This is one of the most remarkable speeches given by one of the most remarkable speakers in modern history. We will be posting the video shortly.

“To the families of those we’ve lost; to all who called them friends; to the students of this university, the public servants gathered tonight, and the people of Tucson and Arizona: I have come here tonight as an American who, like all Americans, kneels to pray with you today, and will stand by you tomorrow.

There is nothing I can say that will fill the sudden hole torn in your hearts. But know this: the hopes of a nation are here tonight. We mourn with you for the fallen. We join you in your grief. And we add our faith to yours that Representative Gabrielle Giffords and the other living victims of this tragedy pull through.

As Scripture tells us:

There is a river whose streams make glad the city of God,
the holy place where the Most High dwells.
God is within her, she will not fall;
God will help her at break of day.

On Saturday morning, Gabby, her staff, and many of her constituents gathered outside a supermarket to exercise their right to peaceful assembly and free speech. They were fulfilling a central tenet of the democracy envisioned by our founders – representatives of the people answering to their constituents, so as to carry their concerns to our nation’s capital. Gabby called it “Congress on Your Corner” – just an updated version of government of and by and for the people.

That is the quintessentially American scene that was shattered by a gunman’s bullets. And the six people who lost their lives on Saturday – they too represented what is best in America.

Judge John Roll served our legal system for nearly 40 years. A graduate of this university and its law school, Judge Roll was recommended for the federal bench by John McCain twenty years ago, appointed by President George H.W. Bush, and rose to become Arizona’s chief federal judge. His colleagues described him as the hardest-working judge within the Ninth Circuit. He was on his way back from attending Mass, as he did every day, when he decided to stop by and say hi to his Representative. John is survived by his loving wife, Maureen, his three sons, and his five grandchildren.

George and Dorothy Morris – “Dot” to her friends – were high school sweethearts who got married and had two daughters. They did everything together, traveling the open road in their RV, enjoying what their friends called a 50-year honeymoon. Saturday morning, they went by the Safeway to hear what their Congresswoman had to say. When gunfire rang out, George, a former Marine, instinctively tried to shield his wife. Both were shot. Dot passed away.

A New Jersey native, Phyllis Schneck retired to Tucson to beat the snow. But in the summer, she would return East, where her world revolved around her 3 children, 7 grandchildren, and 2 year-old great-granddaughter. A gifted quilter, she’d often work under her favorite tree, or sometimes sew aprons with the logos of the Jets and the Giants to give out at the church where she volunteered. A Republican, she took a liking to Gabby, and wanted to get to know her better.

Dorwan and Mavy Stoddard grew up in Tucson together – about seventy years ago. They moved apart and started their own respective families, but after both were widowed they found their way back here, to, as one of Mavy’s daughters put it, “be boyfriend and girlfriend again.” When they weren’t out on the road in their motor home, you could find them just up the road, helping folks in need at the Mountain Avenue Church of Christ. A retired construction worker, Dorwan spent his spare time fixing up the church along with their dog, Tux. His final act of selflessness was to dive on top of his wife, sacrificing his life for hers.

Everything Gabe Zimmerman did, he did with passion – but his true passion was people. As Gabby’s outreach director, he made the cares of thousands of her constituents his own, seeing to it that seniors got the Medicare benefits they had earned, that veterans got the medals and care they deserved, that government was working for ordinary folks. He died doing what he loved – talking with people and seeing how he could help. Gabe is survived by his parents, Ross and Emily, his brother, Ben, and his fianc??©e, Kelly, who he planned to marry next year.

And then there is nine year-old Christina Taylor Green. Christina was an A student, a dancer, a gymnast, and a swimmer. She often proclaimed that she wanted to be the first woman to play in the major leagues, and as the only girl on her Little League team, no one put it past her. She showed an appreciation for life uncommon for a girl her age, and would remind her mother, “We are so blessed. We have the best life.” And she’d pay those blessings back by participating in a charity that helped children who were less fortunate.

Our hearts are broken by their sudden passing. Our hearts are broken – and yet, our hearts also have reason for fullness.

Our hearts are full of hope and thanks for the 13 Americans who survived the shooting, including the congresswoman many of them went to see on Saturday. I have just come from the University Medical Center, just a mile from here, where our friend Gabby courageously fights to recover even as we speak. And I can tell you this – she knows we’re here and she knows we love her and she knows that we will be rooting for her throughout what will be a difficult journey.

And our hearts are full of gratitude for those who saved others. We are grateful for Daniel Hernandez, a volunteer in Gabby’s office who ran through the chaos to minister to his boss, tending to her wounds to keep her alive. We are grateful for the men who tackled the gunman as he stopped to reload. We are grateful for a petite 61 year-old, Patricia Maisch, who wrestled away the killer’s ammunition, undoubtedly saving some lives. And we are grateful for the doctors and nurses and emergency medics who worked wonders to heal those who’d been hurt.

These men and women remind us that heroism is found not only on the fields of battle. They remind us that heroism does not require special training or physical strength. Heroism is here, all around us, in the hearts of so many of our fellow citizens, just waiting to be summoned – as it was on Saturday morning.

Their actions, their selflessness, also pose a challenge to each of us. It raises the question of what, beyond the prayers and expressions of concern, is required of us going forward. How can we honor the fallen? How can we be true to their memory?

You see, when a tragedy like this strikes, it is part of our nature to demand explanations – to try to impose some order on the chaos, and make sense out of that which seems senseless. Already we’ve seen a national conversation commence, not only about the motivations behind these killings, but about everything from the merits of gun safety laws to the adequacy of our mental health systems. Much of this process, of debating what might be done to prevent such tragedies in the future, is an essential ingredient in our exercise of self-government.

But at a time when our discourse has become so sharply polarized – at a time when we are far too eager to lay the blame for all that ails the world at the feet of those who think differently than we do – it’s important for us to pause for a moment and make sure that we are talking with each other in a way that heals, not a way that wounds.

Scripture tells us that there is evil in the world, and that terrible things happen for reasons that defy human understanding. In the words of Job, “when I looked for light, then came darkness.” Bad things happen, and we must guard against simple explanations in the aftermath.

For the truth is that none of us can know exactly what triggered this vicious attack. None of us can know with any certainty what might have stopped those shots from being fired, or what thoughts lurked in the inner recesses of a violent man’s mind.

So yes, we must examine all the facts behind this tragedy. We cannot and will not be passive in the face of such violence. We should be willing to challenge old assumptions in order to lessen the prospects of violence in the future.

But what we can’t do is use this tragedy as one more occasion to turn on one another. As we discuss these issues, let each of us do so with a good dose of humility. Rather than pointing fingers or assigning blame, let us use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together.

After all, that’s what most of us do when we lose someone in our family – especially if the loss is unexpected. We’re shaken from our routines, and forced to look inward. We reflect on the past. Did we spend enough time with an aging parent, we wonder. Did we express our gratitude for all the sacrifices they made for us? Did we tell a spouse just how desperately we loved them, not just once in awhile but every single day?

So sudden loss causes us to look backward – but it also forces us to look forward, to reflect on the present and the future, on the manner in which we live our lives and nurture our relationships with those who are still with us. We may ask ourselves if we’ve shown enough kindness and generosity and compassion to the people in our lives. Perhaps we question whether we are doing right by our children, or our community, and whether our priorities are in order. We recognize our own mortality, and are reminded that in the fleeting time we have on this earth, what matters is not wealth, or status, or power, or fame – but rather, how well we have loved, and what small part we have played in bettering the lives of others.

That process of reflection, of making sure we align our values with our actions – that, I believe, is what a tragedy like this requires. For those who were harmed, those who were killed – they are part of our family, an American family 300 million strong. We may not have known them personally, but we surely see ourselves in them. In George and Dot, in Dorwan and Mavy, we sense the abiding love we have for our own husbands, our own wives, our own life partners. Phyllis – she’s our mom or grandma; Gabe our brother or son. In Judge Roll, we recognize not only a man who prized his family and doing his job well, but also a man who embodied America’s fidelity to the law. In Gabby, we see a reflection of our public spiritedness, that desire to participate in that sometimes frustrating, sometimes contentious, but always necessary and never-ending process to form a more perfect union.

And in Christina…in Christina we see all of our children. So curious, so trusting, so energetic and full of magic.

So deserving of our love.

And so deserving of our good example. If this tragedy prompts reflection and debate, as it should, let’s make sure it’s worthy of those we have lost. Let’s make sure it’s not on the usual plane of politics and point scoring and pettiness that drifts away with the next news cycle.

