tv Inside Story Al Jazeera January 20, 2016 6:30pm-7:01pm EST
>> this is what innovation looks like. >> i feel like we're making an impact. >> let's do it. >> techknow, where technology meets humanity. only on al jazeera america. >> long disdained regulation of big finance, railed against the interference of the government in operations of big banks, and he has also taken large campaign loans from his wife's employer, goldman sachs. what do companies like goldman the? and did they get it from the freshman senator from texas? what do they say about the relationship between witnesses and campaigns? how cruz plays the game. it's the "inside story".
welcome to "inside story". i'm ray suarez. senator ted cruz, republican of texas, has slowly been shrinking donald trump's leads in early primary it states. he's in his first term of the senate, after winning over the republican favorite and establishment and senior senator, john cornic, after just two years, the 45-year-old began running for president. from the solisser general of texas to frontrunner, took a disciplined candidate and a lot of money. like many republicans, cruz opposed campaign finance laws already on the books. in 2014, he introduced a bill to repeal the campaign act of
1971, that created the modern finance disclosure system. recently, the times reported that senator cruz had borrowed half a million dollars from goldman sachs and another from citigroup to fund his it texas senate it seat. the loans don't quite square of a story of a campaign funded by cruz and his wife, liquidating their personal assets to run, and federal reporting regulations. noting that the loans appear on some required documents and not others, senator cruz dismissed it as paperwork errors, and they drew attention to his wife, heidi's job as managing director at goldma goldman sach. where cruz the candidate and
cruz the senator, with wall street generally. last year, the day after he announced his campaign, cruz was asked specifically about goldman sachs and his place in society. this is before we knew about the loans. cruz starts off reluctant, targeting wall street more broadly. >> goldman sachs, are they a positive or negative force on balance. >> like any institution, there's some of both. >> what's the negative? >> my view of wall street and big business in general -- look, goldman is one of the biggest banks on wall street, and my criticism with washington is they engage in crony capitalism and give favors to candidates, and that's why i'm an out spoken candidate, taking on leaders in both parties. >> cruz referring to the
federal reserve loaning massive amounts of money at virtually no cost to wall street and other firms. but if we pick up cruz's answer where we left off, you'll see it from the left against wall street, that the firms don't make or build anything. they use their easy access to capital, leveraging the protection that the government gives them to minimize risk and make more money for clients. and it suggests that the remedy is not just for government help for wall street, but to get out of way, even if what they're building is more wealth for the wealthy. >> i think big business, if they're building a better mousetrap, great. but i it shouldern be government favoring. let me give you an example. dodd/frank, sold to the american people as too big to fail. and what happened? goldman has gotten bigger because of the burden. >> why the force?
because they get government help? >> because like many of the players and big business, they seek out and get special favors from government. i think that they're entitled to practice their business but without the special subsidies. >> in fact, goldman sachs would have considered it a very special favor if dodd/frank were gone, which is what cruz proposed. we know that it goldman sachs wants them gone because they spent $800,000 lobbying the government, including the senate, against implementation of dodd/frank, and that was just in the third quarter of last year. cruz has also advoicated doing away with the federal protection bureau, placing them in the cross-hairs. goldman sachs would also consider it a special favor if companies could no longer be fined for their regulatory of violations, which cruz has
proposed, but would not come in time to save the company from the $5.1 billion settlement they reached last week for their practices leading up to the mortgage crisis. it mirrors the relationship between the tea party and wall street more broadly. it's complicated. especially when the politician runs for president. joining me here in washington, paul ryan, deputy executive director of the campaign legal center. mark, director at the kao institute. aalexis goldstein, and paul ryan, let me start with you. what does the law say about this financial transaction between chartered, regular institution, or a campaign for federal laws? >> when a candidate from a
federal office takes out a loan to help finance their campaign, they have to report to the federal election commission and in turn to the general public that that money came from a bank, and not, for example, from the personal savings of that candidate. and cruz failed to report that he got somewhere between $1 million from two different financial institution it's to help bankroll his campaign. >> did he fail overall? or one set or another? >> no, multiple filings, this is ongoing, from the time that he took out the loan to the time it's paid off, they have to be accurately to the fcc, they should have been filed differently in july, 2012, preelection for 2012, pre-runoff for the 2012, october, 2012, and these are multiple reports that were incredible filed. >> alexis goldstein, what's
this law for? to prevent? >> dodd/frank is a multi -- there are a lot of different pieces to it, and the two pieces, the volker rule, that says that if you're a large bank that enjoys banking and fdic insurance, you don't get to gamble with your own money, which could put the entire country at risk before the financial crisis. and the only federal regulator that's solely dedicate to looking out for consumers, and making sure that they're not victim to financial scams. that's their sole mission, and then one other piece which says that dodd/frank attracts federal regulators. if a bank is too big to fail with out harming the overall committee, they're supposed to break it up. and that's the livings will provision. so dodd/frank has a lot of
