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What
The Advocate Says
The
issues are typically complicated and don't easily translate into
neat headlines, but they are no less important in a country
which now has some 95 million mutual fund and retirement plan
investors. Accordingly, since becoming chairman of the
powerful House subcommittee on capital markets, Richard Baker
has aggressively used his leadership position to champion
conservative reforms in the marketplace.
 Whether
it's been affordability of insurance during the economic
aftershock of 9-11, Wall Street ethics and corporate governance
reforms, federal affordable housing programs, or oversight of
quasi-governmental giants Fannie Mae and Freddie Mac, Baker has
consistently fought for the interests of consumers, individual
investors, and taxpayers.
His work has gained him national standing on matters of finance
and notoriety from Washington to Wall Street. But his work
also has resonance on Main Street, and hasn't escaped notice by
the editorial board of Baton Rouge's major daily newspaper.
What follows are portions of what The Advocate has been
saying about Baker's work on financial services issues, from
editorials recent and dating back to 2001.
From "Home finance bill approved," The
(Baton Rouge) Advocate editorial, November 6, 2005:
Once
pilloried by Washington's political establishment for what
seemed a fruitless crusade, U.S. Rep. Richard H. Baker has a
right to enjoy the successful passage of legislation to
better regulate mortgage finance giants Fannie Mae and Freddie
Mac.
Baker, R-Baton Rouge, was a lonely voice in the U.S. House when
he called attention to long-term risks in the large portfolios
of the two government-sponsored enterprises....
Many of Baker's colleagues thought he was not only alarmist
about economic risks but endangered the flow of campaign cash to
their coffers.
But over the years, Baker's warnings proved prescient.
Accounting scandals in the two mortgage giants led to the
toppling of chief executives and widespread calls for reforms.
By a 331-90 vote last week, the House approved a bill to create
a new and more-powerful regulatory agency to oversee
government-sponsored enterprises such as Fannie Mae and Freddie
Mac....
In addition, the bill provides for Fannie Mae and Freddie Mac
to contribute to a major affordable-housing fund to develop
projects that would expand homeownership. Priority for the new
fund would be the hurricane-afflicted areas of Louisiana and the
Gulf Coast.
"The need for stronger oversight of these institutions is
greater now than ever before, and, after the unprecedented
destruction of recent hurricanes, the need to expand affordable
home ownership opportunities, particularly in my home state of
Louisiana, is greater as well," Baker said. "This
legislation provides for both, and its passage by the House
represents major progress."...
It's a significant legislative achievement for Baker,
particularly when one looks back to the long odds he faced until
just a few years ago.
...............
From "Baker plans for rebuilding," The
(Baton Rouge) Advocate editorial, October 10, 2005:
"While
it's in an early stage, the proposal Friday by U.S. Rep.
Richard Baker, R-Baton Rouge, offers one way out of what rapidly
is becoming a political and financial morass.
"He proposes a Louisiana Recovery Corp., led by
business leaders and experts, to tackle the long-term
complexities of rebuilding....
"Baker's proposal deserves a hearing, especially
given the unprecedented scope of the task ahead. No one level of
government can direct such an undertaking because of its myriad
details.....
"Those kinds of issues can be debated during the next few
weeks, but Baker's plan is a serious proposal that can give
effective direction to efforts across the lines dividing
governments."
..............
From "Baker crusade takes on giants," The
(Baton Rouge) Advocate editorial, October 1, 2004:
"Rarely
has a member of Congress been proved right in such a spectacular
fashion as has Richard H. Baker, R-Baton Rouge, in his often
lonely crusade for changes in the regulation of mortgage finance
giants Fannie Mae and Freddie Mac."
...............
From "Reform is urgent for Freddie Mac," The
(Baton Rouge) Advocate editorial, November 23, 2003:
"Again
and again, U.S. Rep. Richard Baker has been proved right
about the need for vastly more aggressive federal monitoring of
the big government-sponsored enterprises, or GSEs, involved in
mortgage finance.
"Yet precious little of what Baker, R-Baton Rouge, has
proposed in Congress has made it into law. That must change in
light of new revelations....