The loss of these wonderful people should make every one of us strive to be better in our private lives – to be better friends and neighbors, co-workers and parents. And if, as has been discussed in recent days, their deaths help usher in more civility in our public discourse, let’s remember that it is not because a simple lack of civility caused this tragedy, but rather because only a more civil and honest public discourse can help us face up to our challenges as a nation, in a way that would make them proud. It should be because we want to live up to the example of public servants like John Roll and Gabby Giffords, who knew first and foremost that we are all Americans, and that we can question each other’s ideas without questioning each other’s love of country, and that our task, working together, is to constantly widen the circle of our concern so that we bequeath the American dream to future generations.

I believe we can be better. Those who died here, those who saved lives here – they help me believe. We may not be able to stop all evil in the world, but I know that how we treat one another is entirely up to us. I believe that for all our imperfections, we are full of decency and goodness, and that the forces that divide us are not as strong as those that unite us.

That’s what I believe, in part because that’s what a child like Christina Taylor Green believed. Imagine: here was a young girl who was just becoming aware of our democracy; just beginning to understand the obligations of citizenship; just starting to glimpse the fact that someday she too might play a part in shaping her nation’s future. She had been elected to her student council; she saw public service as something exciting, something hopeful. She was off to meet her congresswoman, someone she was sure was good and important and might be a role model. She saw all this through the eyes of a child, undimmed by the cynicism or vitriol that we adults all too often just take for granted.

I want us to live up to her expectations. I want our democracy to be as good as she imagined it. All of us – we should do everything we can to make sure this country lives up to our children’s expectations.

Christina was given to us on September 11th, 2001, one of 50 babies born that day to be pictured in a book called “Faces of Hope.” On either side of her photo in that book were simple wishes for a child’s life. “I hope you help those in need,” read one. “I hope you know all of the words to the National Anthem and sing it with your hand over your heart. I hope you jump in rain puddles.”

If there are rain puddles in heaven, Christina is jumping in them today. And here on Earth, we place our hands over our hearts, and commit ourselves as Americans to forging a country that is forever worthy of her gentle, happy spirit.

May God bless and keep those we’ve lost in restful and eternal peace. May He love and watch over the survivors. And may He bless the United States of America.”

Nobel Peace Prize-winning Chinese dissident Liu Xiaobo dedicated the award to people killed in the 1989 crackdown on pro-democracy protests, reports said on Monday, while Chinese media said the prize showed the West feared China.

The rival responses to Liu’s award, announced on Friday, have laid bare the raw tensions between China’s ruling Communist Party and critics, at home and abroad, pressing for democratic change.

Those tensions still draw on sensitive memories of 1989.

Liu, serving 11 years in jail for campaigning for democratic transformation of China’s one-party state, told his wife Liu Xia the award was a tribute to citizens killed that year when troops moved in to crush the protests centered on Tiananmen Square in central Beijing.

“This prize goes to all of those who died on June 4, 1989,” he told her, according to Norway’s Dagbladet newspaper, citing a message from Liu Xia after she visited him in prison.

State-controlled Chinese newspapers countered that the prize to Liu, once reviled by Beijing as a traitorous “black hand” behind the 1989 protests, showed a prejudiced West afraid of China’s rising wealth and standing.

“The awarding of the Nobel Peace Prize to ‘dissident’ Liu Xiaobo was nothing more than another expression of this prejudice, and behind it lies an extraordinary terror of China’s rise and the Chinese model,” said the Global Times, a popular Chinese-language tabloid that has led the media charge against the Nobel decision.

If Liu’s calls for a multi-party democracy in China were followed, a commentary in the paper said: “China’s fate would perhaps be no better than the former Soviet Union and Yugoslavia, and the country probably would have quickly collapsed.”

The China Daily, one of the government’s main English-language mouthpieces, said the award was “part of the plot to contain China.”

The Nobel exposed “the deep and wide ideological rift between this country and the West,” said the paper.

Liu, 54, has been a thorn in the government’s side since 1989. He has been in and out of jail ever since for his campaigning for freedom of speech and political liberalization.

Liu’s prize was applauded in the United States and Europe, and President Barack Obama called for his release.

China’s Foreign Ministry has responded by calling the prize an “obscenity” and by blaming the Norwegian government, though the government in Oslo has no say in who gets the award.

Beijing canceled a meeting scheduled in China this week with the Norwegian fisheries minister to show its ire, the Norwegian Foreign Ministry said on Monday.

NO CONTACT WITH LAUREATE’S WIFE

Liu Xiaobo’s wife, Liu Xia, also said she had been “put under house arrest,” the Dagbladet reported.

Liu’s lawyer, Shang Baojun, told Reuters that he had been unable to contact her.

“She’s probably at home with communications cut off, under surveillance,” he said, citing messages on the Internet.

Rights groups have also reported that other activists and dissidents have been detained since the prize was announced.

Many signatories of the “Charter 08″ petition that called for sweeping political reforms have either been locked away, put under house arrest or otherwise harassed.

Popular online Chinese portals such as search engine Baidu have disabled searches for Liu’s name.

In Hong Kong, which enjoys considerable freedoms as a special administrative territory of China, a small group of protesters demanding Liu’s release gathered outside the liaison office that represents Beijing.

“The authoritarian regime can either go down in history or they have to transform themselves in a peaceful and orderly manner,” said pro-democracy lawmaker Albert Ho.

(Additional reporting by Ben Blanchard, James Pomfret in Hong Kong, Ralph Jennings in Taipei and Joachim Dagenborgin Oslo; Editing by Alex Richardson)

and KARL RITTER

The Associated Press

October 6, 2010 12:14AM

New York • It is the thinnest and strongest material known to mankind — no thicker than a single atom and 100 times tougher than steel. Could graphene be the next plastic? Maybe so, says one of two scientists who won a Nobel Prize on Tuesday for isolating and studying it.

Faster computers, lighter airplanes, transparent touch screens — the list of potential uses runs on. Some scientists say we can’t even imagine what kinds of products might be possible with the substance, which hides in ordinary pencil lead and first was extracted using a piece of Scotch tape.

Two Russian-born researchers shared the physics Nobel for their groundbreaking experiments with graphene, which is a sheet of carbon atoms joined together in a pattern that resembles chicken wire.

Andre Geim and Konstantin Novoselov of the University of Manchester in England used Scotch tape to rip off flakes of graphene from a chunk of graphite, the stuff of pencil leads. That achievement, reported just six years ago, opened the door to studying what scientists say should be a versatile building block for electronics and strong materials.

And the world takes another step forward. These Russian born scientists are working at the University of Manchester in socialist England.

The research project has undoubtedly been financed by taxpayer funds, another achievement of good government.

The anti-government crowd will be swarming all over this government sponsored discovery to get patents on new products that will all flow from this government research project, and then they will take their exorbitant earnings and spend campaign money to elect anti-government candidates so that the government will damn well never have any more research projects at taxpayer expense.

The anti-government crowd is nuts.

“It has all the potential to change your life in the same way that plastics did,” Geim, 51, a Dutch citizen, told The Associated Press. “It is really exciting.”

Michael Strano, a chemist at MIT, said trying to predict its uses would be “folly … We can’t even imagine the uses we’re going to find.”

But he and others have some ideas. Graphene’s electrical properties mean it might make for faster transistors, key components of electronic circuits, and so lead to better computers, the Nobel committee says. As a single layer of carbon atoms it’s tiny, which could pay off in more powerful cell phones, several scientists said.

And since it’s practically transparent, it could lead to see-through touch screens and maybe solar cells, the committee says. It might also pay off for big TV screens.

Its tremendous strength could produce new composite materials that are super-strong and lightweight, for use in building airplanes, cars and satellites, the committee says.

—

On the Web

O For more Nobel Prize news and analysis • www.nobelprize.org

Cael Sanderson, 159-0

(This column was written in 2006 and published in Fairways Magazine)

As children we all choose heroes.

We took personal ownership of our chosen heroes. They were ours. We protected them. We fought for them. We cheered them and defended them. And our heroes were always better than anyone else’s heroes and there were even arguments about it. And when they won we were proud, and their success enhanced our own self value, and in fact, there was a certain unrealistic transformation taking place wherein we actually felt that our support was helping them succeed.

When we discovered that one of our friends also shared our same heroes, then we suddenly realized that our friend was not only a friend, but a friend with very good sense.

