Fleming’s First Attack

I had forgotten that the GOP establishment is still pissed off by Paul Broun’s election and has decided to go after him with Barry Fleming.

Let me be clear and up front: I’ll play this race straight, but I stand behind Paul Broun 100% and I have every intention of putting RedState fully behind him.

Nonetheless, Barry Fleming is out attacking Broun for spend taxpayer dollars on constituent contact. From a campaign press release:

Roll Call Newspaper, a well respected Capitol Hill publication, recently printed the article, “Freshman Broun Facing Hard Georgia Contest,” by John McArdle. In this article, a spokesman for Paul Broun outlined the strength of his voter contact efforts. Broun directed his staff to spend more than $35,000 on 160,000 pieces of mail and countless intrusive robo-calls at the taxpayers’ expense according to congressional records.

It’s disappointing that a purist like Broun would do that, but let’s admit it is smart, legal politics, and Fleming is in a very weakened position being a part of the Army of Glenn in the Georgia House of Representatives.

37 comments

  1. drjay says:

    “I’ll play this race straight, but I stand behind Paul Broun 100% and I have every intention of putting RedState fully behind him.”

    how are those two assertions not in complete contradiction of eachother???

  2. IndyInjun says:

    How is Fleming vulnerable aside from his ranking membership in the GR camp?

    Just asking and not commenting….

  3. Donkey Kong says:

    “Let me be clear and up front: I’ll play this race straight, but I stand behind Paul Broun 100% and I have every intention of putting RedState fully behind him.”

    Thank you, Erick.

  4. Donkey Kong says:

    Oh, and Indy, I have officially joined the banker conspiracy. Had final round at my top choice yesterday and I’ll be there.

  5. IndyInjun says:

    DK,

    Make sure you have a bailing bucket – A BIG one.

    Congratulations – I think.

    Becoming a junior executive officer on the Titanic was then thought to be an honor too.

    Come to think on it – you probably are seen as being a bailing bucket.

    Finally, I hope it was not the reverse of Univ. of Tennessee’s star receiver from the year 1975. He was fast and they are gonna hafta be………

  6. Donkey Kong says:

    Indy,

    “Congratulations – I think.”
    Thanks! Honestly, I can’t tell you how excited I am.

    “Come to think on it – you probably are seen as being a bailing bucket.”

    Based on what desk I will likely be working on, even you would be surprised at how right you are. But companies hire people to solve problems so I am not at all surprised.

    Please do not compare me to anyone from UT. I can handle the many names people call me for entering my chosen profession, but comparing me to someone from UT is just crossing the line.

  7. I live in Paul Broun’s district, and have never received a robo call from Paul Broun. I have listened in on his telephone town hall meetings, and he is on the phone live. He asks us to give comments, suggestions, and questions on how he can best serve the district. If that costs him money, then I am thankful that he is spending our tax dollars to increase our communication with Washington DC. I have never seen a candidate that is so willing to hear from the people! And the people I talk to love to get a chance to talk to their Congressman. Thank you Paul Broun!!!!!!!

  8. John Konop says:

    Donkey Kong

    I have list of contacts always looking for mezzanine financing partners on deals and or direct participation from debt to equity. I deal with everyone from hedge funds, private
    placement and investment bankers. Feel free to contact me if it can help you.

    [email protected].

    GOOD LUCK!!!

  9. drjay says:

    i at least hope you see the irony of the fact that broun is the most ron paul like member of congress not named ron paul…

  10. Donkey Kong says:

    Thanks John. Honestly, I’m entering the business so low on the totem pole that there’s not much I can do in that regard. However, I plan on staying in the business for a while, so at some point in the future I may take you up on your offer.

  11. IndyInjun says:

    DK,

    I was being obtuse. Stanley Morgan was the great Volunteer. Reversing his name gets you to a firm with which I am acquainted, but not impressed much.

    Whichever of the firms you landed with will need good help to undo the damage that they have done to themselves, apart from getting the US government to bail them out.

    A word of caution though – those firms USED TO BE respected, but as the magnitude of what they have done to this country and its economy is exposed, it will be a very long time before the public and Main Street trust Wall Street.

    Promotion may come quickly as the top three levels of management will be lucky if they are not hanged in the aftermath of this corruption.

    None of this deals with Barry Fleming and I am struggling with this race.

  12. Donkey Kong says:

    Indy,

    I would prefer not to publicly name the firm I’m working for. Should we meet at some point, I’d be happy to divulge.

    “A word of caution though – those firms USED TO BE respected, but as the magnitude of what they have done to this country and its economy is exposed, it will be a very long time before the public and Main Street trust Wall Street.”