"Baker criticized Democrats and the homebuilders lobby for
stalling action on GSE reform. If that has been the case, those
groups certainly won't be able to continue that policy very long
in light of the Freddie Mac disclosures."
...............
From "Housing giants need oversight," The
(Baton Rouge) Advocate editorial, September 20, 2003:
“[W]e
urge Congress to move on the legislative proposals pushed by
U.S. Rep. Richard Baker and endorsed by the Bush administration.
“Baker, R-Baton Rouge, has been for years a lonely critic
of the haphazard regulation of government-sponsored enterprises,
or GSEs, which act as private companies in the financial markets
but benefit from the implied backing of the U.S. government….
”Now,
however, after an accounting scandal led to top-level upheavals
at one of the leading housing finance companies, called Freddie
Mac, Baker's views are getting a wider and much more respectful
hearing.
“John Snow, the secretary of the treasury, told a Capitol Hill
hearing that a more effective regulatory scheme is needed for
the GSE market.
“Snow and Baker, we note, both emphasize that GSEs are not
necessarily a savings-and-loan scandal waiting to happen. They
bundle mortgages as securities, and have helped make America's
robust housing market the success story that it is.
“But as Baker pointed out, when it was politically
unpopular to do so, the GSE paper is a huge part of the
nation's financial reserves -- and HUD does not have the
expertise or capacity to regulate GSEs.
“Instead, as Baker has urged, reform legislation is likely to
include a strengthened Treasury Department regulator."
...............
From "Limit scope of lawsuits," The
(Baton Rouge) Advocate editorial, July 24, 2003:
"U.S. Rep. Richard Baker, R-Baton Rouge, has introduced
legislation to limit the power of lawsuit settlements to make
policy without public input.
His bill does not limit the power of attorneys general to
litigate wrongdoing. However,
if the settlements propose to change securities law, the changes
would only be permissible if the Securities and Exchange
Commission is consulted.
"The Baker bill applies to these sweeping lawsuit
settlements the same standard applied to state legislatures
since 1996, in the Clinton administration, when Congress
explicitly limited state power to change securities laws.
Congress rightly did not want legislatures to create a
patchwork of differing regulations of markets that are national,
if not international, in scope.
"Baker said Wednesday his bill is not intended to eliminate
the power of courts to order 'global settlements' of these
issues. It only requires that federal regulators are involved.
Spitzer’s Merrill Lynch settlement later was rolled
into the larger agreement in the securities industry that
involved the SEC.
"Endorsed by the SEC and the Federal Reserve’s Alan
Greenspan, we believe this bill is an appropriate limit on
state courts intervening in direct regulation of the securities
marketplace."
..............
From "New regulation of home finance," The
(Baton Rouge) Advocate editorial, June 25, 2003:
"A serious legislative response to management problems
at one of the nation's most important housing finance agencies
has been offered by U.S. Rep. Richard Baker.
"The Baton Rouge Republican is providing an exceptional
level of leadership and activism on behalf of consumers -- even
if, as is often the case, the issues in financial services are
complex....
"At the same time, a small chill
at one of the companies -- Freddie Mac sacked its leadership
because of concerns about accounting practices -- is a serious
matter. Freddie Mac is the subject of a criminal investigation
by federal prosecutors and civil inquiries by the Securities and
Exchange Commission.
"Baker has long questioned the effectiveness of the
existing federal regulation of the GSEs, government-sponsored
enterprises such as Freddie Mac. Now he has the opportunity to
write into law a tougher regulatory regime.
"It will be quite a fight, and his newly introduced
legislation is probably only the start of an extended
negotiation about how to regulate, intelligently, important
players in the system. Complicating the matter is that the GSEs
-- particularly Fannie Mae -- are huge investors in lobbying and
political contributions to Congress....
"But [Baker's] arguments about
the nature of GSEs in today's environment are persuasive.
"We commend him for his new initiative."
...............
From "Bringing HOPE to Baton Rouge," The
(Baton Rouge) Advocate editorial, March 7, 2003:
"An $18.64 million HOPE VI grant from the Department of
Housing and Urban Development will help blighted sections of
Baton Rouge between downtown and LSU, U.S. Rep. Richard Baker
said in announcing the grant....
