Kamala Harris as Attorney General refused to prosecute the George Soros owned OneWest Bank for over 1,000 violations of federal law. A one year investigation had uncovered evidence of widespread misconduct, but she refused to prosecute Soros and Mnuchin.
On March 19, 2009, a seven member investor group, IMB Holdco, led by Steven Mnuchin, which included billionaire George Soros, Christopher Flowers, John Paulson and Michael Dell purchased Independent National Mortgage Corporation (IndyMac Bank) of Pasadena, California for $13.65 billion from the FDIC and created OneWest from the remains of IndyMac.
OneWest Bank, which Steven Mnuchin ran from 2009 to 2015, repeatedly broke California’s foreclosure laws, according to a previously undisclosed 2013 memo from top state prosecutors.
In an internal memo published on Tuesday by The Intercept, prosecutors at the California attorney general’s office said they had found over a thousand violations of foreclosure laws by OneWest bank during that time, and predicted that further investigation would uncover many thousands more.
But the investigation into what the memo called “widespread misconduct” was closed after Harris’s office declined to file a civil enforcement action against the bank.
The previously undisclosed 2013 memo from top prosecutors in the state attorney general’s office alleges that OneWest rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.
In the memo, the leaders of the state attorney general’s Consumer Law Section said they had “uncovered evidence suggestive of widespread misconduct” in a yearlong investigation. In a detailed 22 page request, they identified over a thousand legal violations in the small subsection of OneWest loans they were able to examine, and they recommended that Attorney General Kamala Harris file a civil enforcement action against the Pasadena based bank. They even wrote up a sample legal complaint, seeking injunctive relief and millions of dollars in penalties. But Kamala Harris’s office, without any explanation, declined to prosecute the case.
The consistent violations of California foreclosure processes outlined in the memo would indicate that Mnuchin’s bank which is owned by George Soros didn’t merely act callously, but did so with blatant disregard for the law. According to the memo, OneWest also obstructed the investigation by ordering third parties to refuse to comply with state subpoenas.
The memo also raises questions about then California Attorney General Kamala Harris. Why did her office close the case, deciding not to “conduct a full investigation of a national bank’s misconduct and provide a public accounting of what happened,” as her own investigators had urged?
Though the state investigators could not subpoena OneWest and were obstructed from obtaining more documents, they extrapolated that a full and unencumbered inquiry would yield at least 5,600 violations of foreclosure sale auctions, and turn up instances of backdating in nearly all of the 35,000 foreclosures OneWest had completed in California from 2009 to 2012.
The case did not contemplate criminal indictments, even though many of the violations described were felonies. Consumer Law is a civil enforcement section.
Consumer Law Section attorneys recommended “that the attorney general authorize us to file a civil enforcement action against OneWest.” Two months later, they were told that the office would not move forward with the complaint. OneWest representatives were not even brought in for a meeting to discuss the matter.
So why didn’t Kamala Harris leap at the chance to take on a bank that her staff said was illegally rushing Californians out of their homes? Why did she reject a case that her office had already spent significant resources on during a year of line level investigation?
Kristin Ford, communications director at the attorney general’s office, did not respond to a detailed request for comment. Without an official explanation, we can only speculate why Harris passed up the opportunity.
The investigators who actually did the ground work in the OneWest case were not present for executive committee decision making.
Harris’s prodigious fundraising also raises questions about how attentive she is to the needs of campaign contributors. Steven Mnuchin gave $2,000 to Harris’ Senate campaign in February 2016, it was the only Democrat he contributed to that year. Among the investors in OneWest Bank was major Democratic donor George Soros, who maxed out to Kamala Harris’s campaign in 2015.
“I don’t know why they didn’t move forward,” said Paulina Gonzalez of the California Reinvestment Coalition, a state housing advocacy group. “There’s some really concerning information in this document that would say to us there needs to be further investigation. This is damning evidence of clear violations.”
Gonzalez, whose organization has been tracking OneWest for several years, also received a copy of the package memo and sample complaint in the mail. Her copy came “with Wonder Woman stamps and the return address of Planned Parenthood,” Gonzalez said. The copy sent to us had no return address.
With Mnuchin set to take over the Treasury Department, Gonzalez said the memo raises “real concerns about his ethics and potential for illegal behavior.” She said her organization would take up the matter with OneWest’s federal regulator, the Office of the Comptroller of the Currency (OCC), along with Harris’ replacement as California attorney general, Xavier Becerra.
Nothing was ever done by Xavier Becerra.
