Friday, August 31, 2012

Joe Kennedy III's Marshall Group and Bain Capital Campaign Contributors

If you check out the Center for Responsive Politics’ Open Secrets website, you’ll notice that among the top financial contributors to Joe Kennedy III’s current campaign to win election as Brookline’s representative in the U.S. Congress is a Marshall Financial Group executive named Dennis M. Mathisen—who lives in Las Vegas, Nevada. On Feb. 21, 2012, for example, Mathisen made two campaign contributions, totaling $12,500, to Joe Kennedy III’s campaign committee. And, in addition, another Marshall Financial Group executive who lives in Cohassen, Minnesota, named Peter M. Mathisen, made two campaign contributions, totaling $7,500, to Joe Kennedy III’s campaign fund between Feb. 8 and Feb. 14, 2012.

Coincidentally, an article, titled “Collapse of a Loan Powerhouse,” by investigative reporter Jennifer Bjorhus—which was posted on the Minneapolis Star-Tribune website on Sept. 1, 2010, contains the following reference to the apparent involvement of Dennis Mathisen and his Marshall Financial Group’s failed BankFirst and Marshall Bank subsidiaries in the U.S. banking industry’s sub-prime mortage scandal that helped trigger the post-2008 U.S. economic recession:

“…In addition to the failure of its own banks -- BankFirst and Marshall Bank -- Marshall loans helped wipe out at least six other small banks across the country…according to bankers and federal regulators….Marshall's driving force, Chairman Dennis Mathisen, staunchly defends the organization as a victim of the country's real estate collapse, nothing more.

“But interviews with bankers who worked with the organization, former employees, a growing cache of court documents and the reviews of bank regulators themselves show that the organization's problems went much deeper. BankFirst, for instance, had a `large volume’ of poorly underwritten loans in an 18-month period that started shortly after Mathisen bought the bank, regulators concluded.

“In 2003, under Mathisen's leadership, Marshall snapped up a small Minnesota bank… and renamed it Marshall Bank. In early 2005, Marshall bought BankFirst in Sioux Falls, S.D....Critics accuse the Marshall organization of reckless lending. Whether a loan failed didn't affect the organization's upfront fees or commissions to the team that originated the loans or the team that sold them to participating banks -- a point regulators made when they reviewed BankFirst's failure….

“The Marshall ripple effect is still on the FDIC's radar, said an FDIC official, speaking on condition of anonymity. He said regulators have identified five failed banks in which bad BankFirst loans were a `material’ percentage of the bank's capital and played a role in their demise: Bank of Wyoming in Thermopolis, Wyo.; Venture Bank in Lacey, Wash.; Mutual Bank in Harvey, Ill.; MetroPacific in Irvine, Calif., and First State Bank of Flagstaff, Ariz….

“In 2007 regulators ordered BankFirst to stop syndicating loans….Regulators shut BankFirst down for good…

"…BankFirst's losses stemmed from `pervasive internal control deficiencies,’ according to a damning 37-page report that the internal watchdog arm of the Federal Reserve Bank released in February [2010].

“The problems included such things as not managing risk, poor loan underwriting and a pay structure that rewarded excessive risk-taking. Loan originators were paid commissions based on the size of the loans, not on quality and with no repercussions if the loan went bad….

“Mathisen dismisses as a formality the letter the FDIC sent him and other BankFirst executives and directors in March [2010], demanding that they help pay for the losses that the FDIC's insurance fund incurred as a result of the bank's failure…. “
Besides accepting thousands of dollars in campaign contributions from Dennis Mathisen and Peter Mathisen, Joe Kennedy III’s campaign also accepted a $5,000 campaign contribution on Mar. 31, 2012 from the Managing Partner and Chief Investment Officer of Bain Capital’s Sankaty Advisors fixed income and credit affiliate, Jonathan Lavine. Most of the $2.5 million in campaign contributions that Bain Capital executives have made since January 2011 have gone to fund the campaigns of Republican Party candidates. But besides helping to fund Joe Kennedy III’s run for Congress, Bain Capital executive Lavine (who also sits on the board of trustees of Columbia University and is a Director of the Boston Celtics) has also contributed another $50,000 since January 2011 to support the campaigns of other Democratic Party candidates. On June 27, 2011, for example, Lavine made a $30,800 campaign contribution to the DNC Services Corporation; and on Mar. 9, 2011 Lavine made a $19,200 campaign contribution to the Democratic Congressional Campaign Committee.

In addition to receiving campaign contributions from Marshall Financial Group and Bain Capital executives, Joe Kennedy III’s campaign committee also received: two contributions, totaling $7,500, from Boston real estate developer Robert Beal on Jan. 30, 2012; a $5,000 contribution from Casablanca Capital executive Donald Drapkin of New York on Feb. 16, 2012; a $5,000 contribution from Starwood Capital executive Madison Grose of Greenwich, Connecticut on April 30, 2012; a $5,000 contribution from Kramer Capital LLC executive Donald Kramer of Greenwich, Connecticut on Mar. 29, 2012; a $5,000 contribution from Carlyle Group executive Perre Sarkozy of New York City on Apr. 11, 2012; and a $5,000 contribution from Billionaire Viacom executive Sumner Redstone of Beverly Hills, California on Mar. 31, 2012.

So don’t be surprised if the Kennedy Dynasty’s latest candidate for Congress ends up representing the special, private economic interests of the Marshall Financial group, Bain Capital and “the 1 percent” of the U.S. population (that has apparently been bankrolling his election campaign since 2011) if he takes over Barney Frank’s seat in the House of Representatives—instead of representing the public interest of 99 percent of the people who live and vote in Brookline.

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