Friday, June 18, 2010

David Malpass and Bear Stearns

I just received an e-mail from Robert Cole of the David Malpass for Senate campaign.  Obviously, Malpass is preferable to Gillibrand and most likely to the GOP's Bruce Blakeman.  The Sun has endorsed him.  He has free market credentials.  My problem with him is his association with Bear Stearns. The firm was allowed to die, but that doesn't change the likelihood that his years on the Street have shaped Malpass's attitudes toward government welfare for bankers.  I wrote  Mr. Cole the following message:

Dear Rob: I wrote to the Malpass campaign via its secure e-mail server and no one responded. Perhaps you can answer my question. I'd like to support Mr. Malpass because of the New York Sun's endorsement but I have one concern, which is his association with Bear Stearns. What is his position on (a) the bailout of 2008-9 (b) the Fed (c) further subsidies to banking. Thanks, Mitchell Langbert.

Cole's e-mail follows:

----- Original Message -----

From: Rob Cole

Sent: Thursday, June 17, 2010 6:10 PM
Subject: The Strategy
Dear Mitchell,

This is Rob Cole, David Malpass’ senior campaign advisor – and partner with The Shawmut Group, which most recently guided now-Senator Scott Brown’s campaign to victory. I’m writing you today to ask for your support – financial or otherwise – and give you an update on where things stand with David’s campaign for U.S. Senator here in New York.


Considering that David has never run for office, the rate at which his campaign has gained momentum since he announced his candidacy in mid-April has been miraculous.

A skilled economist, a former Treasury and State Department official with top-secret security clearance, and a political outsider who nevertheless possesses a deep understanding of federal budgeting issues – David Malpass has unique strengths that make him an ideal candidate for U.S. Senate at a time when concerns about the economy and dissatisfaction with the elected officials are at an all-time high.

David emerged from the June 1-3 GOP convention firing on all pistons – he won the support of 33 out of 62 counties, and handily secured a primary ballot spot.

The outcome of the convention was very encouraging, as it evidenced that David has strong appeal within the party, and proved that he has the political skills necessary to wage an aggressive campaign.

In the past two months, David has traveled to nearly every county in New York, and spoken with thousands of people along the way. The feedback has been consistent:

Job growth and national security are the most pressing issues;

The people of New York are not satisfied with their current representation, and they are angered by Kirsten Gillibrand’s unconditional support of Obama’s costly agenda to expand the federal government;

The time has come for upheaval against Washington’s tax-and-spend culture.

David has the right message to prevail in November.

David’s supporters are growing more numerous by the day, and speaking with their pocket books. Within 24 hours of David announcing that he had won one a place on the primary ballot, the campaign received over $100,000 in contributions.

This summer, we are going to be campaigning hard all across the state – through direct mail and the internet, at county fairs, on radio and TV shows.

Given that there are just under two months between the primary and the November 4th general election, David will need to campaign for both simultaneously. That means not giving unelected incumbent Kirsten Gillibrand the free ride the White House thinks she deserves, and that means speaking out loudly about the many ways that she has failed to stand up for New York.


David’s opponent in the primary is Bruce Blakeman, a lawyer and serial candidate who previously served as Nassau County supervisor.

During his tenure as supervisor, Blakeman oversaw the largest single property tax increase in Nassau County history.

Blakeman was overwhelming rejected by New Yorkers in his 1998 bid for State Comptroller, which he lost to Carl McCall by a 2-1 margin.

Seriously lacking in terms of both substance, Mr. Blakeman has already shown he plans to focus on running a negative campaign against David Malpass.

Assuming David wins the primary, his democratic Democratic opponent in the general election will be unelected incumbent Senator Kirsten Gillibrand, whose approval ratings are low and slipping daily.

In spite of her silence on key issues and unconditional support of Washington’s break-neck expansion, Gillibrand has the fundraising advantage (over $8 million) – and strong support from the White House.

Both of David’s opponents are under-qualified for the office of U.S. Senator.

We anticipate that they will attempt to conceal their poor legislative track records and lack of substance by attacking David’s role as the chief economist at Bear Stearns.

We are prepared to confront this hollow critique head-on: David was an economist – not a banker, and his role at Bear was an outward facing one that earned him widespread recognition as one of the best economists in the world.

We need to fight back. And that is why we are going to be asking you to do even more in the coming few weeks so that we can get David’s Malpass’ positive message out there, build the kind of campaign we need to win statewide, and also respond to attacks.


The contrasts between David and his opponents could not be more clear. To name just a few:

Both are career-politicians who are completely wedded to insider party politics.

David is an economist with backbone whose core mission is to stand up to Washington’s deeply imbedded tax-and-spend culture.

