On the eve of the Democratic National Convention, The Daily Caller has published a four-part, 6,000+ word series alleging that President Obama was "listed as the lead attorney" in a class action discrimination lawsuit decades ago and thus participated in a process the publication claims triggered the economic collapse of 2008. The Caller appears to have conferred the status of "lead attorney" on Obama on the basis of the fact that his name comes first on an alphabetically ordered list of attorneys; moreover, experts have said that such class-action lawsuits did not trigger the mortgage crisis.
In the 1995 class action lawsuit in question, Buycks-Roberson v. Citibank, the plaintiffs alleged that Citibank had racially discriminated against them when they sought home loans. They pointed to bank data indicating that "the percentage of loan applications approved by Citibank was far lower in areas where the racial composition of the neighborhood was predominantly African-American than it was in areas where the composition of the neighborhood was predominantly White," even when the applicants were in the same income bracket.
According to the Caller, Obama's participation in the lawsuit makes him "a pioneering contributor to the national subprime real estate bubble" and part of a movement that "contributed greatly to a housing bubble that burst in 2007, crashed the nation's economy in 2008." But both their discussion of his role in the case and their analysis of its result are deeply flawed.
Despite its flaws, the Caller piece has already been promoted by Fox News. Caller editor in chief Tucker Carlson appeared on Fox & Friends yesterday to discuss the piece and claimed that Obama "was the lead plaintiff on some of these cases," adding that the lawsuit is "significant" because it is "at the heart of the 2007-2008 economic meltdown."
Throughout its 5,000 word lead story and multiple side pieces, the Caller repeatedly inflates Obama's role in the lawsuit. In the lead piece, Neil Munro reports that Obama "helmed" the lawsuit as "the lead plaintiff's attorney." While he writes that Obama's "role was limited," he also claims that it was "his lawsuit" and that Obama "sought public credit for the lawsuit: His employer submitted a docket to the court that listed him as the lead attorney for two of the three named plaintiffs in the case." Three other Caller stories refer to Obama as the "lead attorney" or "lead counsel" for the plaintiffs.
The sole basis the Caller articles cite for this claim is the case docket. That document lists Fay Clayton as "LEAD ATTORNEY" and lists her first among the attorneys representing plaintiff Selma S Buycks-Roberson. It then provides a list of attorneys for Buycks-Roberson listed alphabetically by first name; "Barack H. Obama" is listed first. That list of attorneys includes Judson Hirsch Miner, who was a name partner at Obama's firm; at the time, Obama was an associate.
With regard to plaintiffs Calvin R Roberson and Renee Brooks, whom the Caller claimed Obama served as "lead attorney," no separate lead attorney is indicated as Clayton was for Buycks-Roberson. While Obama is the first lawyer listed representing each plaintiff, followed by Clayton and the other attorneys, these lists again are ordered alphabetically by first name. But even for Roberson and Brooks, the docket does not ask the court clerk to provide notices regarding the case to Obama; instead such notices are directed to Miner and other attorneys involved in the case.
Moreover, Obama is not listed as one of the attorneys who worked on the complaint filed on behalf of the plaintiffs. Obama also did not speak or even register an appearance during a court hearing in which the judge considered whether to dismiss the case without holding a trial. Nor did Obama sign the agreement that settled the case.
Indeed, a 2007 Chicago Sun-Times article indicates that Obama did not have an extensive role in the lawsuit, with the lead attorney for the plaintiff stating that Obama was "the very junior lawyer in that case" and "not visible" to him during court proceedings.
From the Sun-Times piece (accessed via Nexis):
Obama represented Calvin Roberson in a 1994 lawsuit against Citibank, charging the bank systematically denied mortgages to African-American applicants and others from minority neighborhoods.
"I don't recall him ever standing up and giving an impassioned speech -- it was a lot of behind-the-scenes stuff," said Fay Clayton, the lead lawyer on the case.
"He was the very junior lawyer in that case," said attorney Robert Kriss. "He had just graduated from law school. I don't recall him being in court at any time I was there. I was the lead lawyer for Citibank and he was not very visible to me."
Kriss, Clayton and every other co-counsel and opposing counsel interviewed for this story praised Obama's legal ability, temperament and everything about his courtroom demeanor, even though, they agree, he didn't say much in the courtroom. Many are now donors to his campaign.
The story also reports that Obama's "final bill on the case was 138 hours, or $23,000." In an order awarding the plaintiffs' attorneys with $950,000 in fees, the judge presiding over the case wrote that "plaintiffs' counsel are highly experienced civil rights attorneys, who have carefully and reasonably incurred numerous hours in this complex case, and whose reasonable normal billing rates for these hours would result in attorneys' fees and costs of over $1,000,000." Obama's billing thus amounts to less than 2 percent of the fees and costs awarded to the attorneys.
Obama's role in the lawsuit aside, the Caller's contention that federal efforts backed by progressives to prevent discrimination against minorities in mortgage lending triggered the economic crisis is baseless. First of all, the lawsuit did not seek to change the standards the bank used to determine whether or not customers should have access to credit, but simply to ensure that the standard used to measure white customers was the same as that used to measure African-American customers. And the final agreement settling the case did not require Citibank to accept any loan applications.
Moreover, as the Washington Post's Brad Plumer has noted, "the housing bubble was global ... It's hard to explain how Congressional rules on inner-city housing caused all of this":
Washington Post columnist Barry Ritholtz has similarly stated that Wall Street's "Big Lie is that banks and investment houses are merely victims of the crash" and were forced to engage in risky lending by "misguided government policies." He writes that "The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations."
The right-wing media have claimed for years that the Community Reinvestment Act, a law passed in 1977 to reduce discriminatory credit practices, was responsible for the mortgage crisis and thus the economic collapse in late 2008. But experts have debunked this claim, with the Financial Crisis Inquiry Commission and Federal Reserve chairman Ben Bernanke, among others, stating that the CRA, in Bernanke's words, was not "at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties." Notably, the vast majority of subprime loans originated from institutions that are not even covered by the lending provisions of the CRA.
The Caller's story is not even original; conservative blogs previously circulated the notion that Obama "helped create the subprime housing crisis" in 2008. And the myth-busting website Snopes.com debunked the claim back then.
David Shere and Thomas Bishop provided research for this post.