Weidner leaned back in his chair and clasped his hands behind his head. “The good news is we’ve kept you in the house.”
“That’s a wonderful thing,” Jack said. “Tomorrow is going to come.”
“It is. And you’ll be there greeting that day. You’re not going anywhere.”
“I’d rather be broke and still kicking than not kicking. They can kill you but they can’t eat you, ain’t that the law?” Jack and Weidner shared a laugh.
So the case of BAC Home Loans Servicing, L.P., f/k/a Countrywide Home Loans Servicing, L.P. v. Jack E. Hamersma dragged on, and Jack continued to live in his house, until, two months later, he died there.
* * *
Weidner’s head was always about to explode. His mind filled with visions of a decadent kleptocracy in rapid decline, abetted by both political parties—America’s masses fed on processed poison bought with a food stamp swipe card, low-skill workers structurally unable to ever contribute again and too dumb to know their old jobs weren’t coming back, the banks in Gotham leeching the last drops of wealth out of the country, corporations unrestrained by any notion of national interest, the system of property law in shambles, the world drowning in debt. He was an NRA member with a concealed weapons permit, and he kept a Smith & Wesson AR-15 semiautomatic rifle with three forty-round clips at his bedside, but it didn’t make him feel safer, in fact it scared the shit out of him, because he saw the orgies of collectors at gun shows and knew how many of his fellow Floridians were armed: constitutional patriots like himself, military vets and sportsmen in camo, and tattooed kids from the cities, who looked like the start of militias. The whole thing went crazy when Obama took over—there was a run on ammunition, and gun dealers started selling T-shirts that said “WARNING: I AM A VETERAN. Department of Homeland Security has determined that I may be radicalized and a threat to national security. Approach at your own risk. YOU HAVE BEEN WARNED!” So what would happen if the Tampa power grid went down? Chaos. That was the future—civil unrest, social disintegration.
Weidner planted a little victory garden in the courtyard of his condo in St. Pete, carrots and lettuce, tomatoes and peppers. It was amazing to taste real vegetables—even to touch them. He was thinking about buying a piece of land out in eastern Hillsborough County, in a remote area where he went for weekend drives with his girlfriend and stopped to buy raw honey and milk at the subsistence farms of people who lived off their crops and hunted deer and wild boar. That might be the only answer: Americans would have to farm again. All these brokers and investors would get dirt under their nails and go to bed sunburned and exhausted, and that would take care of their anxiety and depression. The simpler communities would inherit the earth. He would use the place as a refuge when the shit went down, maybe hire a couple of foreclosed vets with a military skill set to take care of it. You didn’t want all of them wandering around, mentally fucked up, with nothing to do.
Weidner began blogging in 2009. At first he did it to drum up business, but before long he found a voice—bombastic, canny, mischievous, outraged—and became a leader in the foreclosure defense movement that had gotten started with a group of attorneys in Jacksonville, led by a Legal Aid lawyer named April Charney, who introduced Weidner to Sylvia Landis. Blogging under the slogan “Fighting for the American People, Speaking Out As Long As Political Speech Remains Protected,” he wrote every day, in the early morning or late at night, often at great length. The week of Martin Luther King’s birthday he posted an essay to “My Dear Fellow Attorneys,” closely modeled on King’s “Letter from a Birmingham Jail”:
While confined here in a foreclosure courtroom, I came across your recent statement calling my present activities “unwise and untimely” … Perhaps it is easy for those who have never felt the stinging darts of foreclosure to say “Wait.” But when you have seen good families thrown into the street, when you have seen the banks kick down doors and change the locks with no court order, when you have seen law enforcement standing idly by and saying “it is a civil matter,” when you have seen court rulings that are repugnant to fundamental laws, when you have seen the bank and corporate executives reap unconscionable profits, when you have seen clients become sick and die due to the stress and pain of foreclosure and their economic situation, when you have seen single women who live in mortal fear that her front door may be kicked down for the third time, when you see children who have only known their parents suffering—then you will understand why we find it difficult to wait.
