A New York lawyer and Wall Street analyst respectively, bought a small California thrift in 1963 and built it into Golden West Bank (GDW). The company’s business was built on adjustable rate mortgages (ARMs) which were mortgages offered at low “teaser” rates that ratcheted upward as interest rates increased. They were often sold aggressively to unsophisticated home buyers who did not comprehend the vast financial risks they were taking, or who assumed that housing prices would rise high enough to provide a profit to them when they sold their houses. After selling GDW to Wachovia in one of the worst acquisitions of all time, the Sandler’s began their life as ‘philanthropists in the form of George Soros, starting the non-profit, leftist propaganda outlet, Propublica, and funding several leftist organizations and politicians in an effort to fundamentally change American culture to the far left.
The ARM’s were targets for lenders peddling mortgages that should have been stamped with a skull and crossbones, for these were among the most seductive and dangerous types of mortgage. This book of business is the core reason for Wachovia’s failure shortly after merging with Golden West. The Sandlers knew their business far better than any other person could. Not only were they the founders and major owners, they famously ran the company as a husband and wife team for all these years. So why did they happen to cash out at precisely the right time? Did they see the handwriting on the wall, realizing the massive risks inherent in the mortgages they originated throughout one of the most overheated real estate markets in the nation’s history? When smart people cash in some of their chips, it’s rarely a good time to bet against them. Nevertheless, Wachovia bet 24 billion dollars and lost big time. The Sandlers came away from the Wachovia debacle without accusations of wrongdoing and with about $2.4 billion, of which $1.3 billion went into their family foundation.
The collapse was primarily caused by the GDW purchase, which became an albatross around Wachovia’s neck soon after the purchase. “Wachovia found itself in ARM’s Way” was the headline of a Wall Street Journal article. A huge percentage of these Wachovia ARMs were made to deep subprime borrowers with very poor credit scores. Most of these were “inherited from its ill-timed acquisition of Golden West” at the end of the housing boom in 2006.
The Sandlers began to invest their billions of dollars politically, in the manner of George Soros. Soros, Peter Lewis, Tom Steyer and the Sandlers form a core group of billionaire activists and Democrat partisans who have formed a group called The Democracy Alliance. They realized that they could magnify their power by working in unison and tapping other wealthy donors to further their agenda (the superb Boston Globe article “Follow the money” is a good primer on how money and 527 groups have come together to have a huge impact on politics in America).
Among the beneficiaries of their largesse: Air America, ACORN (a group that has a long history of engaging in voter fraud), Citizens for Responsibility and Ethics in Washington (basically a private detective group focused on the private faults and foibles of Republicans), Media Matters, a media watchdog group that engages in harsh partisan attacks against media figures and articles it considers supportive of Republicans),their own fake news outlet ProPublica, John Podesta’s Center for American Progress, Human Rights Watch, the American Civil Liberties Union, and the list goes on and on.
They are not merely out to elect Democrats, but to also permanently realign U.S. politics and shift our society and culture in a far-left wing direction.
One of the steps the Sandlers took on their own was to start ProPublica with a 10 million dollar donation, a sum which they have replenish annually. This is an outfit that engages in ‘investigative journalism’ and will provide its “findings” to larger media outlets for greater impact at no cost. American Thinker was among the first outlets to express wariness over ProPublica and the approach it would take given the ideology of its founding couple. Even Jane Mayer of the New Yorker described the Sandlers as hard-core partisans. Other publications shared our concern about ProPublica. Investor’s Business Daily commented in an editorial:
Could a couple of left-wing billionaires really be sincere about creating a “nonpartisan,” “non-ideological” center for investigative reporting? Or is the pair just paying more to drive the media agenda further left?
One problem: The Sandlers fund both leftist causes and the Democratic Party. In fact, they rank in the top tier of donors. In 2004 they gave MoveOn.org $2.5 million, or as much money as their philanthropic ally, George Soros.
Along with Soros and billionaire Peter Lewis, the Sandlers fund some of the most important players of what is now known as the “progressive” left. In 2003, the three together funded about a third of the Center for American Progress think tank, which has close staff ties to Hillary Clinton.
Now if this enterprise were called a “progressive” nonprofit, as other projects are, it wouldn’t be news. But given the chairmanship of Herbert Sandler, and Steiger’s claim that ProPublica will be run according to the “strictest standards of journalistic impartiality and fairness,” there’s reason to wonder if this isn’t a new bid to drive the political agenda leftward under media disguise.
“We will look hard at the critical functions of business and government, the two biggest centers of power, in areas ranging from product safety to securities fraud, from flaws in our system of criminal justice to practices that undermine fair elections,” its Web site says.
I would be very surprised indeed if the malfeasance of ACORN will ever be investigated by Publica, for its undermining of fair elections.
Unsurprisingly, though, ProPublica has shown that agenda-driven journalism is its founding principle. One of its first pieces of “investigative journalism” was an attack on the oil and gas industry for developing the Marcellus Shale (a vast natural gas reservoir located in northeast America). ProPublica reported that developing this domestic energy source would damage the environment and advocated that these resources not be developed.
Maybe the Sandlers are helping their political ally George Soros, a hedge fund manager who runs an offshore fund whose investors may well include some of the world’s wealthiest and most anti-American petrocats. Shielded from scrutiny by offshore operations, the names of Soros’s investors are a closely-guarded secret. But perhaps more than a few of them would look askance at expedited development of our own energy resources. We would be less dependent on petrodollar rich abroad, and the price of oil and gas would weaken, should domestic energy resources like the Marcellus Shale be developed.
While the Sandlers personally made 2.4 billion dollars on the 24 billion dollar sale of Golden West Financial to Wachovia, the employees (including their own former employees) and shareholders of Wachovia, including those who have invested their retirement money and children’s college funds in Wachovia stock and bonds, are not doing nearly so well. Communities where Wachovia has branches that may be closed as a cost-saving measure will also suffer. But worst hurt of all will be the homeowners who were sold mortgages that they should have never been offered, by a lender far more sophisticated than they were.
And here I thought that Democrat partisans were supposed to protect the little people.
So far as I know, the Sandlers have not offered to reinvest any of their gains into Wachovia to help it recover. It appears to be far more fun taking those ill-begotten billions and use them to fund an ever-expanding “left-wing conspiracy.”
Keep an eye on the Sandlers if Barack Obama becomes President. As I wrote, they know about leverage.
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