    I disagree. You could have said the same about banks following the S&L debacle, and trust was re-established in a short amount of time. Capital is scarce, Indy, and the banks have it. Approve or disapprove of Wall Street, and it certainly has its faults, WS has the capital that companies and individuals need. As long as doing business with Wall Street is of mutual benefit, and it is (if for no other reason, the depth of liquidity in the US markets provide incentive to bring business to NY), business will return to Wall Street in short order. I think you are overestimating the impact of the sub-prime imbroglio on Wall Street’s reputation. The mortgage brokers are bearing the brunt of the criticism. The only companies on Wall Street that receive substantial public scorn are the bond rating agencies, and rightfully so. They dropped the ball on this big-time. It was the AAA rating of the rating agencies that drove the demand for CDO’s/CLO’s in the first place — if the top tranches of these instruments did not receive AAA ratings, the demand for, and therefore issuance of, these complex securities would have substantially decreased. Banks were meeting the demand from investors for higher yield and were using tools available to them — such as bond insurance — to ensure their securities received AAA ratings. The problem is not that banks created these securities but that they were ranked AAA and therefore included in pension funds and money market funds where they did not belong. Banks are not at fault for this, the rating agencies are.

    “Promotion may come quickly as the top three levels of management will be lucky if they are not hanged in the aftermath of this corruption.”

    Depends on the firm. Lehman and Goldman seem safe at the moment due to their successful navigation of the subprime, though both are much more exposed to leveraged debt from deals they signed pre-credit crunch and to commercial real estate losses. They dodged the subprime bullet, but when the gun keeps firing, its only a matter of time before they are hit. The question is how much, and both firms have proven their ability to successfully manage risk, so my guess is their losses will total less than a few billion each.

    Vote Paul Broun. You seem much more libertarian and Paul Broun appears to be a Goldwater conservative — which means he will be vehemently opposed by the GOP establishment. You really want to support the establishment guy?

  13. John Konop says:

    Indy

    I have done business with many firms directly or indirectly. I know of many firms that did not fall into this trap. I also no people inside of the firms that avoided the crazy deals that other area in the firm did. As you know the money flow for turning your head away is very tempting.

    I think part of the problem is people get caught up in the life style and they made reckless decisions to keep up with the club. I think this created a blind eye attitude from people who should have used better judgment. As my dad taught it is not how much you make it is how much you save.

    I am not making excuses for people and some of my friends. Yet it is why I live low key. It makes it easier to make level headed decisions. This is the second down turn I have been in. And conservative business guys like me are vague and brilliant.

    The truth is in up times we are called poor team players and short sided. That is why I take it all in stride.

  14. Holly says:

    I like telephone townhalls. I’ve worked for Members who use them, and it’s more cost-effective than a trip to the district to do a series of traditional townhalls in different locations.

    That said, the Members I’ve worked for haven’t been willing to do a TTH per week plus mailers, because when you spend that much on outreach it starts to look like you’re trying to use the federal office to campaign, which is what was pointed out in the referenced Roll Call article.

  15. IndyInjun says:

    “Subprime” is a misnomer, being only a small subset of structured credit. Structured creditand derivatives are poison that Wall Street distributed far and wide.

    It is a contagion that is spreading by the week to every nook and cranny of the financial system. In this morning’s Wall Street Journal, they are wailing about accounting rules that make them mark to market, instead of marking to fantasy.

    The banks now “have capital” by virtue of the Fed’s TAF and by selling off huge chunks of ownership to the strategic investment funds of the oil states and Asian trading partners. Figures now show nonborrowed reserves to be negative, meaning that capital is borrowed.

    The tidal wave of inflation being launched as the totally shocking levels of money are created out of thin air by the Fed will finish off the middle class. The metals, energy, and food commodity markets are making hyperbolic moves as proof.

    Citibank and JP Morgan banks are toast without government bailouts.

    I was probably overly harsh as the idiotic loan-to-distribute model is now that of the local and regional banks. IF RE drop 20% they would normally go under, but they are investing in Treasuries and GSE debt. The GSEs will fail and will be bailed out, too.

    I told my banker yesterday that I was gonna start a bank. It is risk free. All liabilities are insured by the FDIC, so no one shoots you for stealing their money and all assets are insured as long as the proceeds from sold debt are investing in GSE debt. All I have to do is collect huge fees, risk free.

    This is not FREE MARKET enterprise. All rewards are privatized, while all risks are socialized. The pace and magnitude threat our nation and even more, our society.

    As for the Congressional race, one must bear in mind that I supported Whitehead earlier this year. Right now I am neutral on this race as Barry Fleming has done some positive things and some negative things, as has Broun.

  16. IndyInjun says:

    JK,

    We have a very, very similar world view.