Weidner was reprimanded by the Sixth Judicial Circuit for disrupting courtroom proceedings after he offered to help an old lady who was defending herself against foreclosure. The court said that he was soliciting clients; he said that senior judges were trying to punish him for calling on the federal government to take over the Florida rocket dockets. He was also sued for libel by a Palm Harbor company that he’d accused of robo-signing mortgage documents. Some reporters even credited him with popularizing the term. He began to get calls from The New York Times and The Wall Street Journal and was often in the pages of the St. Petersburg Times. He liked talking to reporters—the press was the last best hope for his cause, the only institution in which he still had faith, surpassing that of most of its practitioners. Weidner remained, though, an everyday attorney, practicing out of a crappy office, driving his white Cadillac the six blocks to the county courthouse. “I would love to be like a Gloria Steinem,” he said, “because I’ve got a big mouth on me and for some reason I can get people to listen. But I have to earn a living.” The one thought that held off the imminent explosion in his head was of the millions of dollars in legal fees that his office and his blog—where he posted the motions he filed for others to use—were costing the big banks up in Gotham.
* * *
One day, Weidner got a call from an Indian woman named Usha Patel. A commercial lender, Business Loan Express, was trying to take back the Comfort Inn that she owned in Pasco County. Usha e-mailed Weidner a sheaf of documents, and he read them and heard her out, but he declined to take her on—he was representing homeowners, and hers was a highly convoluted commercial case. Later on, when the case went to court, he got involved tangentially, and he was glad that he did, because Weidner never met a client like Usha Patel, one who fought so hard, who held such a fervent belief in the American dream that it was almost enough to restore his own.
Usha knew that she was responsible for the loan—after all, she had signed the note—and in early 2010 she was trying to negotiate a new payment schedule with Business Loan Express when she and her family traveled to London for a wedding. Upon their arrival back at the Tampa airport, her son looked at his phone and said, “Mom, we have an emergency hearing.”
Usha’s emergency hearing was a small sideshow in the great spectacle of frauds and failures that opened the new millennium. Business Loan Express, rebranded Ciena, was in bankruptcy and being sued by the Justice Department for fraudulent lending practices. A bankruptcy up on Wall Street was a threat to Usha’s failing motel down in Pasco County as Ciena searched for ways to pay off its creditors. Weidner said, “The titans of finance are up there in Gotham fighting over the carcass of Ciena, while at the same time Ciena’s tentacles are down here wrapped around Usha’s neck.” The lender had deceived Usha—it had no intention of working out a new payment schedule—and at the emergency hearing on March 19, the Pasco County circuit court ordered the motel into which Usha Patel had poured her whole life to be put into receivership, which meant stripping away its revenues on behalf of bankrupt Ciena and its creditors, leaving Usha without a business. In court she wept. Her son told her, “No—I have money, and I’m going to pay an attorney before the judge signs the order.” That same day, Usha filed for Chapter 11 protection for her company, Aum Shree of Tampa, in the federal bankruptcy court downtown. The motel was granted a stay. Then things got complicated.
At the first bankruptcy hearing, Usha found that the plaintiff was no longer Ciena, or Business Loan Express, or any other
name she’d ever heard since taking out the loan. Her new adversary was HSBC, the second-largest bank in the world—the “indenture trustee” of the mortgage-backed security that included Usha’s loan. Suddenly documents were filed showing the mortgage assigned to HSBC, documents without a notary seal, documents without witnesses or dates, documents with suspicious signatures of supposed vice presidents, and Usha’s case joined the great foreclosure mess that was sweeping across the country. Unable to force the bank to settle with her, Usha seized the paperwork as her only weapon to save her motel.
For almost two years, Usha fought HSBC and its army of lawyers. She read every document that entered and left her lawyer’s office, learning everything she could about bankruptcy and property law. As the docket lengthened, the documents filled up box after box, which she loaded into the back of her Toyota RAV4, where she stored them and drove them between the motel, her house, and her son’s computer shop. When her first attorney had to drop the case, she hired another, and when he stepped down, she hired a third, and then a fourth, and Matt Weidner came on as an adviser representing one of Aum Shree’s shareholders, but Usha knew the case better than any of them—it was Usha who pushed her lawyers to keep fighting, not the other way around. Eventually her legal bills reached two hundred thousand dollars. Long before that, she ran out of money, and her son and the rest of her family, in the United States, England, and Gujarat, sustained Usha in her fight—because unlike Mike Ross, Sylvia Landis, and Jack Hamersma, Usha Patel was not a native-born American, which is to say, she wasn’t alone.
“This is my bread and butter,” she said. “My heart and money. If I don’t fight I’ll be on the street, after twenty years of hard work.”