"This is the kind of transformation that has led the
Housing Authority and a coalition of community organizations,
strongly supported by Baker, to push for the HOPE VI grant
despite three straight rejections in previous years.
"Baker, a senior member of the House committee
overseeing financial services and housing finance programs,
pushed for critical changes in HOPE VI rules. 'In the past,
most of the HOPE VI was going to eight large metropolitan
areas,' Baker said. 'It was almost impossible for smaller
communities like Baton Rouge to compete.'
"Baker arranged for Hans Dekker of the Baton Rouge Area
Foundation, who has demonstrated remarkable leadership in
housing and community development policies in the city, to
testify to Congress about the need for HOPE VI grants to
medium-sized cities.
"When Housing Authority members were understandably
discouraged about a fourth bid for a grant -- the three failed
bids had cost a total of $225,000 to prepare -- Dekker and
Baker raised most of the $106,000 for this year's application.
The foundation alone provided $50,000 and helped to marshal
other resources for the bid....
"We commend all involved in this important step forward for
Baton Rouge."
...............
From "Insurance backstop needed," The (Baton
Rouge) Advocate editorial, October 22, 2002:
"[T]here appears to be at least some agreement among senior
members of Congress that the country needs a terrorism
"backstop" for insurance.
"If the reported agreement among senior lawmakers holds, a
new bill would provide a federal backstop for up to $100 billion
in future terrorism-related losses. The bill would encourage
insurers to write terrorism policies by guaranteeing that the
federal government would pay 90 percent of losses greater than
$10 billion.
"An important contribution to this debate was made by
U.S. Rep. Richard Baker, R-Baton Rouge, who successfully
called for provisions for companies to pay back, over a long
period of time, the money the federal government provides for
the backstop. It is not a free lunch for insurance companies,
but it is an incentive for companies to begin writing insurance
policies that cover terrorist acts."
...............
From "Avoid overreach in market reform," The
(Baton Rouge) Advocate editorial, July 14, 2002:
"Members of Congress with long-standing concerns about
the reliability of market reporting by securities analysts --
particularly U.S. Rep. Richard Baker, R-Baton Rouge, who was
well ahead of the Capitol Hill curve on these issues -- should
get pride of place in a conference committee that will
reconcile House and Senate differences in the legislation."
...............
From "The wrong way to stock reform," The
(Baton Rouge) Advocate editorial, May 24, 2002:
"Many thoughtful critics of Wall Street, including U.S.
Rep. Richard Baker, R-Baton Rouge, have questioned the
conflicts between analysts in brokerage houses touting stocks at
the same time as the brokerage houses make money on sale of the
same stocks.
"But is this an issue that is best resolved through
closed-door negotiations among lawyers representing the
companies and a single state government? The stock market is a
regulated industry with national reach.
"Baker has argued that attorneys general ought to allow the
Securities and Exchange Commission and Congress to bring all the
interests to the table to reform the industry. That's the job of
national agencies.
"Further, Baker says he believes that Spitzer's agreement
does not even do a particularly good job of policing the
industry for the long term.
"'Spitzer's rules, according to the agreement, will be
enforced, for but a single year, all through the auspices of a
single person, someone called a "compliance monitor"
and a handpicked employee of Merrill Lynch, no less,' Baker
said. 'In Louisiana we call this putting the fox in charge of
the henhouse.'"
...............
From
"Taxpayers have interest in (terrorism) insurance
plan," The (Baton Rouge) Advocate editorial,
November 3, 2001:
"The issues are complex, and intensive negotiations
are under way involving the White House and Congress. While the
shape of the eventual plan is still very much in the air, with
new proposals being batted around daily, the role of U.S.
Rep. Richard Baker, R-Baton Rouge, deserves particular
commendation.
"When the administration and powerful lobbyists proposed
that the government pick up this tab from the first dollar of
new terrorism losses, Baker balked....
"In each case, though, we believe that Baker has been
right to look for a way out of the crisis that protects the
interest of the ordinary taxpayer....
"A payback plan would be a terrific bonus, and Baker’s
proposal is both constructive and very much in the interest of
American taxpayers.
"We commend him for his efforts, and we encourage him to
keep it up."
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