Daily Brief: Maine to benefit from $1.4 billion housing crisis settlement


Good morning from Augusta, where Attorney General Janet Mills is scheduled to release details about how Maine will benefit from a $1.4 billion settlement between the credit ratings agency Standard & Poor’s and the federal government and several states.

According to a news advisory, Mills will hold a press conference at the steps of the Kennebec County Court House in Augusta today as she files the state’s settlement agreement with S&P. It’s an uncharacteristically public spectacle, which could mean the state is in for big bucks.

“The consent order will address the state’s allegations that S&P contributed to the 2008 mortgage and subprime lending crisis which led many Mainers to lose their jobs and their homes,” the release states. 

Reuters reports that S&P will pay $687.5 million to the 19 states and District of Columbia who had filed lawsuits over the company’s role in the run-up to the 2008 financial crisis. S&P will also pay the federal government another $687.5 million to settle a similar lawsuit. 

The United States sued S&P in 2013 after initial settlement talks broke down, seeking $5 billion and accusing the ratings agency of defrauding investors. S&P argued that its ratings were protected under the First Amendment right to free speech, and described the lawsuit as retaliation for the firm downgrading the credit rating of the United States.

Maine filed a similar lawsuit the same day as the feds, alleging that S&P violated the Maine Unfair Trade Practices Act by engaging in unfair and deceptive business practices. The state said that S&P’s ratings of the complex finance securities central to the housing crisis were unrealistically rosy, and that the company “operated with an inherent conflict of interest, prioritizing profits over objective ratings.”

A 2011 Congressional report concluded that the firms then triggered the worst financial crisis in decades when they were forced to downgrade the inflated ratings.

Under the settlement, S&P acknowledged it has not uncovered evidence to support the allegations of retaliation. “This was important to me,” Attorney General Eric Holder said, referring to the allegation as “utter nonsense.”

Under the deal, S&P did not admit to any violations of law, but it did sign a statement of facts acknowledging that its executives in 2005 delayed implementing new models that produced more negative ratings. — Mario Moretto, with additional reporting by Reuters.

Photo: Maine Attorney General Janet Mills. BDN file photo by Troy R. Bennett.

Rosen confirmed as state finance chief

The governor’s nomination of Richard Rosen, a former state senator from Bucksport, to be the state’s commissioner of the Department of Administrative and Financial Services was unanimously confirmed Tuesday by the Maine Senate.

Rosen has been the state’s acting finance chief in the department since May 2014, when then-commissioner Sawin Millett retired. He served 14 years in the Maine Legislature, including two years as chairman of the budget-writing Appropriations Committee, from 2010 to 2012. After being termed out of office, he was hired last fall by Gov. Paul LePage to lead the new Office of Policy and Management.

Rosen briefly flirted with a run for Congress in 2014, but ultimately opted out of the race. His wife, Kimberly Rosen, currently represents their home district in the Maine Senate.

King votes with Dems to shut down bill to block Obama immigration action

Maine’s U.S. senators again found themselves on opposite sides of a politically contentious bill as independent Sen. Angus King sided with Democrats to oppose a bill that would have financed the Department of Homeland Security. Republican Sen. Susan Collins voted for the measure.

The bill had already passed in the House, but failed Tuesday to get the 60 votes needed to advance it in the Senate. A motion to reconsider is pending, meaning the bill could pass after renegotiation in the Senate.

King and the Democrats objected to the provision of the bill, attached by Republicans in the House, that would block President Barack Obama’s executive action to protect up to 5 million undocumented immigrants from deportation, including many children.

In a written statement, King said Congress must pass a “clean” version of the bill, funding DHS without needlessly dabbling in the political minefield of immigration, which he thinks should be considered separately.

“I simply cannot understand why we would jeopardize their ability to plan and operate missions that range from preventing terrorism and blocking cyber-attacks to managing our borders and ensuring national emergency preparedness,” King said. “The DHS budget — and all that it accomplishes — should not be a political football.”

The 51-48 vote in the Senate prevented the bill from proceeding to a final vote, which Republicans could easily have won.

In a separate statement, Collins said the Senate must put on the record its “strong opposition to the President’s extraordinarily broad immigration executive order issued last November as a huge abuse of his executive authority that undermines the separation of powers doctrine in our Constitution.”

However, she said that if the bill had advanced to a final vote, she would have proposed an amendment to protect the broad category of immigrants known as “DREAMers,” those brought illegally into the country by their parents when they were young children. A 2012 law protected those immigrants from deportation, but the house version of the DHS spending bill would repeal the law.

The Department of Homeland Security will run out of money on Feb. 27 if a new spending bill is not passed.

Reading list

Who inhaled? Jeb Bush, but not Chris Christie

A majority of Americans supports the legalization of recreational marijuana, according to a November 2014 Gallup pollThat’s well and good, but we want to know which of our politicians have ever actually smoked weed.The Hill has the answers, at least as far as Republican 2016 hopefuls are concerned. 

Mario Moretto

About Mario Moretto

Mario Moretto has been a Maine journalist, in print and online publications, since 2009. He joined the Bangor Daily News in 2012, first as a general assignment reporter in his native Hancock County and, now, in the State House. Mario left the BDN in 2015.