In the weeks before the trial, Usha, Weidner, and her latest attorney stayed up well past midnight at her son’s computer shop, night after night, and went over every word of the case. Two days before the trial, HSBC, confronted with the possibility of losing, suddenly agreed to settle. Usha accepted a new schedule of payments, with $150,000 down and $10,000 a month at 6 percent interest. It hardly felt like a victory, but she spent several thousand more dollars celebrating with her many lawyers and other supporters at the oldest restaurant in Tampa.
Fighting a global financial services company to an exhausting draw caused Usha to revise her view of her adopted country. Justice, she concluded, was for rich people, not her. The bankers and lawyers benefited while she went broke. The banks made their money by bullying little people, first trying to intimidate her into surrender, and then, when she fought back, burying her in paperwork, hiring appraisers and inspectors who filed false reports about the condition of her motel, smearing her name. When she talked about HSBC, her nose scrunched up and her mouth turned down and her eyes narrowed in the same look of disgust with which she described the work habits of native-born Americans.
All the same, Usha hadn’t reached the same conclusion as Weidner. She didn’t believe that America was going down. She still saw a bright future, for her children if not herself. “Right now,” she said when her case was over, “God bless America. I believe that.”
PART III
JEFF CONNAUGHTON
Early every morning in 2009 and 2010, Connaughton drove his shitty American car down Massachusetts Avenue to his job on Capitol Hill, pissed off. He was angry at Wall Street for more reasons than he could name, bankers, lawyers, accountants—especially for kicking aside the laws and rules and institutional checks and codes of behavior that he had studied in business school and law school and naïvely believed in. He was angry at Washington—both parties—for letting it happen. He was angry at the regulators, the SEC, OTS, OCC, the ratings agencies, and the other enablers who hadn’t done their jobs. He was angry on behalf of the American people—not the poor, to be honest, who were always with us, but the people in the middle who had (Clinton’s words) worked hard and played by the rules and saw half their 401(k)s disappear in their late fifties just when they thought they’d saved for retirement and now were fucked. He was angry on behalf of his friends from school, men around fifty years old in Tampa, Austin, Madison, suddenly wondering if they could hold on to the house. And finally, he was angry on his own behalf. No one was going to cry for him, but he had lost a lot just when he had a lot for the first time in his life. “Maybe I felt it so much because I had so much personally at stake,” he said. “I was just coming into huge bucks as the whole system falls apart. If you can’t trust Republicans to protect wealth, what good are they?” He was surprised that more people weren’t as pissed off as he was. Connaughton, a moderate Democrat, was in the process of being “radicalized by a stunning realization that our government has been taken over by a financial elite that runs the government for the plutocracy.”
When Biden got the vice presidential nomination in the summer of 2008, Connaughton had suddenly found himself on the outer edge of the inner circle of the biggest game in America. It was so big that he didn’t give a second thought to reopening the Biden ledger. The jockeying resumed, the nauseating ride of up and down, out and in, but this time much faster, dizzying. At the convention in Denver, he went from exile in a hotel fifteen miles outside town, with no role at all, to vetting the guest list for the Thursday night VIP party in the Biden hotel suite—letting other former staffers know that he could get them in, or keeping out people who pretended to bleed Biden blue. At the party, he waited his turn and received an arm around the shoulder. “We did it, pal,” Biden said.
The ride continued in the fall campaign. He was nowhere; then he was helping Kaufman, who served as cochair of the vice presidential pretransition (two months compiling a massive VP bible on every aspect of the job, down to the office space); then, after the election, he was off the transition because lobbyists were summarily banned from the new administration for two years (except those who weren’t), and it didn’t matter that he’d never asked Joe Biden for a favor. It was a little cynical of Obama to single out Connaughton’s particular subclass of the permanent class—most everyone he was hiring had made a ton of corporate money one way or another. Connaughton ended up with a lousy blue ticket to the inauguration, entry to a standing-only viewing area hundreds of yards from the stage, and even that was impossible because of the crowds, so he watched the swearing in of President Obama and Vice President Biden on television with another former Biden staffer at the Hawk ’n’ Dove, one of his Capitol Hill haunts from his early days as a Biden guy.