pieces that direct to make sure that the banks are not too big to fail, and whether the regulators are not properly following it. >> jumping ahead a little bit, mark call abrilla, why does this regulation that the senator was asked and all candidates are asked to comply with, what's it meant to prevent? >> we have the fdc rules, so the public can have an eye on the senators, and and there are other questions on what assets your spouse may hold, and there are all sorts of things, and what we don't know about that are consolidate. but again, this is a disclosure regime where the public gets to find out what's going in terms of campaigns and finance, and
the argument of course is that if you have accurate information, you, the american public, make up your mind. >> so it's transparency, and people can know. >> exactly. >> so is this a big deal or not a big deal? you've been writing about this, zack cart. >> i don't think that it's a huge problem for the cruz campaign. but it's a different party matter. ted cruz's brand that he has made to the american people is outside of the establishment, and he doesn't mean mitch mcconnell and cocktail parties at his house, but he's talking about the entire donor class of everybody in washington for the last 15 years. when you take out goldman sachs, you're closely connected to that class of people. an outsider who is not connect to those people, i think that that pitch is much harder to make s. that's why you've seen
>> mark calabria, and alexis gold teen and mark are with me. and mark, why do they give lots of money to politicians? that's the core thing, right? they have to have some reason why. >> that's a very good question, and i don't think that it's the obvious answer. obviously, favors, and surprisingly to me, we have a number of candidates, a number of interest groups got nothing. and it's across the table. it's much more complicated this year, and i don't think that it's what you necessarily do get. but you get access. and certainly my experience on
the hill is far more than anybody else, what the constituents get. what they want. so my position is that the congressmen and senators are going to dominate who they represent. and they put their state ahead of the national interest. so i don't think that they need to give the center in iowa any money for ethanol. and you represent wall street, and this is where i'll give hilliary clinton her credit, in the past. -- so again, my experience at capitol hill, the money is not irrelevant. but what's far more power, the constituents, and that's a far more powerful drive. >> they put out a lot of money, and can you draw a line from an
institution to a legislature when ted cruz is able to get loans under very preferential circumstances compared to other customers. has he done for the u.s. senate what he has done for goldman sachs? >> i think that the rest of the banking industry overall, as you said, the consumer financial protection bureau, which is a regulator that has turned over $11 billion to over 25 million americans who have been scammed by their financial companies. and he has been called by dodd/frank to make the system safer and more transer parent. and he said that we should completely repeal that compared to obamacare finance, and it completely neglects the fact that there should be more regulation on wall street and not less, and that polling is consistent across democrats and republicans. >> but is that just association
al paul ryan? there are probably a lot of senators with that same profile, and gaining that support because they already hold that position, rather than holding that position in order to gain the support. >> the campaign legal center in the voting in texas, they did not know that the candidate out there bashing goldman sachs and telling the story on the campaign trail, he didn't liquidate any assets, and running through the ads to the texas senate primary. that the what the supreme court has said for decades. eight of this court's nine members have said repeatedly, the voters have the right to know where the candidates are getting their money so the voters can judge the credibility of candidates. that's the point of the
transparency here. he said in recent days, no harm, no follow. we reported this on the senate reports. that report was filed in 2013, long after the election was over, and did not give specific information about the amount of the loans. and the voters had no way of knowing when senator cruz was running for office that this money was coming from goldman sachs, and that's what we're worried b. holding the candidates accountable. >> let's take paul at his word, that these are infractions. is it hard n. your line of work, to show a quid pro quo? to say, this is what was wanted, this was what was gotten. is this really the devil that's in all of these stories? >> i think that it's difficult to show direct correlation between a specific donation and a specific political outcome. they can be up in the air. if you introduce a bill or vote for a bill, it doesn't mean
that it gets implemented. but just because you can't find a direct correlation between a donation and a result, doesn't mean that they can hijack the agenda. most of 2013, they were engaged in this bizarre thing, going over and over through different types of legislation that would chip away with dodd/frank, and eventually, one of these things was going to get through. and they didn't expect every bill to be something that was public policy, but eventually, something did slip through, in 2014. and there are a lot of other things that the public could be looking at. >> you'll tell us what they are after the break, and that's where we'll continue with our look goldman sachs and ted cruz and citigroup and the law. it's "inside story".
