Death and Taxes—UBS stock has fallen from $52 a share, to $23 a share, over the past six months. And now UBS executive Phil Gramm’s political stock is also tanking. Gramm has been doing much of the economic thinking for John McCain, after stepping in and reorganizing the McCain campaign when it appeared to be unraveling. The former Texas senator is responsible for the market-deregulation legislation that made the ongoing mortgage crisis possible (see the Washington Spectator, April 15, 2008); and more recently Gramm, currently a UBS vice chair, has been lobbying on behalf of the troubled Swiss bank.
That’s a problem for the McCain campaign, which is struggling to redefine itself as independent of lobbyists and Washington special interests, even though most of its senior advisers are lobbyists. Gramm and the McCain campaign have been silent about the 262-page amendment then-Senator Gramm slipped into an omnibus appropriations bill a few days before Congress adjourned for Christmas in 2000. The amendment, which few members of Congress had time to read, deregulated the complex trading instruments that brought about the subprime mortgage mess.
But there’s more. Gramm, initially assumed to be on the inside track for Treasury secretary in a McCain administration, seems to be a bad story about to break. Not only is he the dereg zealot who sponsored the enabling legislation for the mortgage lending fiasco. As Newsweek reported, the U.S. Justice Department and the Congress are both investigating his Swiss employer for schemes that allowed wealthy Americans to evade taxation by moving their money into offshore banking havens.
The Gramm saga becomes even more perverse, with Newsweek giving new life to a Houston Chronicle report that Gramm lobbied the state of Texas on behalf of UBS, promoting what might be called a dead teachers’ investment fund. In Texas, Gramm leaned on Republican Governor Rick Perry to approve a UBS program to sell bonds to buy to buy annuities and life-insurance policies on some of the state’s retired teachers. When the retired teachers died, the teacher retirement fund would cash in the policies, with UBS making its money on the transaction.
The UBS plan is strikingly similar to a program that jailed lobbyist Jack Abramoff proposed to an El Paso Indian tribe. After fleecing the Tigua Indians in a lobbying scam, Abramoff offered to lend them money if they would allow him to purchase life insurance policies on tribal elders, which he would ultimately cash in.
Watch for McCain to throw Gramm off the bus, as he has done with the Rev. John Hagee, the Rev. Rod Parsley, the Hon. Tom Loeffler, et al.
Ecumenical Pastor Disaster—John McCain is becoming more agile regarding religious extremists who have endorsed, then embarrassed him. It took him a while to say goodbye to the Rev. John Hagee, an embarrassment on many fronts (see the Washington Spectator, April 1, 2008. Yet McCain moved quickly after religious whack-job Rod Parsley was caught on tape describing Islam as a diabolical religion and claiming that one of the missions the founders of the U.S. envisioned was the destruction of Islam.
Several days after Parsley’s remarks were circulated on various blogs (and the day after we went to press with the June 1 issue of the Spectator, which included an item about McCain’s ties to Parsley), McCain publicly backed away from Parsley’s endorsement and denounced his attack on Islam. Within one week McCain had kissed off Hagee, after the San Antonio preacher implied that Hitler had done God’s will by driving Jews back to their biblical homeland, then said a final goodbye to Parsley for his attack on Islam.
The mainstream press has covered these stories as if the pastors’ perverse and offensive comments are anomalies or momentary lapses in judgment. Yet such remarks are commonplace in their sermons. And McCain is not the only Republican genuflecting at their altars. Former White House press aide Scott McClellan told NPR’s Terri Gross that Hagee was one of several evangelical ministers who were “able to quickly get someone on the phone at the White House.” And McCain surrogate Joe Lieberman, an Independent senator in name but a Republican neocon in deed, is still scheduled to deliver the keynote address at Hagee’s annual Citizens United for Israel conference in Washington in July. McCain was CUFI’s marquee name two years ago.