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Failing Upward, III

In Brief

August 25, 2010, 1:00 am
In the three months since SFR took note of former Thornburg Mortgage Board Member Eliot Cutler’s independent run for the governorship of Maine, his affiliation with that bankrupt Santa Fe corporation has become a campaign issue there.

In a press release earlier this month, Cutler’s campaign tried to defuse attacks on his Thornburg record, attacks supposedly being spread through push polls by the Democratic candidate in the race, Libby Mitchell.

Arden Manning, coordinated campaign manager for the Maine Democrats, has denied running push polls, and says Cutler’s business experience is fair game. Last week, Manning called SFR for information on Thornburg Mortgage; SFR sent him to our website.

The Portland Press Herald quoted a Maine banker saying a $22,000 board payment received by Cutler after Thornburg’s bankruptcy was nothing “out of the ordinary.”

The Maine paper seems to be repeating without challenge Cutler’s claim that Thornburg’s principal product was “the opposite of sub-prime loans…made to borrowers with exceptional credit.”

As SFR has reported, that’s not entirely true: Half of the loans in a $1 billion Thornburg Mortgage security purchased by the Federal Reserve Bank of New York after the crash of 2008 were made to borrowers without full documentation of their income and assets.

So while it’s true Thornburg originated mostly high-quality loans, it had no qualms reselling the bad ones that helped create the subprime mortgage crisis.

But Cutler’s ties to an even less-popular industry may prove more problematic. Down East magazine of Maine reports Cutler has worked for a lobbying firm representing Chinese state-run oil companies, as well as Exxon Mobil, Shell and—wait for it—BP.

 

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