The Daily Caller has a multi-installment scoop about the business practices of a little-known presidential candidate as its Labor Day story. This hard-nosed professional raised hopes of working-class people, made a million dollars off of them, and left almost all of them holding nothing more than worthless paper at the end of the relationship. Are we seeing another episode of How the Heartless Vampire Capitalist Turns, starring Mitt Romney? No, this one’s titled Fun With Community Organizers, starring Barack Obama.
The subject of the scoop is a class-action lawsuit filed in 1995 by Barack Obama on behalf of three lead plaintiffs and 180 subsidiary plaintiffs against Citibank for alleged discrimination in lending practices. It lead to a settlement in 1998 in which Citibank agreed to increase sub-prime lending to African-American borrowers. How did that work out for Obama’s clients? Not particularly well:
President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.
As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.
The startling failure rate among Obama’s private sector clients was discovered during The Daily Caller’s review of previously unpublished court information from the lawsuit that a young Obama helmed as the lead plaintiff’s attorney.
Since the mortgage bubble burst, some of his former clients are calling for a policy reversal.
“If you see some people don’t make enough money to afford the mortgage, why would you give them a loan?” asked Obama client John Buchanan. “There should be some type of regulation against giving people loans they can’t afford.”
Still, the Citibank settlement was in the high six-figure range. That should have helped Obama’s clients get started on new mortgages, right? Well … it did help the lawyers:
Three named plaintiffs in the lawsuit — Selma Buycks-Roberson, Calvin Roberson and Renee Brooks –- each collected $20,000. But none of the  ordinary, or non-named, plaintiffs that The Daily Caller was able to reach for comment reported receiving any money. This is despite a claim to TheDC by the lawsuit’s initiator, attorney Fay Clayton, that the settlement paid the 186 non-named clients between $770 and $3,250 each. …
“We should have gotten some type of monetary reward from the lawsuit, which we didn’t,” said John Buchanan, one of the clients. “I don’t remember any money being offered since we were discriminated against,” Buchanan said. The bank “should have had to pay.”
Elwood Flowers said, “the attorneys got the fatter part.” All he remembered getting was “a 1.4 inch thick package of legal gibberish.”
Most clients said they didn’t see anything from the lawsuit.
Fellow plaintiff Juanita Malone told TheDC she did not get a payment or a loan from Citibank after the settlement.
Another, Patricia Dixon, said she “didn’t get anything” from the settlement.
Cary Cotten, wife of plaintiff Edward Cotton, said the couple “got nothing” from the lawsuit.
Of the nearly million-dollar settlement, three clients got a grand total of $60,000, while the rest of the clients got coupons. What happened to the rest of the money? Looks like the attorneys, starting with Obama, got the redistributed wealth, while the clients got the shaft. It’s a great example of how broken the class-action tort system is, and how it can force businesses to adopt bad economic policy while benefiting no one except the lawyers. It’s also a great example of the media’s utter failure in the 2008 election to take a serious look at Obama’s track record. Why didn’t this come out? Even John Edwards’ law practice got some scrutiny in 2004 and 2007, before Edwards’ candidacy imploded in scandal.
I daresay that Mitt Romney the Heartless Vampire Capitalist treated his clients a lot better than this, and that they actually profited by their association with him. There is a lesson in this comparison for voters.