My first big hero was Jackie Robinson. After that they came in bunches, including Bob Cousy, Bill Russell, Roy Campenella, Ted Williams, and Yogi Berra. New stars would come on the scene, Roger Bannister, Bob Beamon, Mohammed Ali, John Wooden, Larry Bird, Magic Johnson, Michael Jordan. The ones we chose remained our heroes and it took a lot for any other would-be-heroes to bump our originals off the top perch. One of the new ones who has moved right to the top is Tiger Woods, whose composure, grace, and determination are unmatched in golf today.

My heroes were mostly athletes. Subconsciously they were divided into two groups, the ones who were far away we would never know personally, and the ones who defended the home turf and who could be seen and touched, such as dynamic duos Arnie Ferrin and Vern Gardner, Mel Hutchins and Roland Minson, and Stockton to Malone.

As a kid I remember lying on the floor by the radio listening with my dad to the voice say “Let’s go with Utoco to the basketball game,” and cheering whenever the Aggies, Utes, and Cougars were playing.

Time moved on and the hero list grew, and to the top of the list went Arnold Palmer and Jack Nicklaus. It grew closer and closer to home with Merlin Olsen, L.J. Silvester, Max Perry, Cornell Green, Bill Munson, Lee Grosscup, John Ralston, Wayne Estes, and Billy McGill. After he moved to Utah Billy Casper joined the list, and of course, Johnny Miller, Kresimir Cosic, LaDell Andersen, LaVell Edwards, Stan Watts, Dick Motta, Steve Young, Danny Ainge, Frank Layden, Mike Reid, and Jay Don Blake were just some of the local heroes who made it big in the Big Time.

Those in the Utah Golf Hall of Fame and our UGA Gold Club are all on my hero list.

As we mature our list broadens from athletes to other areas of interest, and some of our heroes don’t become so until after they’ve passed on and we only become aware of their greatness after the fact. My list includes Nelson Mandella, Martin Luther King, Michel Gorbachev, Albert Einstein, Jimmy Carter, Eleanor Roosevelt, Frank Sinatra, Bob Hope, and William Greider.

Sometimes we each attach to a ‘special’ hero, one that you can almost call your own. One that the world hasn’t really idolized, but you are way smarter than the rest of the world, and he is your ‘special’ find.

I have one of those heroes. He was featured on the Wheaties box, and so he is no secret, but he is not known far and wide. His achievement was slow and obscure and was building without much public notice and when he finally reached the pinnacle it was suddenly all over. He won’t be forever in the public eye, but his achievement may never be matched.

His achievement was so obscure that I didn’t even know about it until I saw the Wheaties box. His name was Sanderson. He was a wrestler. I knew that name. I had written about a wrestler named Sanderson years before. I wondered about the connection. It was close. It was his dad.

I took that Wheaties box home, and placed it in a prominent place in my den, right on the television where I could see it as a daily reminder of the possibilities of the human spirit.

The Wheaties Breakfast of Champions box declared,

“Cael Sanderson, 159-0.”

Cael Sanderson. Cael!! The name itself is so majestic. I wonder if he would have achieved such high levels of success if he had been named Joe, or John, or Bill. How much does your name mean to you? Is your very name a motivator for excellence? An intimidator of foe?

Cael!! How would you like to fight a Cael? “In this corner Cael Sanderson. In this corner Shrinking Violet.”

159-0. Just what is that all about? Stunning—that’s what it’s all about. At Iowa State, competing in the toughest wrestling league in America, he won his first college match, and his second, and his third and on through his freshman year, and his sophomore year, and his junior year, and his senior year, and yes, four straight NCAA championships with 159 straight wins and zero losses. That unbelievable winning streak occurred over a four year period of time that included normal life crises such as flu, colds, nagging injuries, personal relationships, dating, marriage, jobs, bills to pay, tests to take, making weight, not to mention that all of your opponents are studying films to find your Achilles Heel and lying in wait to beat the unbeatable, but to no avail.

“In this corner, Cael Sanderson. In this corner Shrinking Violet,” all 159 of them.

It is, in my mind, the single greatest athletic achievement ever. Bar none. We could have some healthy arguments over it, but that’s my choice as the greatest of all.

And then, to top it all off, he went on to win the Gold Medal at the Olympics, an incredible achievement made almost incidental by his unbelievable collegiate record. And oh, incidentally, he also won four straight Utah State High School championships.

Yes, that’s right. This hero hails from Heber, a Wasp from Wasatch High School. A local hero making it big in the Big Time.

Do heroes have heroes? Of course, and one of Cael’s childhood heroes was the Bill Probst family. Bill’s son Jake is one of Cael’s best friends.

Bill Probst was the chairman of the Utah State Amateur this year and through Bill we were able to get Cael to speak at our traditional Breakfast of Champions. This year the centerpiece on each of the tables was a Wheaties Breakfast of Champions box featuring our guest speaker. It brought extra meaning to the specialness of our Champions Breakfast that has featured many other heroes, including Bill Korns, Frank Layden, LaVell Edwards, Arnie Ferrin, Bill Korns, and most of our former champions.

Sanderson’s personality came through immediately, quiet, modest, soft spoken, intense, focused:

“Success is a choice….We are responsible for what we think, for what we do, and what we say….If you see a person on top of a mountain you know he didn’t just fall there…Don’t focus on the hurricane around you, focus on the eye of the hurricane….expect obstacles….If you’re going through hell, keep on going….A dog who hunts doesn’t stop to scratch his fleas.”

Those were some of the tidbits Cael gave to a riveted audience that included the 32 match play finalists and our former champions, and for me, getting to meet and listen to my heroes at the Breakfast of Champions will always remain part of the thrill of the tournament I love the most, The Utah State Amateur Championship.

Associated Press

Published: Wednesday, Jan. 13, 2010 9:03 p.m. MST

WASHINGTON — Challenged by a skeptical special commission, top Wall Street bankers apologized Wednesday for risky behavior that led to the worst financial crisis since the Great Depression. But they still declared it seemed appropriate at the time.

The bankers — whose companies collectively received more than $100 billion in taxpayer assistance to weather the crisis — offered no regrets for executive pay that is now likely to increase as a result of their survival. They did say they are correcting some compensation practices that could lead to excessive risk-taking.

The tension at the first hearing of the Financial Crisis Inquiry Commission was evident from the outset.

“People are angry,” commission Chairman Phil Angelides said. Reports of “record profits and bonuses in the wake of receiving trillions of dollars in government assistance while so many families are struggling to stay afloat has only heightened the sense of confusion,” he said.

Lloyd Blankfein, the chief executive of Goldman Sachs, took the brunt of the questions, especially on his firm’s practice of selling mortgage-backed securities and then betting against them.

“I’m just going to be blunt with you,” Angelides told him. “It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars.”

Way to go Chairman Angelides. You couldn’t have described it better. Now what will Congress do about it? Nothing!! This is all show. The politicians are bought by the bankers. There will be no consequences. They will all put on a proper show in public and tip toasts in private and share the wealth.

We need usury laws and we need them now!

That whole crowd of bankers should be fired. Their banking licenses should be rescinded, and many of them ought to be in jail. None of that’s going to happen. The ‘to little’ banks are going to be cleared out and the ‘to big to fail banks’ are going to take over those deposits and get even bigger. Banking has been consolidated in the hands of a few big banks and they have been in cahoots on setting the outrageous banking policies that have been ripping off hard working Americans who have to live from paycheck to paycheck minus bank charges and fees.

The only class of people that ever stirred the anger of Jesus were the moneychangers.

It’s interesting that our society actually protects the wrong bank robbers. The ones in coat and ties are the ones making the biggest hauls.

Blankfein replied: “I do think the behavior is improper. We regret the consequence that people have lost money in it.” Later, though, he defended the firm’s actions as “exercises in risk management.”

In a moment of self-analysis, Blankfein said the world of high-finance simply rationalized its way into risky transactions. Summarizing the thinking in the industry at the time, he said: “Gosh, the world is getting wealthier. Technology has done things. … These businesses are going to do well.”

“You talked yourself into a place of complacency,” he concluded.

The panel began its yearlong inquiry amid rising public fury over bailouts and bankers’ pay. House Financial Services Committee Chairman Barney Frank, D-Mass., said Wednesday he will hold a hearing next week on bank compensation, looking to expand legislation that already passed the House. Sen. Bill Nelson, D-Fla., wrote to President Barack Obama on Wednesday suggesting legislation that would use banks’ tax breaks as incentives for pay based on performance.