    The peer and societal pressures are like raindrops off of a duck’s back. HOWEVER, being this way does not make me tolerant of breaking the rules at all.

    Yeah, and the “not a team player” bullshoot is something I have heard many, many times.

    When the ‘team’ is a band of 40 thieves, it is best not to ride with them.

  17. Donkey Kong says:

    Indy, neither of the aforementioned banks — Lehman and Goldman — needed any type of capital infusion.

    The others did, and they lost respect for it. Morgan Stanley in particular — they should have known better. John Mack is well respected, but he blew it BIG on this one.

    Keep in mind that products of finance, such as structured credit, are demand-driven. In a drive to increase yield, hedge funds have been a major force pushing for structured credit and increased leverage. It is a bank’s job to find a way to be the other side of transactions so that both sides make money. That’s why there’s such an emphasis on rethinking how banks have managed risk — from a bank’s perspective, the problem is not a particular transaction type but whether the entity has appropriately hedged the risk. All but LEH and GS did not. The forces behind the creation of these products — hedge funds, institutional investors, etc. — are not being given the attention they deserve for their role in this. I am not absolving WS of all guilt, but this was not some evil scheme by the greedy bankers to try to grab money. Investors demanded a higher return, and bankers created products to meet their demands. They were creative in putting these products together, using bond insurance and products with varying tranches to obtain a AAA rating on securities that would have never had this rating. Investors wanted this. Banks delivered. Now all are regretting. Investors forgot the fundamental relationship between risk and return, and it came back to bite hard.

    I agree the government bailouts are harmful. All it would take, IMO, is one major bank to fail — Citi, for example — for banks to start acting more judiciously. I’m game.

    BTW, JPM managed this crisis very well. It’s Citi and Merrill that would be in a very difficult spot were it not for sovereign wealth funds. Blankfein deserves banker of the year. Behind him, Dick Fuld. Jamie Dimon comes in 3rd.

  18. John Konop says:

    Donkey Kong & Indy

    The biggest problem is the increases in haircuts. Interest rates are only one small cost of money. The equity ratios are real rough now. That is why people with money do well in down times. This has an affect on margin calls, values……… Investors and making a bundle on bond buys the last few weeks.

    As for the economy when money is tight expansion is a real problem. That is why guys who can run a tight ship are in high demand.

    As far as the housing crisis if you help current buyer you hurt future buyers and people who did it right. This issue is a real catch 22 because as people foreclose it drives housing values down which drives the haircut problem via values.

    The concept of sending out money we do not have and driving debt up is insane! The problem is the debt to equity ratios and we are driving us further into debt and the government is competing with the private sector for money. How does this make any sense?

  19. IndyInjun says:

    DK,

    JPM has HALF of the total derivative exposure – nearly $7.7 trillion – of the rest of the banks combined.

    The demand of investors aside, just from a common sense accounting standpoint, the loan to distribute model was pure lunacy. The splicing, dicing, selling, and servicing resulted in the loan being one place, the asset holder in another, the debtor in another, and sometimes the collateral in another. When the charade blew up there is no cost effective ways to put the pieces back together.

    Proof that my observations were and are correct is that Deutschebank tried to foreclose on 15 homes in Ohio and could not prove that it owned the mortgages. Last week there was the same with a guy with a $1.5 mortgage in Florida. The WSJ reported that this is happening all over.

    Casting aside basic common sense to create such complexities that could never survive a downturn was wildly irresponsible, but the ‘senior managers’ saw the multiple layer of fees and the revenues bookable in advance under accrual accounting and ran with it.

    NOW the banks are being made whole by borrowing from the fed and putting up worthless collateral on loans that will be rolled over in perpetuity.

    DK, I am glad you will have the opportunity to straighten this mess out. There are gonna be a LOT of heads rolling at the upper levels before this is done, perhaps literally.

    In the sound financial spectrum, Paul Broun seems to be more responsible than Fleming.

    Go back to 2000 and 2004 and look who was contributing to Bush, then compare ‘the players’ to the financial houses at the epicenter of this crisis.

    We need no more irresponsible pols in DC.

  20. Donkey Kong says:

    “We need no more irresponsible pols in DC.”

    I believe the only way to achieve this would be to enter the eschaton.

  21. Romegaguy says:

    A person elected to city council but not sworn in supporting a congressman elected but also not sworn in. And some of you dont believe in the conspiracy…

  22. CHelf says:

    When I lived in that district I received quite a bit of franked mail from Norwood’s office. I don’t think contacting voters by the means they are given is wrong. But to think that this method has NEVER been used as a means for circumventing the rules on campaigning is naiive. Perhaps Barry Flemming would like to propose a limit on the money incumbents can use to contact their constituents? Would he like to be the one saying it is wrong to have members of Congress from contacting their constituents? Unless Roll Call has some proof of illegal or unethical activities, this is just another one of those “NYT-esque” articles implying something shady was done to cast doubt while never offering proof. Broun is a freshman member of Congress. EVERY newcomer makes every effort to get their name and agenda out there to the voters.

