Sen. Olympia Snowe's Conflict of Interest Cover-Up
Last week, Senate Republicans blocked Richard Cordray's nomination as Director of the Consumer Financial Protection Bureau (CFPB), with Sen. Olympia Snowe (R-ME) voting "present" in order, she said, to avoid a conflict of interest. In fact, she didn't avoid the conflict; she merely obscured it. Here's Snowe's explanation of the conflict:
Sen. Snowe's vote may not be winnable in any case. She voted "Present" instead of "yes" or "no" to avoid any possible conflict of interest. Snowe explains "My husband's associated with an industry that involves student loans that could be regulated under this bureau along with thousands of other industries."
But Snowe's "present" vote did not, as she claims, avoid a conflict of interest. That's because on a cloture vote, a vote of "present" has the same effect as a "no" vote: 60 votes are required for cloture, regardless of how many senators miss the vote or vote "present." Snowe has been a member of the United States Senate for nearly 17 years; given the frequency with which she and her fellow Republicans conduct filibusters, it's hard to imagine that she doesn't understand that a "present" vote is the same as a vote against cloture. (Still not convinced? Here's conservative National Review writer and activist Ed Whelan referring to a vote of "present" on a cloture vote as "the functional equivalent of a no vote.")
So, Snowe's "present" vote had the same effect as a "no" vote — it helped to block Cordray's nomination. Now, let's look back at Snowe's explanation of the conflict involved: "My husband's associated with an industry that involves student loans that could be regulated under this bureau." Snowe's husband, John McKernan, is chairman of the board of directors of Education Management Corporation, which is being sued for fraud by the U.S. Department of Justice and four states in connection with $11 billion in financial aid it received between 2003, when McKernan was chief executive, and 2011.
According to the Portland Press Herald, Snowe voted "present" after hearing statements that, without a director, the consumer protection agency would not be able to fully regulate companies like her husband's:
Snowe said she learned Thursday that the Senate floor debate included charges that, without a director, the new agency would be unable to use all of its powers over a number of financial institutions, including private student loan companies. [...]
Snowe's spokesman Brandon Bouchard said it was brought to Snowe's attention Thursday that Democrats were saying on the Senate floor that failure to confirm a director would keep the bureau from exercising its full authority over financial institutions including private student loan companies.
"It had come to our attention, upon review by staff (Thursday) morning, that there were correlations being made on the Senate floor that failing to confirm a CFPB director would preclude the implementation of stricter regulations," Bouchard said. "Therefore, she concluded she should vote 'present' as we didn't want even the perception that a vote in opposition to moving forward with the nominee was in any way linked to her husband's position."
Last Wednesday, Snowe met with Cordray and pronounced him "highly qualified" for the job (although she has long been promising to block any nominee over concerns with the bureau's structure). The next day, she learned that without a director, the CFPB might not be able to fully exercise its regulatory authority over her husband's business — a business that's already being sued by the Justice Department and several states. After learning this, Snowe voted "present," functionally equivalent to a vote against the nomination. By voting "present," Snowe didn't avoid influencing the outcome of the vote — she merely covered up her effect on the outcome.
That all looks bad. Very bad. But in fairness to Snowe, there's another potential explanation for her vote: Snowe, who owes her political career to the support of independents and Democrats who wrongly believe her to be a moderate, didn't want to be seen as killing the nomination and weakening the bureau, but, under pressure from a right-wing primary challenger, didn't want to vote for the nomination, either. So she concocted an excuse for ducking the vote. If that's the case, it's a double dose of political cowardice: Not only is she caving to political pressure from her party's extremists, she's trying to avoid accountability for doing so.