“We understand the anger felt by many citizens,” said Brian Moynihan, chief executive and president of Bank of America. “We are grateful for the taxpayer assistance we have received.”

“Over the course of the crisis, we as an industry caused a lot of damage,” Moynihan said.

With Bank of America having repaid its bailout money, he said “the vast majority of our employees played no role in the economic crisis” and do not deserve to be penalized with lower compensation. Moynihan said compensation levels will be higher next year than they were in 2008 — but not at levels reached before the financial meltdown.

Jamie Dimon, chief executive of JPMorgan Chase & Co., said most of his employees took “significant cuts in compensation” in 2008. He said his company would continue to pay people in a “responsible and disciplined manner” to attract and retain top talent.

Still, Dimon said, “We did make mistakes and there were things we could have done better.”

John Mack, chairman of Morgan Stanley, said the crisis was “a powerful wake-up call for this firm.” He said he didn’t take a bonus in 2009 and his bank has overhauled its compensation practices to discourage “excessive risk-taking.”

The other executives also said their companies had tightened bonus policies, including provisions to “claw back” some of the money when performance falters.

Outside experts say the banks’ changes to executive compensation move them in the right direction, effectively tying pay to long-term performance. Giving more pay in long-term stock and allowing take-backs in extreme cases should discourage excess risk, said Jeff Vistithpanich, principal at Johnson & Associates, a New York financial services consulting firm.

But he said that won’t quell public outrage.

“Whether Lloyd Blankfein gets $50 million in cash or stock or paper, the fury will be there, the anger and scrutiny will be there,” Vistithpanich said. “There’s going to be a firestorm either way.”

John Taylor, head of the National Community Reinvestment Coalition, a group that promotes affordable housing, said that if bankers missed multiple indicators that a housing crisis was upon them, “then their spirited defense of their employees falls flat.”

“Based on what we heard today,” Taylor said, “they should be firing people, not giving them bonuses.”

The four bankers represent institutions that collectively received more than $90 billion in direct government assistance from the $700 billion federal bank bailout and availed themselves of billions more from the Federal Reserve. Goldman Sachs received an additional $12.9 billion in bailout money designated to rescue insurer American International Group.

At the White House, press secretary Robert Gibbs said that Obama will outline his plan today to make sure taxpayers are able to recoup the money they are owed from the bailouts. The president is expected to announce a new fee on the country’s biggest financial firms to recover up to $120 billion.Of the bankers’ testimony, Gibbs said, “It would seem to me that apology would be the least of what anybody could expect.” He said Wall Street officials need to show common sense.

The bankers said they supported tighter oversight, but warned against going too far. Congress is considering limiting the size of financial companies or breaking up companies whose failure could collapse the whole financial system.

The commission’s vice chairman, former Rep. Bill Thomas, R-Calif., said the inquiry would try “to get to the bottom of what happened and explain it in a way that the American people can understand.”

Thomas, a former chairman of the tax-writing House Ways and Means Committee, said one important question is, “If you knew then what you do now, what would you have done differently?”

Dimon said a crucial blunder was “how we just missed that housing prices don’t go up forever.” Added Mack: “We did eat our cooking and we choked on it.”

© 2010 Deseret News Publishing Company | All rights reserved

Salt Lake Tribune

Kim Peek, the Murray man who inspired the 1988 movie “Rain Man,” died Saturday of a sudden heart attack.

Peek, 58, was likely the world’s most famous savant, enduring mental handicaps while at the same time possessing extraordinary gifts of memory and recall.

“He had a depth and breadth of knowledge and a memory that was just unbelievable,” said Daniel Christensen, a professor with the University of Utah’s Neuropsychiatric Institute. “He was unique. I don’t know if there will ever be another person quite like Kim.”

In recent weeks, Kim Peek had suffered from an upper respiratory infection, his father, Fran Peek, said Monday afternoon. Peek had been retaining water, gaining nearly 30 pounds. Water pills did not seem to ease the situation.

Peek was born on Nov. 11, 1951. At 9 months, doctors said he was severely mentally retarded.

“They told us we should institutionalize him because he would never walk or talk,” Fran Peek said. “But we refused to do that.”

By 16 months, Peek demonstrated extraordinary abilities. He could read and memorize entire volumes of information.

“He could find anything he wanted to. He read all of Shakespeare, the Old and New Testaments,” Fran Peek said.

An MRI later showed that his brain lacked a corpus callosum — the connecting tissue between the left and right hemispheres. Peek said his son’s brain lacked the normal filtering system for receiving information. The condition left him able to retain nearly 98 percent of everything he read, heard or watched on television. The average person only retains about 45 percent.

As both a child and adult, Peek’s favorite place was the library, where he devoured books at a confounding rate. At the time of his death, Peek is believed to have committed at least 9,000 books to memory. He could recite so many gigabytes of facts that people often called him Kim-puter. NASA made him the subject of MRI-based research.

Peek, who was shy and withdrawn, spent most of his early years among his family and friends. However, his life took a swift turn in 1984, when he met screenwriter Barry Morrow. Peek’s personality impressed Morrow, who wrote the screenplay for “Rain Man.” The movie, starring Dustin Hoffman as a savant, and Tom Cruise as his brother, won four Academy Awards including Best Picture, Best Director, Best Actor for Hoffman and Best Screenplay for Morrow.

The movie’s popularity forced Peek to break out of his shell. He spent the next 21 years traveling the world mesmerizing audiences with his mental abilities. He has spoken to more than 64 million people and traveled nearly 3 million air miles, his father said. There have been 2,800 newspaper and magazine articles and 22 documentaries about Peek and his extraordinary capabilities.

While he always amazed people with his ability to recite facts, Kim Peek always encouraged his audiences to recognize and respect differences and treat others like they would want to be treated, said his father. The father-son pair, who were inseparable, also worked to get equal educational opportunities for the disabled.

While Peek was known for his amazing ability to retain and recite facts, he also was musical genius, said April Greenan a musicologist and director of the U. of U.’s McKay Music Library.

“He could talk about musical form in an intricate, specific and authoritative way,” said Greenan, who met Peek about seven years ago. She said Peek could hear just a few bars of a piece of music and be able to sort out the patterns and explain how it was similar to other pieces of music by other composers and from different eras.

“You couldn’t program a computer with the thousands of pieces of music in Kim’s head,” Greenan said. “He was beyond anything anyone in music has ever known.”

Peek is survived by his father, his mother, Jeanne W. Buchi, one brother and one sister.

A funeral will be Dec. 29. Details are pending.

And another one bites the dust. So much for the ’sanctity of marriage.’ The Republican Party has become a hiding place, a closet, for hypocrites. They pompously wear their religion on their sleeve and condemn gays while preaching the sanctity of marriage. When they are forced out of their hypocritical closets it makes their preaching ‘as sounding brass and tinkling cymbals.’ I Corinthians 13:1

From Herald Staff and Wire Reports

After going AWOL for seven days, Gov. Mark Sanford admitted Wednesday in a bombshell news conference he had secretly flown to Argentina to visit a woman with whom he was having an affair.Wiping away tears, the 49-year-old governor stood in the Statehouse and apologized to his wife and four sons, saying he would step down as head of the Republican Governors Association.”I’ve been unfaithful to my wife,” he said during an emotional speech in which he ruminated aloud with remarkable frankness on God’s law, moral absolutes and following one’s heart.

The Fort Lauderdale native, who had been recently mentioned as a possible presidential candidate in 2012, ignored questions about whether he would step down as governor of the Palmetto State.

As a congressman, Sanford voted in favor of three articles of impeachment against President Bill Clinton, citing the need for “moral legitimacy.”

The governor’s affair deals yet another blow to the emerging leadership of the GOP, which has been searching for potential presidential candidates since the November elections. U.S. Sen. John Ensign of Nevada was considered a rising star before admitting last week to having an affair with a close family friend.

Sanford told reporters Wednesday his affair is over, describing the woman as a ”dear, dear friend” whom he has known for eight years and has been romantically involved with for about a year. He said his wife found out about the relationship five months ago.

E-mail exchanges between the governor and the woman were obtained by The State newspaper and posted online Wednesday.

In the exchanges, Sanford recounted a meeting with Sen. John McCain, then the GOP nominee for president. In that e-mail, Sanford told his lover, whom The State identified only as ”Maria,” that the visit had sparked discussion of Sanford as a possible vice presidential candidate.

During the news conference Wednesday, Sanford declined to talk about specifics of his affair other than to say, “It was wrong. Period.”