Whenever Connaughton started slipping toward outer darkness, a call on his cell phone brought him back, and it was always Ted Kaufman, his indispensable ally in Washington. When Kaufman inherited the first two years of Biden’s next Senate term, he asked Connaughton to be his chief of staff—or rather, he asked another Biden insider to ask Connaughton if he would say yes were the job to be offered, because nobody wanted to be told no at that level in Washington. Connaughton would have preferred a White House job like deputy counsel, but he bore the stigma of a registered lobbyist, and Biden was hardly using his scant influence to get his people into top positions. So he thought about it over a weekend, then informed Jack Quinn that he was going to leave the firm where he’d had his greatest success and made some of his closest friends. Just short of fifty and facing a huge salary cut, Connaughton went back to the Senate.
The financial crisis was the biggest issue in the country, and Connaughton and Kaufman saw it in similar terms. First, it represented a breakdown of the legal system. How else, other than unchecked fraud, could those banks have been “technically insolvent,” with only a handful of insiders knowing the truth? But there were deeper causes—the dismantling of the rules that had kept banking stable for half a century. Connaughton saw Kaufman—seventy years old, with a musty MBA from Wharton—as Rip Van Winkle, waking up in the age of “synthetic collateralized debt obligations” and “naked credit default swaps.” What the hell happened to Glass-Steagall, which maintained a wall between commercial and investment banking? (Passed by Congress in 1933, repealed by Co
ngress in 1999, bipartisan vote, Clinton’s signature.) What about the “uptick rule,” which required investors to wait until a stock rose in price before selling it short? (Instated by the SEC in 1938, abolished by the SEC in 2007.) It was easy to overlook this denuded free-market landscape during the long boom years—Connaughton had done just that—but when the storms blew in and there were no walls to keep out the gale or trees to hold down the eroded earth, everyone howled.
Kaufman was going to be a senator for just two years. No election hung over his every move like a guillotine, so he didn’t have to start half his mornings with a fundraising breakfast on K Street. Connaughton also felt liberated: he’d already cashed in once and didn’t have to take calls from lobbyists while calculating his future employment prospects. They both had the luxury to go after Wall Street without a thought for the repercussions. “I’d be doing the same thing if I were running for reelection,” Kaufman told the press, but Connaughton had been in Washington too long to believe it. This was their moment, the first year of the Obama presidency, with the economy hemorrhaging hundreds of thousands of jobs.
The previous October, in the last month of the campaign, Connaughton had picked up signs from Kaufman that the Obama team wanted to bring Robert Rubin on as Treasury secretary. “Don’t you realize that half the country wants to hang Bob Rubin?” Connaughton asked when Kaufman expressed enthusiasm at the prospect. Kaufman would later say, “It was like a car had broken down and we needed a mechanic.” Obama, inexperienced in government and a novice in finance, seemed to believe that Rubin and his followers were the only competent repairmen available.
No more proof was needed that the establishment (the one Clinton had invoked that night in his private study) would emerge from the disaster in fine shape. The establishment could fail and fail and still survive, even thrive. It was rigged to win, like a casino, and once you were on the inside you had to do something dramatic to lose your standing, like write a scathing op-ed (and even then you’d get a pass for expressing public-spirited views unless you actually named names). Rubin was no longer viable for Treasury, but his people were practically the only candidates under consideration by Obama, who, after all, had fought his way into the establishment from farther back than any of them. Michael Froman, Rubin’s chief of staff under Clinton, later a managing director at Citigroup, introduced Rubin to Obama, and he continued working at the bank while serving on Obama’s transition as personnel director, then collected a $2.25 million bonus before joining the administration. Jacob Lew, another Citigroup executive, became deputy secretary of state with a $900,000 bonus in his pocket. Mark Patterson, a Goldman Sachs lobbyist, was hired as chief of staff at Treasury despite the lobbying ban. Timothy Geithner, a Rubin protégé and the architect of the bailouts, was appointed Treasury secretary and survived the revelation that he had flagrantly underpaid taxes to the agency he was going to lead. Larry Summers, whose meaty fingerprints were all over the pro-bank policies of the late nineties, and who earned millions in speaking fees from various future bailout recipients, became the leading economic adviser at the Obama White House. Even Rahm Emanuel, Obama’s chief of staff, a career public servant, had made a cool $16.5 million at a Chicago investment bank in the thirty months he spent between government jobs. All at the top of their field, all brilliant and educated to within an inch of their lives, all Democrats, all implicated in an epic failure—now hired to sort out the ruins. How could they not see things the way of the bankers with whom they’d studied and worked and ate and drunk and gotten rich? Social promotion and conflict of interest were built into the soul of the meritocracy. The Blob was unkillable.
The Unwinding Page 32