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I read the speech a couple hours after reading some of All the Devils Are Here, Bethany McLean and Joe Nocera's excellent dissection of the subprime disaster. As it happens, I had just gotten to a part of the book concerning the Illinois senator Barack Obama, who in November 2005 took part in a hearing to confirm Roland Arnall as U.S. ambassador to the Netherlands. Arnall, who died in 2008, owned ACC Holdings, which in turn owned both Ameriquest and Argent, two of the country's largest subprime mortgage companies. In 2006, according to the authors, Ameriquest paid $325 million to settle a lawsuit from 49 states' attorneys general, who said the the mortgage broker had "engaged in extensive consumer abuse." In 2008 the Office of the Comptroller of the Currency compiled a list of the "Worst Ten in the Worst Ten"—the ten most egregious lenders in the ten areas with the highest foreclosure rates. Argent made the list in all ten cities, and Ameriquest in seven. For his efforts—he was also a big donor to the GOP—Arnall was rewarded by George W. Bush with an ambassadorship. Senator Obama raised the issue in his questions to Arnall, excerpted below.
"I mean, if you go through the record of the allegations that were made, they were allegations that I think most of us would consider to be very problematic," said Obama. "And I think I'm wondering whether it is appropriate for us to send someone to represent our country with these issues looming on the horizon."
"Thank you, Senator," Arnall replied. "I've read up on your background and I'm very impressed with your life history, and I can appreciate your concerns. I assure you, Senator, that I have absolutely nothing to do, nor does my wife, in terms of these negotiations."
Then Obama said, "I've gotten a couple of letters here from people who were previously antagonistic to Ameriquest's activities that are now writing letters of support, which I think is a testament to you and your capacity to win over and work with people who may or may now have been on the same side initially. I've got a letter from Deval Patrick, who actually is a good personal friend of mine . . ."
"As you know," Arnall replied, "he's a man of high integrity, and would not sit on my—on our board unless he felt that it was worthy of who he is and what he represents."
"Absolutely," said Obama.
Says one person who was fighting Arnall's nomination: "We were absolutely devastated. Here was a prominent African-American Democrat saying that this guy was giving opportunities to minorities, and providing cover for Democrats." On February 8, 2006, Arnall was confirmed by the Senate. The vote took place one month after the announcement of the $325 million settlement with the state attorneys. Press reports said that the payment "cleared the way" for Arnall's confirmation. One last time, Arnall's willingness to pay to make problems go away had served him well.
On the other hand, I'm only halfway through the book. Maybe some redemption will follow?