His family did not attend the conference, and his wife Jenny Sanford said she asked the governor to leave and stop speaking to her two weeks ago.

The governor says he wants to reconcile — his wife’s recent statement offering some hope her husband has earned a chance to resurrect their marriage.

”This trial separation was agreed to with the goal of ultimately strengthening our marriage,” she said.

Sanford denied instructing his staff to cover up his affair, but acknowledged that he told them he thought he would be hiking on the Appalachian Trail and never corrected that impression after leaving for South America.

”I let them down by creating a fiction with regard to where I was going,” Sanford said. “I said that was the original possibility. Again, this is my fault in . . . shrouding this larger trip.”

Sanford’s admission capped days of speculation about his whereabouts after he disappeared from the state capital for nearly a week. After reporters started asking questions, his office had said he had gone hiking on the trail.

Cornered at the Atlanta airport by a reporter from The State newspaper, Sanford revealed Wednesday morning that he had gone to Argentina for a seven-day trip.

When news first broke about his mysterious disappearance, Jenny Sanford told The Associated Press she did not know where her husband had gone for the Father’s Day weekend.

Sanford began his news conference musing openly of his love of hiking and how he used to guide trips along the Appalachian Trail, and eventually tearfully apologized to his wife, his staff and his friends — but without yet saying what he was apologizing for.

”I hurt a lot of different folks,” he said, occasionally choking up throughout the news conference that lasted about 20 minutes.

With those watching still wondering what he was admitting, Sanford said: “The odyssey that we’re all on in life is with regard to heart.”

He went on to ask reporters not to bother his wife and children. “Jenny has stood by me through campaign after campaign, through hard time after hard time, and neither she nor the boys deserve this. Please offer them your prayers.”

Several residents said they were disappointed.

”He shouldn’t have lied to us. He should have been straight,” said college student Gerald Walker, 19, in downtown Columbia. “It’s very embarrassing for someone in a leadership role that we are supposed to respect, especially me being a young guy.”

Glenn Mitchell, of Columbia, said he felt Sanford’s absence showed a lack of concern for the state.

”He left the state unattended,” said Mitchell, 54, out of work recuperating from surgery. “He just hasn’t been there for us.”

State Rep. Todd Rutherford, D-Columbia, called for Sanford’s resignation.

”There is nothing left to save,” Rutherford said. “There is no reason for him to remain as governor.”

Sanford has deep ties to South Florida. He was born in Fort Lauderdale in 1960 and attended Westminster Academy, a Christian school established in 1971 by the late D. James Kennedy, founding pastor of Coral Ridge Presbyterian Church.

Always a straight arrow, Sanford became a highly decorated Broward Boy Scout, reaching the rank of Eagle Scout. In the 1970s, Sanford was a member of Westminster’s track team and was state ranked as a short-distance runner. Before his senior year at Westminster, his parents moved to a plantation near Beaufort, S.C.

He received his bachelor’s degree from Furman University and went on to the University of Virginia, where he received an MBA in 1988. He spent two years on Wall Street and eventually returned to South Carolina, winning three terms as a congressman. He was elected governor in 2002 and has more than a year remaining in his second term.

The libertarian-leaning Republican was seldom a firebrand. But he was known for salting tales of family life into policy discussions.

He criticized the $787 billion federal stimulus law and efforts by legislators to claim a share of it by saying in tough times a family would sit around the table and find ways to cut spending.

His vocal battle against the Obama administration over the stimulus money won praise from conservative pundits, but ultimately, a state court order required him to take the money.

Jenny Sanford, a millionaire whose family fortune comes from the Skil Corp. power tool company, has been central to Sanford’s political career. She ran his congressional campaigns and his first race for governor. She was an almost daily fixture at senior staff meetings, and often could be seen driving a minivan away from the Statehouse in the mornings.

The two met when Sanford was on Wall Street; she was working at a brokerage house while he was entering a financial training program.

As governor, Sanford has had seemingly endless run-ins with the GOP-dominated Legislature, once bringing pigs to the House chamber to protest pork barrel spending. He also put a ”spending clock” outside his office to show how quickly a proposed budget would spend state money.

The son of the couple at the center of the sex scandal that has engulfed Sen. John Ensign was being paid by National Republican Senatorial Committee in 2008 at the same time his mother was having an affair with the Nevada Republican.

Both Doug and Cynthia Hampton were already working in senior positions for Ensign when their son Brandon Hampton was hired to do “research policy consulting” for the NRSC in March 2008.

The younger Hampton, 19, was paid $5,400 before he left the Ensign office in August last year, Federal Election Commission records show.

That means during March and April 2008, three members of the Hampton family were working for Ensign. Both Doug and Cynthia Hampton stopped working for Ensign at the end of April 2008.

According to people familiar with the matter, Ensign’s affair with Hampton took place between December 2007 and August 2008.

A trusted political aide, Cynthia Hampton served as the treasurer for both Ensign’s reelection campaign and for his leadership fund, Battle Born PAC. She received $10,620 through the Battle Born PAC during January to April 2008 – a pay rate that was far higher during that four-month period than the $11,767 she received from the committee during all of 2007.

The Politico 44 Story Widget Requires Adobe Flash Player.

Cynthia Hampton was also paid $11, 912 by Ensign’s reelection campaign between Jan. 2007 and April 2008, with her monthly salary doubling later in the year.

According to Senate payroll records, Doug Hampton served as Ensign’s administrative assistant in his personal office from November 2006 to May 2008, departing around the same time Cynthia Hampton left Ensign’s political committees. After leaving Ensign’s office, Doug Hampton went to work for a Las Vegas political consulting firm called November Inc. which is run by several former Ensign aides.

Doug Hampton was paid about $101,000 for seven months of work in fiscal 2008 – a higher monthly rate than he was previously paid. He made $144,000 in all of 2007.

Associated Press
9:06 p.m. MDT

WASHINGTON — A former campaign aide to Sen. John Ensign confirmed her involvement Wednesday in an extramarital affair with the conservative Republican, lamented his decision to “air this very personal matter” and said she eventually would tell her side of the story.

An attorney for Cindy Hampton and her husband, Doug, issued a statement on their behalf as Ensign phoned in his resignation as a member of the Senate GOP leadership. The senator’s aides refused to return phone calls seeking additional details about a dalliance that pushed the 51-year-old Nevada lawmaker’s political career to the brink of disaster.

An Associated Press review of federal records showed Cynthia Hampton, 46, received a promotion and a pay raise around the time of the affair at one political entity controlled by Ensign and a pay raise at a second. Her husband was an employee in Ensign’s Senate office.

Ensign told a hastily arranged news briefing on Tuesday he had an extramarital affair with a woman on his campaign payroll, and it lasted several months, ending last August.

Let it be noted that Senator Ensign was highly critical of President Clinton and supportive of impeachment, and has always been vociferously against gay rights for ‘moral’ reasons, and was also a voice that called for the resignation of Idaho Senator Larry Craig for his gay dalliance.  Also, Ensign is a member of the publicly self-righteous Promise Keepers and other religious groups. He is another high profile religious hypocrite standing in the way of gay rights. Out with him—he should resign, not his leadership post, but his seat in the senate, not for adultery–but for being such an enormous hypocrite.

The disclosure resurrected questions about a two-week period in 2002, when Ensign abruptly dropped from public view. A person familiar with that episode, speaking on condition of anonymity because of the sensitivity of the matter, said Tuesday the senator told a close associate the absence followed an earlier affair.

In Las Vegas on Wednesday, lawyer Daniel Albregts issued a statement that said “Doug and Cindy Hampton can confirm that they are the individuals referenced by Senator Ensign during his press conference.”

“It is unfortunate the senator chose to air this very personal matter, especially after the Hamptons did everything possible to keep this matter private,” the lawyer said. “It is equally unfortunate that he did so without concern for the effect such an announcement would have on the Hampton family. In time the Hamptons will be ready and willing to tell their side of the story.”

The lawyer declined to answer questions.

Ensign, in his second term, has said he intends to remain in the Senate.

He offered to resign as head of the Republican Policy Committee in a midday phone call with Sen. Mitch McConnell, the party leader.

“He’s accepted responsibility for his actions and apologized to his family and constituents. He offered, and I accepted, his resignation as chairman of the Policy Committee,” said McConnell, R-Ky.

Ensign is a member of the Christian ministry Promise Keepers and has championed causes pushed by the GOP’s conservative religious base while seeking to raise his political profile for a possible presidential campaign.