>> welcome back to inside inside. i'm ray suarez. how cruz plays the game, this time on the program. and the world was stun by the revelation that ted cruz and his wife, goldman sachs goldman borrowed $1 million for his senate run, and now cruz has called if nothing more than a paperwork error. what does it tell us about the intent of campaign finance allows and the influence of big money? my guests are with me here in washington. and you were telling us about the attempts to pull down dodd/frank, and they were extreme not successful, so what's the point? >> this is -- in 2015, they were not successful, but in 2014, they were. and this is not a part zan thing. it's not like ted cruz is the only person who takes money
from wall street and goes to washington. jim heinz, a democrat from connecticut, pushed a bill, and essentially what it did, it subsidized risky trading. now, that bill -- it was clearly written by i [ no audio ] it's number one, for school reform, or environmental issues on the campaign trail, but it was a bill that he put forward and he made it into law as one of the big year end budget packages that congress does every year. >> was he a recipient of financial donations? >> yes, as are all democrats in the republican party. >> they put out a report called payday to play, which documented all of the campaign contributions that the politicians got from the payday industry, and the bills that were favorable to the payday
industry. so in some cases, you can draw a pretty direct line. >> was it a direct line as oppose to someone you know is against you, you look across at the 135 seats in one chamber, and say that we know we're going to give money to who we know are on our side. >> we should not forget that goldman sachs endorse today. and the ceo has protect from his competition. there are plenty of reasons to dislike or like ted cruz. in my opinion, he's way too hawkish for my own taste. but if you are or are not going to like him. but let's prebade that he's the goldman manshurian candidate. what's the first thing that he would try to do? get on the banking committee. no. zero effort, zero interest. go to congress.gov and pull up
the bills that he has introduced. ask it's all public knowledge. he has introduced one bill referred to the banking committee currently as structured, goldman has nothing to do with t it's not about wall street lending, it's about retail lending. >> which they're getting into it. >> we don't know. >> $20 billion online lending. >> of course that has -- >> had helped to finance other retail lenders though. >> not under the direction of the capd. it's about retail lending, and let me go through a couple of things that i think are important to keep in mind. again, not making a defense of cruz or anybody else, but they're legitimate disagreements, and we know in the writing of dodd/frank, to be cleared, the fact that chris dodd's wife sad on the board of several organizations that
should have made news, that chris dodd's chief council was trading day stocks while it was being written. that didn't make the news, and didn't make a news that they took money from the trial bar, and this makes a tremendous amount in legislation. who benefits from the decision? the trial bar. so there are lots of lines that you can draw her here and i thik that you need it think about all of this, but the dodd/frank, the people on the committee. where was maxine waters during the crisis? she was lobbying for her husband's bank to be bailed out. >> ryan, i want to give you the last shot here. these are all things that he just named, that fly under the radar for the requirements for federal law. >> we talked a little bit this afternoon about how it's difficult to draw lines x. direct connections between campaign contributions and
political outcomes. and it's precisely that it's so hard to draw those lines in particular that we need these transparency laws. what the supreme court has said over and over, let the voters decide before the election, and we need more disclosure laws so this kind of activity doesn't fly under the radar. >> i want to thank my guests. paul ryan, mark calabria, alexis goldstein and zach carte. i'll be back with a final thought on money, and quid pro questions. the only way to get better is to challenge yourself,
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>> getting mad at banks for seeking advantage in the regulatory regime is like getting mad at sharks or eating fish. but if you're a rank-and-file citizen, just watching the interplay of forces and interests in this society, you have to just hope that other interests, heading into the scrum with their elbows out, and banks don't get it all their way. u.s. has long had suspicion of banks and bankers, and res ling matches over the establishment
of a national bank. the hatred for banks and similarities in the second half of the century, to leave penniless, or the central bank, the federal reserve, and it's unelected leaders, somehow aloof from the checks and balances of the federal government. vanderbilt, carnegie, rockefeller, all of them sought crafted legislation that allowed them to do their business in the most profitable way possible. maybe the ease in america comes from the fact that finance, making money with money, instead of laying steel, pumping oil, and laying track, has become so much activity, that it was inevitable this they were going to exert influence on our politics as
well. checks and balances matter, otherwise you're getting mad at that shark. i'm ray suarez, and that's the "inside story". >> this is aljazeera america, i'm tony harris. the plunge on volatility on the market. the dow tumbles over the price of oil. not enough. the mayor of flint, michigan, said that the city needs way more to fix the water crisis. the timing was no coincidence. the hottest on record. the earth is warmer than it has ever been, possibly more than 1 million years.