Paul Gosar for Congress

Financial Reform

GOSAR TO OBAMA AND CONGRESS: MORE LAWS ARE NOT THE ANSWER

The Democrats are now pushing for “financial reform” on Wall Street, having convinced themselves that the answer to all problems is more laws and more government. When it comes to Wall Street, the problem is not a lack of laws, but a lack of government competence. Congress can pass all the laws it wants, but if the agencies charged with enforcing the laws are incompetent more laws won’t help the situation. They will, of course, increase our taxes because more laws mean more bureaucrats, more agencies and more departments.

I find it astonishing that the President of the United States, assisted by liberals like Nancy Pelosi and Ann Kirkpatrick, think that the “problem” with Wall Street is simply not enough laws and regulations. Really? Wall Street is heavily regulated. It has been since the 1930’s and the federal takeover of corporate finance through the Securities Act of 1933. It is well known in the financial industry that this Act requires disclosure and transparency for publicly traded companies, but it also “prohibit[s] deceit, misrepresentations, and other fraud in the sale of securities.” And these laws are severe, with heavy fines and long prison terms—just ask Bernie Madoff, who is serving 150 years in prison.

In short, federal laws already prohibit securities fraud, wire fraud, mail fraud, money laundering, false statements, perjury, and theft by Wall Street managers. In addition, all 50 states have somewhat similar laws that regulate state corporations. Thus, I disagree with President Obama’s premise for “financial reform”; that is, his assertion (assisted by the liberals in Congress) that but for more laws and regulations, this would not have happened. This is simply not the case.

The truth is, all of the fraud, misrepresentations, Ponzi schemes and rip-offs from shareholders by money managers, fund managers, negligent boards of directors, and corrupt management are already against the law. Corrupt or inept money managers and boards of directors can also face civil lawsuits—and often do. What is needed is true oversight and competent investigations and prosecutions.

The far Left, like Ann Kirkpatrick, Nancy Pelosi and President Obama, look at the problems on Wall Street and instinctively believe the problem is a lack of laws. We could fill an average sized conference room from floor to ceiling with all the laws and regulations (federal and state) that apply to the financial industry. The real problem is the incompetence and ineptitude of the federal bureaucracy already in place that is supposed to be watching the store. But President Obama and Ann Kirkpatrick remain silent on that issue, apparently not wanting to criticize the federal government they worship. After all, it is hard to tell people the answer to all problems is a bigger federal government and more laws and simultaneously point out how a massive federal agency awash in laws and regulations still did not get the job done.

Perhaps the President and Congress have forgotten about the Securities Exchange Commission, whose specific mission is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” Lighting a fire under the SEC as it currently exists is one thing we could do that would not cost the taxpayers more money. For example, the SEC recently reported, after conducting an internal investigation, that it “did not conduct a meaningful investigation of the indicted money manager R. Allen Stanford until 2005 even though examiners suspected him of operating a Ponzi scheme eight years earlier, a report by the S.E.C.’s inspector general.” The same thing occurred with the Bernie Madoff fiasco—the SEC was in fact directly warned that he was running a Ponzi scheme—and ignored it.

Make no mistake: I expect and demand honesty and fidelity from Wall Street. Hard working Americans place their trust—and their financial future—in Wall Street money managers. But simply passing “more” laws to address fraud misses the point—we have plenty of laws. We need oversight and enforcement. We need better government, not bigger government.

I am running for Congress to make our country better and get it back on track. I will not be a knee-jerk lawmaker like Ann Kirkpatrick and Nancy Pelosi, whose first instinct is to spend more of our money and pass more laws, without ever looking at the root cause of problems.

Please support me. If I retake this seat for common sense conservatives, we can push back the far Left and prevent it from further taking root in our free country.