The senator’s fall from grace was a further blow for Republicans struggling to recover from recent election reversals as well as the political defection of moderate Sen. Arlen Specter of Pennsylvania. Ensign’s announcement also added to an appearance of disarray for the party in Nevada, where GOP Gov. Jim Gibbons has been embroiled in nearly nonstop controversy throughout his term.

This letter appeared in The Salt Lake Tribune, May 30, 2009. Several writers responded and those selected letters are published below.

If the safety of President Barack Obama’s wife and children depended on the extraction of information from terrorists, and he did not use enhanced interrogation techniques if needed to get that information, then he is neither a man nor a true father, nor should he be president of the United States.

We are all endowed with the unalienable rights of life, liberty and the pursuit of happiness, and the government of the United States was instituted to secure these rights. And it is immoral not to use enhanced interrogation techniques in order to protect us and to secure those rights.

Gary Russon

Salt Lake City

Torture’s Costs

Gary Russon believes that it is immoral not to use “enhanced interrogation” to protect our unalienable rights (“Rights by interrogation,” Forum, May 30). I suggest he read David R. Irvine’s studied article, wherein he states that a group of retired Army generals met with a task force evaluating interrogation practices, and “the generals’ message was simple. Brutal interrogation methods endanger and diminish national security, cost lives and are the least-effective means of obtaining useful intelligence” (“Why place the nation at risk with torture?” Opinion, May 30).

I submit that these generals know much more about this subject than Russon does.

Camille R. Cutler

Bountiful

Evil Rapscallion

I am not married and do not have a family of my own, but right now let’s pretend that I do.

According to Gary Russon’s letter (“Rights by interrogation,” Forum, May 30), if I did not track down the person stalking my daughter, tie him up in a chair in my basement and use enhanced torture methods until he confessed to harassing my child, then I am an immoral person who does not deserve to be a father.

After all, I would be letting this evil rapscallion traumatize my daughter. What dad wouldn’t cut off the fingers of a fellow American to protect his family’s rights?

Hmm… Suddenly I sound like I don’t have the right to live with people.

Corky Richard

Salt Lake City

Ironically, this powerful and well-funded gay lobby continues to use rhetoric to promote hate speech, encourage social protest and incite harassment of individuals or groups who oppose their agenda. The Californians Against Hate Web site, an archetype for gay activism (www.californiansagainsthate.com) continues to utilize false implication and exaggeration to impugn anyone who dares oppose them as hatemongers.

An example of this rhetoric is its “dishonor roll,” a comprehensive listing of donors who supported Proposition 8. It includes a specific charge to “Boycott A-1 Self Storage Company” and maliciously targets well over 300 other individuals and organizations who made generous donations supporting Prop 8.

An orchestrated attack against those who support a ban on same-sex marriage has included protest, vandalism and aggressive defamation. This attempted demonization may elicit public attention, but is transparent and disingenuous.

Can you imagine the firestorm of outrage that would erupt if sincere individuals in the gay community were targeted and assailed in an analogous manner?

Doug Roper

Sandy

Watts Cookin’ comment: This article reveals the culprits who were the root cause of the financial meltdown of this country. The people who were running these organizations should be cleaning toilets the rest of their lives, but too many of them remain anonymous. Their names should be posted for all to see. Their actions should affect their reputations. This blog will be revealing these names as they become publicly available.

The top subprime lenders whose practices are largely blamed for triggering the global economic meltdown were owned or bankrolled by banks now collecting billions of dollars in bailout money—including several that have paid huge fines to settle predatory lending charges.

These big institutions were not only unwitting victims of an unforeseen financial collapse, as they have sometimes portrayed themselves, but enablers that bankrolled the type of lending that has threatened the financial system.

These are among the findings of an analysis of government data on nearly 7.2 million “high-interest” or subprime loans made from 2005 through 2007, a period that marks the peak and collapse of the subprime boom. The computer-assisted analysis also reveals the top 25 originators of high-interest loans, accounting for nearly $1 trillion, or about 72 percent of such loans made during that period.

Investigation found that U.S. and European investment banks invested enormous sums in subprime lending due to unceasing demand for high-yield, high-risk bonds backed by home mortgages. Those banks made huge profits while their executives collected handsome bonuses until the bottom fell out of the real estate market.

Investment banks Lehman Brothers, Merrill Lynch, JPMorgan & Co., and Citigroup Inc. both owned and financed subprime lenders. Others, like RBS Greenwich Capital Investments Corp. (part of the Royal Bank of Scotland), Swiss Bank, Credit Suisse, First Boston, and Goldman Sachs & Co., were major financial backers of subprime lenders.

The findings:

• At least 21 of the top 25 subprime lenders were financed by banks that received bailout money—through direct ownership, credit agreements, or huge purchases of loans for securitization.
• Twenty of the top 25 subprime lenders have closed, stopped lending, or been sold to avoid bankruptcy. Most were not banks and were not permitted to collect deposits.
• Eleven of the lenders on the list have made payments to settle claims of widespread lending abuses. Four of those have received bank bailout funds, including American International Group Inc. and Citigroup Inc.

An additional computer analysis of more than 350 million mortgage applications reported to the federal government between 1994 and 2007 found that the amount of money spent by homeowners on their mortgages as a percentage of their income spiked sharply during the peak of the subprime boom.

Subprime does not mean “lower than prime.” In fact, it’s just the opposite. Subprime lenders charge rates that are higher than prime, the rate offered to a bank’s most creditworthy customers—sometimes much higher. Subprime borrowers are generally people with poor credit who may have a recent bankruptcy or foreclosure on their record, according to the Federal Reserve.

Each year, under the Home Mortgage Disclosure Act, the federal government collects reams of data from lenders in an effort to determine whether they are adequately serving their communities and whether there is discrimination against minority borrowers. Some smaller lenders and some that do business in rural areas are not required to report. The government estimates the data account for about 80 percent of all home mortgages. In 2004, the Federal

Reserve began requiring lenders to indicate when borrowers were being charged three percentage points or more above the rate of interest earned on U.S. Treasury bonds of a similar maturity.

The objective was to gather data encompassing “substantially all of the subprime mortgage market while generally avoiding coverage of prime loans,” according to the Federal Reserve.

These loans were analyzed from 2005 through the end of 2007 to come up with its top 25 list of high-interest lenders. (The 2004 data were excluded due to poor compliance and other factors.) The market for these loans, driven by Wall Street investors, grew through the early 2000s, peaked in 2005, and crashed in 2007. The top 25 subprime lenders represent nearly 5 million loans.

Most of the top subprime lenders were high-volume, “non-bank” retail lenders that advertised heavily, generated huge profits, and flamed out when Wall Street benefactors yanked their funding. Nine of the top 10 lenders were based in California—seven were located in either Los Angeles or Orange counties. At least eight of the top 10 were backed at least in part by banks that have received bank bailout money.

Who’s Who in Subprime Financing—The Top 25

Countrywide Financial Corp., which made at least $97.2 billion worth of loans from 2005 through the end of 2007, ranked number 1 among subprime lenders nationally. The company was purchased by Bank of America last year, saving it from probable bankruptcy. Ameriquest Mortgage Co. of Orange, California, now defunct, which originated at least $80.6 billion worth of loans, was number two. Third was now-bankrupt New Century Financial Corp. of Irvine, California, with more than $75.9 billion in loans.

Independent mortgage companies like Ameriquest and New Century were among the most prolific subprime lenders. Since they were not banks, they could not accept deposits, which limited their access to funds. At least 169 independent mortgage companies that reported lending data in 2006 ceased operations in 2007, according to the Federal Reserve.

Some of the nation’s largest banks have subprime lending units, including Wells Fargo & Co., which ranked No. 8, JPMorgan Chase & Co. at No. 12, and Citigroup Inc. at No. 15. The big banks’ mortgage business was less reliant on subprime lending than that of the non-bank lenders. But most of the big investment banks also purchased subprime loans made by other lenders and sold them as securities.

Several other lenders among the Top 25 were subsidiaries of Wall Street banks or hedge funds. Encore Credit Corp. (No. 17), for example, was a subsidiary of Bear Stearns, and BNC Mortgage Inc. was part of Lehman Brothers (No. 11).

The lending totals in the survey include subsidiaries owned by the parent companies. British bank HSBC Holdings plc (No. 9) owned American subsidiary HSBC Finance Corp., which in turn owned subprime lender Decision One and also operated under the names Beneficial and HLC.

