by David DeCleene and Andrew Walden
With the exception of Dan Inouye’s Central Pacific Bank, whose $135M bailout is leaving the US Treasury with a $63M loss, Hawaii banks and Hawaii’s housing sector largely avoided subprime mortgage lending. As a result, Hawaii’s foreclosure rate has lagged far behind that of sub-prime hotbeds such as Nevada, California and Florida. Forbes calls Bank of Hawaii the nation’s top-rated bank. In spite of all the foreclosures, thousands more Hawaii homeowners are still in their homes because local banks eschew the mainland subprime lending policies foisted upon them via a series of laws beginning with the 1977 federal “Community Reinvestment Act.”
But Hawaii’s political leaders are working to change all of that.
Rallying at the capitol March 20 for HB1033, creating a State-owned 'clean energy' bank, Governor Neil Abercrombie was joined by self-described communist, ousted Obama Administration ‘Green Jobs‘ Czar Van Jones.
As Jones strode to the podium, the Chicago-style ‘community organizer’ swept away all the soothing references to North Dakota used to foist its one of a kind state-owned bank on Hawaii. Taking the microphone, Jones bellowed:
“...the American fantasy... is turning out to be the American nightmare. It is dying out on its own accord - it deserves no defense and it will get no defense. I am glad that is going away."
The rally was co-sponsored by MRC Greenwood's University of Hawaii, Pierre Omidyar's Kanu Hawaii group, the Sierra Club, Surfrider, the green energy scammers' "Blue Planet Foundation', Unite Here Local 5. Faith Action for Community Equity (FACE) co-chaired the event.
In an online biography, FACE Executive Director Drew Astolfi, who sits on the board of the Catholic Office of Social Ministry's Coordinating Task Force for Affordable Housing, lists former State Senator Bob Nakata, and communist murderer Leon Trotsky among those who "inspire his organizing." Van Jones' "Standing Together to Organize a Revolutionary Movement" pronounced "we agreed with Lenin's analysis of the state and the party ... and we found inspiration in the revolutionary strategies developed by Third World revolutionaries like Mao Zedong."
But it would be a disservice to stop there. Trotsky, Lenin, and Mao have been replaced by a newer generation of dead Marxists with names like Shel Trapp and Gale Cincotta—creators of the Community Reinvestment Act.
Among the immediate disciples of 'community organizer' Saul Alinsky, Trapp and Cincotta together founded the National Training and Information Center to carry on Alinsky's legacy. Astolfi describes FACE as "an Alinsky style community organization...."
On Trapp's memorial website, Astolfi tells the story of how they met. His account is peppered with the acronyms of Alinsky’s Chicago-based organizing foundations:
I met him in NTIC – the office was a nicotine haze – you had to feel your way through it over to his desk. He was in front of a big map of the US that had yellowed with age. He was spitting into the garbage can when I came over. I tried to ignore that. We talked for a while, and I asked him what advice he had for me - I was thinking about leaving ONE. Where could I go? “You sound interesting” he said, “but what you got to get through your head is – church based organizing sucks. It doesn’t do anything.” It’s hard to say how much he shocked me, here was this guy spitting into a garbage can telling me that everything Mike Gecan and company had told me was a fairy tale…it was about bamboozling funders and church leaders – but not about changing anything. This resonated a lot with me though – I had been frustrated by the failure of ONE in those days to use power. He invited me to NPA and told me to stay in touch. Then he introduced me to Gordon Mayer. Class dismissed. The next time I talked to him I was at NPA, and he assigned me to Shurna and told him to let me in on the scouting of a hit…I was dazzled – it was like Mardi Gras, the revolution, and a noir movie all rolled into 36 hours. I was hooked. At the end he asked how I liked it – and I babbled something about liking it a lot. Afterwards I wished I’d said it changed my life. It did. Never told you that Trapp – by now I’d be selling insurance or managing a Barnes and Noble if it wasn’t for that first NPA.
In spite of his 'life-changing' relationship with the co-creator of CRA, in response to a question, Astolfi tells David DeCleene the State-owned bank would somehow be different:
CRA is really focused on access to credit - it only mandates that banks lend in zip codes that they take deposits in. The people who passed it - Shel Trapp, John Taylor, and Gale Cincotta were trying to stop the redlining of their neighborhoods. This was back in the late 60's early 70's when that was a MUCH bigger problem than it is today. I guess the thing I learned from them was that credit is the life's blood of communities, and to pay attention to what the banks are doing since their lending policies has a such a big effect on the way we all live.
I don't think that CRA applies much to the state bank discussion, since the state bank is really aimed at addressing a different set of problems.
But Astolfi then proceeds to describe a Hawaii version of the laws which followed from CRA to shake down sub-prime bank loans creating the mortgage crisis and the 2008 economic collapse:
The state bank proposes putting the state's tax revenue into an entity that the state controls, rather than the mix of local and interstate banks it puts that money in now....
Certainly no one can obligate a bank to make a loan - but if they don't, we as a state don't have to give them our tax deposits.
...a state bank could offer to purchase the troubled mortgages ....
Astolfi didn't mention the other category of state-owned bank lending being proposed--green energy scams. He continues:
Finally on the set up of a state bank if we ever get there I think it should be set up by some fiscally conservative bankers, not so much by FACE. If I was selecting the board (unlikely to say the least) I'd ask people like Don Horner, Donna Tanoue, or Walter Dodds to set it up. I'd also ask the guys in North Dakota to help us. It's ironic but a number of the people opposing the idea are the people I'd trust to run it.
But "fiscally conservative bankers" are not on the state-owned bank board of directors proposed under bills now before the legislature. The most recent version of HB 1033, the so-called "Clean Energy Bank" allows for a politically appointed board with only a minority of token ex-bankers on a board dominated by political hacks, union bosses, and profitable nonprofits:
Its function is to launch a new version of the Act 215/221 Tax Credit scams through the sale of 'clean energy' Tax Credit Bonds known as CREBs. The CRA is written into the text. At risk: As much of the General Fund as the Legislature and Governor see fit to deposit. As stated in HB1033:
The members of the board shall include representatives of the financial, business, labor union, and nonprofit sectors. At least three members shall be current or former officers of banks or credit unions incorporated in the State.
The bank may accept deposits of public funds. All income earned by the bank for its own account on public funds shall be credited to and become a part of the revenues and income of the bank; provided that a public official who has control of the public funds deposited in the bank shall be exempt from liability for any loss of the funds...
The bank may raise capital through issuing its own bonds or notes, including tax-exempt and tax credit bond offerings, such as qualified energy conservation bonds and similar instruments, and small denomination clean economy bonds available for purchase by consumers on a retail basis. The bank may borrow from commercial lenders.
In consultation with existing community development financial institutions, local community development organizations, and appropriate community stakeholders, one or more subsidiaries of the bank may seek to qualify as a community development financial institution and be eligible for funding from the community development financial institution fund administered by the United States Department of Treasury. Upon qualification and designation as a community development financial institution, the subsidiary shall, subject to applicable federal law, be eligible to receive discount loans from banks seeking to meet their community reinvestment act obligations...
As Stanley Kurtz explains in his book Radical in Chief: "When we narrate the history of Chicago's leftist foundations, we are actually tracing the financial outlines of modern American socialism."