    Maybe Flemming should come up with a version of the Contract pledging things he will or will not do if elected. Perhaps no franked mail? Setting dollar limits on what he’d spend? No tele-town-halls? Would he rather focus on pork projects to campaign for? I’d say pork projects are spending quite a bit more money than phone calls and letters. We all know that earmarks are the best way of buying favor with voters. I’d hope his own state legislative record can match if not exceed this standard.

  23. GeorgiaEagle says:

    I just visited Fleming’s web site to see if the press release was there; it wasn’t.

    If Fleming is going to blow $700K on angry cry baby tactics then he deserves to go down in flames. Martinlutherstreet’s comments are instructive. If the people see Broun’s innovative outreach as really giving them a voice in DC and Fleming ratchets up the negative campaigning by attacking Broun’s outreach then this man is going to have a rude awakening come May.

    GE

  24. StevePerkins says:

    I’ve started getting fundraiser mailings from Broun in the past few week… talking about how much he opposes Hillary Clinton (So what? She’s in the Senate and you’re in the House), and how he opposes homosexuals getting “special rights”.

    Basically, in order to beat his establishment opponent, Broun felt he needed to BECOME an establishment candidate himself. Not ONE mention of anything remotely substantive… just Hillary and gays fearmongering. Goddamn I hate partisan politics.

  25. Goldwater Conservative says:

    I have yet to receive a robo-call, but I did get the “legistlative update” mail piece. Let me take a second catch my breath again…

    It was an amazing mail piece. Too bad the guy will not raise the money to pay for these kinds of things with his campaign accounts. Tom Price does the same thing. The real difference between Price and Broun’s pieces are cost and message. Price sends out post card sized updates with information about what has been done. Broun’s is a blatant campaign piece.

    I know a lot of the 10CDers think that Broun will hold on, but it is a pipe dream. If Whitehead would have left Augusta a dozen more times, or even 2 more times (GPB debate and the Tim Bryant show Debate) he would have won the seat in the special election. The anti-Whitehead sentiment is not going to exist with a salty and intelligent contender such as Barry Fleming. Broun is going to spend all of his money just to compete in the primary, Fleming will only have to spend about half of his.

    You never know though…as it stands it does not look like there will be a Democratic challenger. If anybody saw Saxon’s numbers…that guy will not have enough money to qualify for the ballot, forget about him competing. Athens Democrats put Broun in office (regrettably I might add) and they may very well make the same mistake again when they are forced to choose between two Republicans.

  26. Holly says:

    I think there needs to be some clarification on the robocalls. TTHs DO, in fact, use automated calls, so while martinlutherstreet is right that during the TTH Broun is on the line live, earlier in the day, the company who puts on the TTHs sends out a robocall to the call universe that lets people know there is a TTH later that day. Usually, it gives instructions on how to participate.

    Then, about 15 minutes before the scheduled time for the TTH, another call goes out. If you do not pick up the phone or opt not to participate, you get another automated message. However, if you join the call, you are connected to the event and can ask questions, etc.

    Charlie Norwood’s office did not do TTHs, so it’s really not surprising that some people are annoyed that Broun is calling their home twice in one day. They don’t really understand what TTHs are, and most of them probably don’t listen to the messages. They just know they’ve got automated calls on their answering machines from Paul Broun.

  27. Icarus says:

    From Ivan Maisel at ESPN.com:

    Georgia state rep Barry Fleming has figured out to deny his state a lot of money, all in the name of his beloved Dawgs.

    In the Peach State, any group that can guarantee the purchase of 1,000 license plates, with a $25 surcharge per, can get its own vanity plate. Florida alumni got out their checkbooks, and the state of Georgia has $25,000-plus of Gators money in its coffers. It’s also received at least that much from Clemson, Auburn and Alabama alums. That’s more than $100,000 from the wallets of fans who don’t like Georgia or Georgia Tech. Rep. Fleming introduced legislation that would require a reciprocal tag in any other state with a university that has a vanity license plate in the state of Georgia.

    I’ve heard of legislators who spend the people’s money like drunken sailors. I don’t recall hearing of legislators who work to shut off money from the people. What’s worse, the Georgia House passed the legislation, 142-10.

    As the song says, “Glory, glory to old Georgia.”

  28. Bill Simon says:

    I thought the lyrics were To Hell, To Hell, To Hell With Georgia…To Hell, To Hell, To Hell With Georgia…the cesspool of the South…

    2nd verse, same as the first.

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