Two of the top subprime lenders were seized by the government. IndyMac Bank (No. 14) and Washington Mutual (owner of Long Beach Mortgage Co., No. 5) were each taken over by federal banking regulators after big losses on their portfolios of subprime loans. American International Group (AIG), better known for insurance and complex trades in financial derivatives, made the list at No. 18, thanks to subsidiaries like American General Finance Inc., MorEquity, and Wilmington Finance Inc.

The five banks on the list that are still lending are Wells Fargo, JPMorgan Chase, GMAC LLC, Citigroup, and AIG. All have received billions from the government’s bank bailout programs.

Bailout Recipients

On Oct. 3, 2008, former President Bush signed the $700 billion Emergency Economic Stabilization Act of 2008 into law. The legislation created the “Troubled Asset Relief Program” (TARP) to buy up mortgage-backed securities and hold them, ideally, until they recovered some of their value and could be auctioned. If was hoped that if the so-called “toxic” assets were removed from the banks’ balance sheets, they would begin lending again. The administration later changed direction and opted instead to buy shares of stock from the banks.

In addition to the $700 billion bailout, the Federal Reserve began committing hundreds of billions of dollars to guarantee against losses on failing mortgage assets of AIG, Citigroup, and Bank of America.

Among the lenders on the Top 25 list, seven have received government assistance. Citigroup has collected $25 billion through the TARP program, $20 billion through the Treasury Department’s “targeted investment program,” and a $5 billion Treasury backstop on asset losses. It has also been guaranteed protection from losses on $306 billion in assets. Wells Fargo has collected $25 billion in TARP funds, and Bank of America, which bought Countrywide and Merrill Lynch before their imminent collapse, received another $45 billion in TARP money. Also on the list: JPMorgan Chase (owner of Chase Home Mortgage), Regions Financial Corp. (former owner of EquiFirst), GMAC/Cerberus Capital Management, and Capital One Financial Corp. (former owner of GreenPoint Mortgage). And the bailout of insurance giant AIG may go as high as $187 billion to cover a combination of loans, direct investment by the government, and purchases of shaky assets.

Replies and Responses from the Subprime World

Attempts to reach the CEO and corporate owners on of the Top 25 lenders yielded mixed success.

A call and e-mail to Bank of America were not returned. A Wells Fargo spokesman said the bank carefully reviews a borrower’s ability to pay. “That’s why 93 out of every 100 of our mortgage customers were current on their payments at the end of 2008,” the bank’s Kevin Waetke wrote in an e-mail.

Capital One spokeswoman Tatiana Stead responded that GreenPoint’s loans were considered Alt-A, which generally do not require documentation of income but whose borrowers have good credit. Such loans are not considered subprime, she said, and added that the bank had closed GreenPoint shortly after it was acquired.

Since the confusion and panic of 2008 has receded, angry taxpayers have been looking for someone to blame for the mess. Subprime lenders that originated loans they knew were likely to fail are widely cited as a good place to start. But the subprime lenders could never have done so much damage were it not for their underwriters—those giant investment banks in the U.S., Germany, Switzerland, and England.

During the boom years, investment banks provided a staggering amount of cash to subprime lenders so they could make loans. Between 2000 and 2007, backers of subprime mortgage-backed securities—primarily Wall Street and European investment banks—underwrote $2.1 trillion worth of business, according to data from trade publication Inside Mortgage Finance. The top underwriters in the peak years of 2005 and 2006 were Lehman Brothers at $106 billion; RBS Greenwich Capital Investments Corp., at $99 billion; and Countrywide Securities Corp., a subsidiary of the lender, at $74.5 billion. Also among the top underwriters: Morgan Stanley, Merrill Lynch, Bear Stearns, and Goldman Sachs.

When New Century filed for bankruptcy, it listed Goldman Sachs Mortgage Co. as one of the 50 largest unsecured creditors. Other New Century creditors include Bank of America, Morgan Stanley, Citigroup, Barclays, and Swiss bank UBS. New Century earlier reported to its shareholders that it had lines of credit totaling $14.1 billion from those five banks, plus Bear Stearns, Credit Suisse First Boston, Deutsche Bank, and IXIS Real Estate Capital, a French banking firm (since taken over by a company called Natixis) that frequently worked with Morgan Stanley.

An investigative report prepared for the U.S. Trustee overseeing the bankruptcy case described a “brazen obsession with increasing loan originations, without due regard to the risks associated with that business strategy” at New Century. It said the company made loans “in an aggressive manner that elevated the risks to dangerous and ultimately fatal levels.”

In December 2006, Citigroup pooled $492 million in mortgages to sell to investors as securities, one of several major offerings the bank had packaged for Wall Street. Sixty-three percent of the mortgages were originated by New Century, according to the lengthy prospectus. Eighty-one percent of the loans were adjustable rate mortgages.

Despite their massive investment in subprime loans, some of the nation’s most powerful bankers continue to deflect responsibility. “Demonizing the bankers as if they and they alone created the financial meltdown is both inaccurate and short-sighted,” Citigroup chairman Richard Parsons told reporters recently. “Everybody participated in pumping up this balloon and now that the balloon has deflated, everybody in reality has some part in the blame.”

A lawyer for former New Century CEO Robert K. Cole said he would have no comment.

Attorney Bert H. Deixler, who represents another former New Century CEO, Brad Morrice, was reached by e-mail. He was asked to comment on New Century’s ranking as well as the contention that subprime loans originated by banks like New Century led to the collapse of the financial industry. Deixler described such conclusions as “ludicrous.” Several calls and e-mails asking him to elaborate were not returned.

Ameriquest, according to research of prospectuses, had relationships with virtually every major Wall Street investment bank. The lender sold billions of dollars in loans to Lehman Brothers, Bear Stearns, Goldman Sachs, Citigroup and Merrill Lynch. Some of its other financial supporters included Morgan Stanley, JPMorgan Chase, Deutsche Bank, UBS Securities, RBS Greenwich Capital, Credit Suisse First Boston, and Bank of America.

Countrywide, in addition to capital from shareholders, also had credit agreements with Bank of America, JP Morgan Chase, Citicorp USA (part of Citigroup), Royal Bank of Canada, Barclays, and Deutsche Bank.

Banks That Owned Subprime Lenders

Some investment banks owned subprime lenders. Merrill Lynch bought First Franklin Corp. (No. 4 on the list) in late December 2006 for $1.3 billion—just before the bottom fell out of the market. Bear Stearns bought Encore Credit Corp. in February 2007.

British banking giant HSBC got into the U.S. mortgage business in a big way when it bought Household International in 2003. It also purchased Arizona-based DecisionOne Mortgage, and operated under the Beneficial and HLC brands. An HSBC spokeswoman said HSBC Finance was primarily a portfolio lender, meaning it did not sell mortgages to third parties. HSBC, however, did package loans from its subprime subsidiaries into securities, according to SEC filings.

Lehman Brothers, now bankrupt, ranked No. 11 on the subprime list. The bank was a pioneer of sorts in investing in subprime lending. It owned several subprime lenders, including BNC Mortgage, Finance America, and Aurora Loan Services LLC.

Even banks that managed to dodge much of the carnage created by the subprime meltdown—like Goldman Sachs—were invested in the subprime mortgage business. Goldman in May 2005 submitted a prospectus so that it could sell more than $425 million in securities known as “mortgage pass-through certificates.”

Those securities were sold from an underlying pool of 9,388 second-lien loans that Goldman Sachs bought from Long Beach Mortgage Co., a company that ranks No. 5 on the list of the top 25 subprime lenders. Long Beach was a subsidiary of Washington Mutual, which collapsed in 2008 thanks largely to losses in the subprime mortgage market. It was the biggest bank failure in U.S. history.

Included in the prospectus for those Goldman Sachs securities was a boilerplate warning to investors considering buying subprime mortgages. It says the borrowers, “for one reason or another, are not able, or do not wish, to obtain financing from traditional sources” and that the loans “may be considered to be of a riskier nature than mortgage loans made by traditional sources of financing.” Goldman eventually received $10 billion from the government TARP program, a sum the bank says it would like to pay back as soon as possible.

Goldman has been more conciliatory than some banks as far as accepting responsibility for the economic collapse. “Much of the past year has been deeply humbling for our industry,” bank spokesman Michael DuVally wrote in reply. “As an industry, we collectively neglected to raise enough questions about whether some of the trends and practices that became commonplace really served the public’s long-term interest.”

