GOP primary 11th Congressional District candidate Elizabeth Emken has hit opponent David Harmer with a nasty mailer (post below) that paints him as a greedy credit card lawyer for a failed bank who profited from the federal bailout.
Emken and Harmer are in a tight, four-way primary race for their party’s nomination on June 8 and the opportunity to challenge incumbent Democratic Rep. Jerry McNerney.
The other two Republican candidates, Tony Amador and Brad Goehring, have weighed in on the issue, as well. (See their responses at the bottom of this post.)
The mailer contains the usual mix of truth and distortions. Here is an analysis of its contents and the Harmer campaign’s response:
WHAT IT SAYS: “Harmer took $485,779 in bonus and pay from a Wall Street bailout bank seized by federal regulators.”
IS IT TRUE? Yes and no. Washington Mutual, where Harmer was a first vice president and assistant general counsel in its credit card division, never received bailout money.
The FDIC forced Washington Mutual into receivership on Sept. 25, 2008, and orchestrated the a sale to JPMorgan Chase for $1.9 billion.
A month later, JPMorgan Chase received $25 billion from the Troubled Asset Relief Program, or TARP. There is no evidence on way or the other that JPMorgan, which had already acquired Bear Stearns, used or needed TARP money to buy Washington Mutual. (A reader sent this link from BusinessInsider, where the author suggests documents show the federal government forced JPMorgan Chase and the other banks to take the bailout; that they didn’t want it.)
However, Harmer collected a salary, bonus and severance from JPMorgan Chase for a few months until the new owner shut down the division — it already had one — and he lost his job in January 2009.
Several banking industry experts say only JPMorgan knows if it used TARP funds to cover or enable its Washington Mutual acquisition costs, such as Harmer’s severance check. There were no requirements that banks segregate and publicly identify how or if they spent TARP funds.
HARMER RESPONSE: “Harmer never took a single dime of bailout funding. It’s blatantly untrue. The piece is designed to distort the picture.”
WHAT IT SAYS: “Harmer took almost half a million dollars in bonuses and pay in the months leading up to his bank’s seizure.”
IS IT TRUE? Yes. Harmer earned $219,714 in salary and an $80,000 bonus in 2008. In the first few months of 2009, before JPMorgan closed his division, Harmer was paid $26,073 in salary and a $75,406 bonus.
He subsequently received an $84,586 severance check, for a total of $485,779 between Jan. 1, 2008, and April 30, 2009.
HARMER RESPONSE: “It’s meaningless. Everyone with a job has earned some amount of money in any given time period.”
WHAT IT SAYS: “After his bank was seized by federal regulators and sold to JPMorgan, taxpayers were on the hook for $25 billion in federal bailout money.”
IS IT TRUE? Yes. JPMorgan was one of 19 banks that federal regulators deemed eligible for the $700 billion Troubled Asset Relief Program, or TARP. Congress authorized it Oct. 3, 2008, about two weeks after the FDIC seized and sold Washington Mutual.
JPMorgan has repaid the money plus with interest.
HARMER RESPONSE: “That fact that Washington Mutual failed or JPMorgan Chase bought it had nothing to do with Harmer. He worked in the credit card compliance division, where he did his job very well and he was rewarded.”
WHAT IT SAYS: “Then Harmer turned around and had the nerve to file a jobless claim and collected nearly $2,400 from California’s Unemployment Insurance Fund. Unemployment insurance should be reserved for people truly in need — not greedy lawyers …”
IS IT TRUE? Yes and no.
Harmer collected $2,395 in unemployment insurance through April 30, 2009. However, all eligible workers who pay into the unemployment insurance pool receive benefits regardless of whether they “need” the money.
The implication is that as a conservative candidate who opposes TARP and the other federal stimulus dollars, it looks bad for Harmer to collect unemployment while he runs for Congress.
HARMER RESPONSE: “It is insurance. David Harmer has paid in far more into the system than he has ever collected.”
Click through to see Amador and Goehring’s statements on this issue.