Bruce Blakeman voted for the largest tax increase in his county’s history.

David has been arguing for low-tax, pro-growth economic policies on the pages of The Wall Street Journal and Forbes for over 20 years.

Kirsten Gillibrand presided over the creation and proliferation of sub-prime mortgages as head of the Special Products division at the Department of Housing and Urban Development in the 1980s.

During the same period, David served as Republican staff director of the Senate Budget Committee, where he fought to lower taxes and cut back on government waste.


It is going to require enormous resources to defeat Kirsten Gillibrand and bring the upheaval to Washington’s tax-and spend culture that is so desperately needed. Your financial support is crucial.

The best way to give is by visiting the campaign website, Whether you give $10, $100, or $1000, we want you to know that every dollar counts, and will be spent wisely by the campaign.

In the coming weeks, we will be having a Washington, DC fundraiser at the National Republican Senatorial Committee, a Women for Malpass luncheon featuring Diana Taylor as the guest speaker, and Young Professionals for Malpass reception. If you would like to attend, please call our finance department at 212-512-5126, or email Molly Mandigo at

Thank you for all you do.


Rob Cole
Senior Advisor
David Malpass for U.S. for Senate

1 comment:

Superb Jon said...

Bear was the only GOP firm on Wall Street. The Big8 ran dioGuardi for Congress to sabotage tax reform to avoid reductions in CPA fees. Where did the poor Albanians find the $400,000 per year they pay DioGuardi as their lobbyist? Would 9/11 hve happened if it were not for DioGuardi's support for Albanian and bosnian terrorist links?

New York Times December 21, 1985 A26 Narrow regional interest dictated a lot of votes against the big tax-revision bill that the House has finally approved. . . 12 New York and 2 New Jersey Republicans who voted against the measure. . . It would preserve deductibility of state and local taxes. . . It would continue tax exemption of industrial development bonds . . . the following, all Republicans, were still in opposition: NEW YORK: Sherwood Boehlert, William Carney, Joseph DioGuardi, Fred Eckert, Hamilton Fish, Benjamin Gilman, Bill Green, Frank Horton, David Martin, Guy Molinari, Gerald Solomon and George Wortley.

AP August 10, 1984, By JIM LUTHER, The American Institute of Certified Public Accountants, whose members make a living handling tax matters, questioned the assumption that the tax law needs radical surgery. The accountants said laws passed since 1974 will produce considerable amounts of equity and simplicity once they and the regulations that interpret them are fully in effect.
Allen B. Ellentuck, chairman of the CPA association's tax division, was especially critical of the notion that a flat tax will result in simplicity for the average taxpayer. "Those expenses which now commonly appear on tax returns of most middle-income taxpayers would continue to be deductible under prominent flat-tax proposals," he said. And most flat-tax proposals would require that various tax-exempt items _ such as worker fringe benefits _ be reported as taxable income. To obtain even a degree of simplicity, Ellentuck added, the flat tax would do away with the present progressive rate structure that takes a bigger bite as income increases.

March 8, 1984, Joseph J. DioGuardi, 43, a partner in Arthur Andersen & Co., one of the ''Big Eight'' international accounting and consulting firms, will leave the firm on March 31 to enter the race for the 20th Congressional . . . ''He has distinguished himself in the areas in which he has had firmwide responsibility, namely the tax aspects of nonprofit organizations, the public sector and charitable giving,'' the statement continued.

October 4, 1992, AP Joseph J. DioGuardi, who is seeking election to a House seat he lost amid charges of campaign finance irregularities, tried to avoid paying taxes through an investment scheme designed to lose money, according to U.S. Tax Court records . . . In 1978, DioGuardi was a partner in Daga Financial Co., which bought and sold options and futures on stocks and securities, according to court papers. On their joint tax return for that year, DioGuardi and his wife reported a loss of $ 112,453 from Joseph DioGuardi's 24.4 percent share of Daga, according to the records. So even though DioGuardi had earned more than $ 124,000 as an accountant that year, he and his wife claimed taxable income of $ 9,323, the records show. But the IRS said Daga's 1978 losses could not be deducted because "the entire transaction lacked economic reality." . . . In 1988, Lowey ousted DioGuardi after a report that Joseph Crabtree, the head of DioGuardi's campaign finance committee, had funneled more than $ 50,000 in illegal contributions to the campaign through his numerous auto dealerships. Crabtree reimbursed employees for the contributions, which is illegal. Crabtree said DioGuardi masterminded the plan; the ex-congressman denied it. Crabtree eventually pleaded guilty to conspiring to violate federal election and tax laws.