Morgan Stanley owned a subprime mortgage company, but its volume wasn’t high enough to make the Top 25. The investment bank, which has also received a $10 billion TARP investment, was far more active as an underwriter. It backed $74.3 billion of subprime loans during the peak years of 2005 and 2006, according to Inside Mortgage Finance, ranking it fourth for that period.

In 2006, Morgan and French banking firm IXIS Real Estate Capital Inc. (now part of Natixis) hoped to sell $1.3 billion in subprime mortgage-backed securities to investors, according to a prospectus. It included 6,755 loans originated by 20 different lenders, including First NLC Financial Services LLC, Accredited Home Lenders and Countrywide.

In addition to Wall Street, the Federal National Mortgage Corporation (Fannie Mae) and the Federal Home Mortgage Corporation (Freddie Mac) also fed the subprime monster. Fannie and Freddie were created by the government to promote home ownership by buying mortgages from lenders and selling them to investors, thus freeing up cash for banks to make more loans.

With investment banks buying more and more loans themselves each year, Freddie and Fannie began buying a huge volume of mortgage-backed securities from Wall Street as a means to foster affordable housing goals.

As of the end of February 2009, Fannie and Freddie held a combined $292.1 billion in private mortgage-backed securities in their portfolios, according to monthly statements from both companies. On September 7, 2008, the government took control of the two entities.

Abusive Lending

The subprime lending business has had its share of public relations problems. Subprime lenders say they serve an important function—offering credit to people who have been snubbed by traditional mortgage lenders. But regulators and consumer advocates say some are “predatory” lenders who take advantage of people with little knowledge of how the financial system works and few options when it comes to borrowing.

Indeed, subprime lenders have paid billions to settle charges of abusive lending practices. At least 11 of the lenders on the Top 25 List have paid significant sums to settle allegations of abusive or predatory lending practices.

Two of the largest settlements ever reached for lending problems were with AIG and Citigroup, two financial institutions that have received billions in federal aid. Citigroup has a history of subprime lending, dating back to its purchase of Associates First Capital Corp. in 2000. Citigroup at the time was building a global banking empire thanks to its success in convincing the government to deregulate the financial services industry the year before.

Associates First Capital had been criticized by some as a predatory lender, and in 2002, Citigroup paid a price for it. The bank agreed to pay $215 million to resolve Federal Trade Commission charges that Associates had engaged in “systematic and widespread deceptive and abusive lending practices.”

In 2004, the bank was hit again, this time by the Federal Reserve. The Fed levied a $70 million civil penalty against CitiFinancial, Citigroup’s subprime lending unit, for abuses during 2000 through 2002.

A Citigroup spokesman said the bank does not sell or securitize its loans. It writes a small portion of adjustable rate mortgages, but does not offer “teaser rates” that so often get borrowers in trouble. Citigroup has caught heat from other big banks for supporting a bill, backed by consumer advocates, that would give judges more leeway in reworking mortgage loans of people in bankruptcy. The bill died in the Senate on April 30.

AIG settled claims of abusive lending practices in 2007. AIG subsidiary Wilmington Finance Inc. agreed to pay approximately $128 million in restitution after the Office of Thrift Supervision found the lender had failed to consider the creditworthiness of borrowers and charged large broker and lender fees. AIG also agreed to donate $15 million to “financial literacy and credit counseling.” The company did not respond to a request for comment.

HSBC got into the subprime business in the United States with the purchase of Household Finance in 2003. Prior to the purchase, Household paid a $484 million settlement encompassing customers in all 50 states for unfair and deceptive lending practices. Ameriquest was the subject of at least four settlements involving predatory lending since 1996, including charges of excessive fees and misleading poor and minority borrowers. In 2006, Ameriquest and its holding company, ACC Capital Holdings Corp., agreed to a $325 million settlement with the District of Columbia and 49 states over allegations that the company misled borrowers, falsified documents, and pressured appraisers to inflate home values.

Countrywide, No. 1 on the Top 25 list, signed off in 2008 on the mother of all predatory lending settlements. After being sued by 11 states, the company agreed to provide more than $8.6 billion of home loan and foreclosure relief. An attorney for former Countrywide CEO Angelo Mozilo was contacted, but no response was received.

Deeper and Deeper in Debt

There’s no question it has become easier over the last few decades to buy a home. Keeping it, however, is a different matter. One of the key measures of whether borrowers can afford a home or not is to compare their income to their loan amount. In an analysis of the lending industry, the loan-to-income ratio of borrowers was tracked between 1994 and 2007. More than 350 million mortgage applications reported to the federal government during this time were computer analyzed.

In 1994, the median loan after adjusting for inflation was $120,000—meaning half of loans approved were greater than that amount and half were less. The median income of borrowers was $73,000. That’s a loan-to-income ratio of 1.65. So borrowers were taking out loans that amounted to 165 percent of their salary.

The ratio remained relatively steady through the rest of the 1990s, but by 2000, it began to shoot upward. By 2005, the peak of the subprime lending boom, the median loan grew to $183,000 while borrowers’ median income remained roughly the same. That amounts to a loan-to-income ratio of 2.46. That meant the typical loan amounted to 246 percent of annual income.

Borrowers, in other words, were spending a much higher percentage of their income on housing during the subprime lending boom. Many of the lenders coaxed them along by lowering lending standards, failing to require documentation of income on loans, and providing adjustable rate loans with low two-year teaser rates that reset to much higher levels. Ultimately, that fed a wave of foreclosures, leading to trouble for borrowers, lenders, and eventually taxpayers—lots of it. And digging out will be no easy task.

John Dunbar and David Donald are investigators with the Center for Public Integrity, from where this article was adapted. Find more investigations at http://www.publicintegrity.org.

The Top 25 in Subprime

1. Countrywide Financial Corp.
Amount of Subprime Loans: At least $97.2 billion

2. Ameriquest Mortgage Co./ACC Capital Holdings Corp.
Amount of Subprime Loans: At least $80.6 billion

3. New Century Financial Corp.
Amount of Subprime Loans: At least $75.9 billion

4. First Franklin Corp./National City Corp./Merrill Lynch & Co.
Amount of Subprime Loans: At least $68 billion

5. Long Beach Mortgage Co./Washington Mutual
Amount of Subprime Loans: At least $65.2 billion

6. Option One Mortgage Corp./H&R Block Inc.
Amount of Subprime Loans: At least $64.7 billion

7. Fremont Investment & Loan/Fremont General Corp.
Amount of Subprime Loans: At least $61.7 billion

8. Wells Fargo Financial/Wells Fargo & Co.
Amount of Subprime Loans: At least $51.8 billion

9. HSBC Finance Corp./HSBC Holdings plc
Amount of Subprime Loans: At least $50.3 billion

10. WMC Mortgage Corp./General Electric Co.
Amount of Subprime Loans: At least $49.6 billion

11. BNC Mortgage Inc./Lehman Brothers
Amount of Subprime Loans: At least $47.6 billion

12. Chase Home Finance/JPMorgan Chase & Co.
Amount of Subprime Loans: At least $30 billion

13. Accredited Home Lenders Inc./Lone Star Funds V
Amount of Subprime Loans: At least $29.0 billion

14. IndyMac Bancorp, Inc.
Amount of Subprime Loans: At least $26.4 billion

15. CitiFinancial / Citigroup Inc.
Amount of Subprime Loans: At least $26.3 billion

16. EquiFirst Corp./Regions Financial Corp./Barclays Bank plc
Amount of Subprime Loans: At least $24.4 billion

17. Encore Credit Corp./ ECC Capital Corp./Bear Stearns Cos. Inc.
Amount of Subprime Loans: At least $22.3 billion

18. American General Finance Inc./American International Group Inc. (AIG)
Amount of Subprime Loans: At least $21.8 billion

19. Wachovia Corp.
Amount of Subprime Loans: At least $17.6 billion

20. GMAC LLC/Cerberus Capital Management
Amount of Subprime Loans: At least $17.2 billion

21. NovaStar Financial Inc.
Amount of Subprime Loans: At least $16 billion

22. American Home Mortgage Investment Corp.
Amount of Subprime Loans: At least $15.3 billion

23. GreenPoint Mortgage Funding Inc./Capital One Financial Corp.
Amount of Subprime Loans: At least $13.1 billion

24. ResMAE Mortgage Corp./Citadel Investment Group
Amount of Subprime Loans: At least $13 billion

25. Aegis Mortgage Corp./Cerberus Capital Management
Amount of Subprime Loans: At least $11.5 billion

Source: Center for Public Integrity and Home Mortgage Disclosure Act data