordid details) while little guys are presumed guilty and denied a remedy that lenders actually prefer because they come out ahead too. Even among the capitalist class, the banks and their minions are asserting their right to be first at the food trough.

Bondi later fired two attorneys in her office, who had previously gotten exemplary performance reviews, who were the working oars of an investigation into Lender Processing Services, a Florida-based company that was a major player in facilitating servicer foreclosure abuses. LPS made false statements in SEC filings about pending litigation in SEC filings. The FDIC filed a suit against LPS for $154 million. This was followed by a suit by a US Bankruptcy Trustee, who joined all 13 US Bankruptcy Trustees, and then a related private class action. The attorney general of Nevada filed a 606 count criminal indictment against two “title officers” who were LPS employees.

But this effort to root out foreclosure abuses by taking apart the operations of a central actor went pear shaped. The linchpin witness in the Nevada criminal case committed suicide, in circumstances that Mark Ames and others found to be questionable. With Obama successfully undermining the campaign by some state AGs to get a meaningful mortgage settlement, the campaign against LPS fizzled out, resulting in an eventual $127 million, as in cost of doing business, fine, in a settlement with 46 state attorneys general.

With that as background, Bondi played a key role in the LPS protection racket, as recounted in depth in Florida Protects Banking Giant Lender Processing Services, Ignores Hurting Homeowners in the Miami New Times.

We looked again at Bondi when she was under consideration by the Romney campaign as a possible VP, and found she compared unfavorably to Sarah Palin, including in the intellect category. From a 2012 post:

Business Insider reports that the newest addition to the list of possible VP candidates is…Florida’s Pam Bondi. We’ve refrained from writing about her at NC merely because there seemed to be far more important targets. But contrast her conduct as the AG of one of the ground zeros of the foreclosure crisis, Catherine Cortez Masto of Nevada. Shortly after the robosigning scandal broke, Masto got legislation passed that made it a crime (a felony) to file improper paperwork with the courts, subject to 10 years in jail and fines of $10,000 per violation. (Note that this legislation did not change the legal requirement for foreclosure; it simply criminalized failure to comply. What did Bondi do? She fired two staffers in her office who were taking document fraud seriously.

Per Business Insider, this is what recommends her:

• She’s a woman. And she’s young. While the Romney campaign is said to be looking for experience and gravitas, there are obvious demographic advantages to picking someone who can appeal to women and young people.

• She’s from Florida. Bondi could give Romney a much-needed advantage in the crucial swing state.

• She tried to take down Obamacare — and almost won. Bondi was the lead attorney general in the lawsuit to overturn the Affordable Care Act. With her as VP, Romney would have one less problem to deal with.

• She’s really pretty.

The Romney campaign is getting her to stump for him in the Northeast on a limited basis.

The article warns that she’s probably not high on the prospect list and selecting her would invite a firestorm of Palin comparisons. Contacts in Florida say that Palin is probably smarter than Bondi (one wonders how she graduated from law school if true) and that her prior career as a prosecutor in Hillsboro County was light on actually filing cases and heavy on acting as a spokesperson.

So in the unlikely-but-not-impossible outcome that Bondi gets the nod, one can imagine that the campaign will portray her asleep-at-the-switch on the foreclosure fraud beat as a great plus. MBS Guy notes:

There is something so perfect about Romney picking a VP who would help him win the anti-“deadbeat borrower” vote. It seems fitting that the foreclosure crisis should be part of the election story – but in a totally bizarro way.

With Bondi as his running mate, Romney could paint Obama as the candidate who did too much to help deadbeat borrowers, and worsen the housing crisis, by stretching out foreclosures via the AG foreclosure settlement.

I think that would help ensure that neither candidate would say anything remotely truthful on issues like housing and the economy.

So having knocked out an attorney general candidate with serious sexual self control issues (as Lambert said, finding sizable Gaetz Venmo payments to two women looks to have been a deal killer, in an analogy to Elliot Spitzer being felled by evidence of having frequented high-end prostitutes), we instead get one with a track record of favoring donors and corporate bad actors. In the “pick your poison” category, I’d rather have a personal sleaze who was still firmly dedicated to taking on corporate misconduct than a well-established institutional sleaze, but others clearly believe differently…particularly big business interests in the Senate.

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¹ This seems to be an odd career move for a state attorney general, since skilled and connected government attorneys do very well financially when they move to the private sector. Hopefully readers who know this arena better can opine.

Specifically, the Federal level, AGs and even senior DoJ attorneys usually wind up at law firms, either as litigators, or the more senior ones, rainmakers who might also get their hands a bit dirty in cases. A few like Benjamin Lawsky and Neil Barofsky set up their own boutiques (although Barofsky then went to Venable, one of the few major firms that is willing to sue Wall Street). The fact that Bondi did not go the legal route raise questions about her interest in practicing law; an older post we hoisted later in this piece also questioned her competence. Another window into her actual legal chops would be the caliber of state vote-challenging lawsuits Bondi purportedly oversaw. I must confess I have read only a few Trump-related filings and not these in particular. But the ones I have encountered were very poor, with heavy political whinging, paper thin if any legal analysis.

² The very short version of why this came about is that the preventable and invalid foreclosures were almost entirely due to the widespread adoption of mortgage securitization. When banks made and retained the mortgage, they had incentives to restructure a mortgage if a borrower got in trouble. They did not want to deal with foreclosures (including having to ‘splain to regulators) and a half a loaf was better than none. Plus because they were already in the business of evaluating borrowers to make new mortgage loans, they had the skills to reassess them in the light of changed conditions. So debtors that had a decent level of income would typically get a mortgage modification.

By contrast, servicers were high volume processing operations that took and accounted for borrower payments as well as of course, their own fees. Servicers were paid to foreclose. There was not even a mechanism for them to get paid for modifying mortgages, even before getting to the impediment that they lacked the skills to do what amounted to underwriting a new loan. Servicers were caught out in many abuses to increase the rate of foreclosures, such as deliberately posting payments late, crediting payments to late and other fees before principal and interest that a borrower would continue to have short paid, and engaging in “gutter service” of foreclosure notices. They also abused the investors in the securities. One of many found repeatedly by a team of activists was the servicer claiming it still had a foreclosed home in its “real estate owned” portfolio, meaning it could charge monthly fees to the property. They documented repeated instances of these houses having been sold, yet still being reported as in the trust for many months after a sale.

³ Hence we were all blindsided when Obama managed to flip New York State Attorney General Eric Schneiderman, who was then leading an effort with 13 other state attorneys general, to get a better deal out of an Administration plan to settle the meteor-hitting-the-planet-and-killing-all-the-dinosaurs level liability from many years of mortgage originators and securitizers (as in mainly banks and bank affiliates) violating their own by design rigid contracts for how to convey the mortgages to the securitization trust, which then would distribute the interest and principal payments in pre-stipulated ways to classes of investors, called certificate-holders. Unlike most contracts, these abuses could not be remedied by waivers later, hence the resulting pervasive document fraud to solve for the lack of a time machine. The Schneiderman effort was in the process of outrunning a moribund Federal settlement effort. Obama got Schneiderman to drop that via offering him a seat on a Federal task force (which proved to be an empty role and the Administration even went out of its way to humiliate Schneiderman) and a seat next to Michelle at the State of the Union address.