Consumer groups are calling on President Obama to employ rarely used powers in the Constitution to make a recess appointment of Richard Cordray to what the government bills as a new consumer financial watchdog.
Senate Republicans last week already blocked Cordray from becoming the first permanent director of the Consumer Financial Protection Bureau.
Cordray was the subject of national news in 2008 when he used public funds for the legal defense of three former state employees accused of accessing personal information of Joe Wurzelbacher, better known as “Joe the Plumber.”
Wurzelbacher rose to fame during that year’s presidential campaign after he was videotaped questioning Obama about the candidate’s small-business tax policy during a campaign stop in Ohio.
Now, liberal and consumer groups, and unions such as the AFL-CIO, join several House Democrats calling for Obama to circumvent Congress with a recess appointment, The Hill reported earlier this week.
According to its website, the Consumer Financial Protection Bureau seeks to “make markets for consumer financial products and services work for Americans – whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”
Cordray has stated that the jurisdiction of the new bureau includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies. It’s most pressing concerns, he has said, are mortgages, credit cards and student loans.
In May, 44 Senate Republicans vowed to block confirmation of any candidate to head the new bureau unless the agency’s leadership was changed to a board instead of a single director, its budget was subject to congressional approval and other financial regulators had a greater say in its oversight of banks.
“Congress raised concerns about the lack of transparency and accountability, but the Obama administration still hasn’t addressed those concerns,” John Ashbrook, a spokesman for Senate Republican leader Mitch McConnell, said in a statement after the news broke that Cordray would get the nomination.
Cordray, meanwhile, was briefly in the media spotlight over the eavesdropping affair regarding Joe the Plumber.
The controversy occurred during the last few weeks of the 2008 presidential campaign when employees at Ohio’s Department of Job and Family Services, or ODJFS, were accused of searching government records for private information on Wurzelbacher. The employees were accused of acting at the behest of its director, Helen Jones-Kelley, although Jones-Kelley denied the charge.
The Columbus Dispatch reported Oct. 25, 2008, that “information on Wurzelbacher’s driver’s license or his sports utility vehicle was pulled [accessed] from the Ohio Bureau of Motor Vehicles database three times” and that other state databases were used to get information on Wurzelbacher.
Cordray’s office investigated, finding that while the misuse of government databases concerning Wurzelbacher breached protocol, there was no evidence to prove the abuses were part of a political agenda or linked with a political group or campaign.
In light of the affair, Jones-Kelley ended up resigning from her position as director of ODJFS, as did other Ohio officials.
In March 2009, the D.C. watchdog group Judicial Watch filed a lawsuit on behalf of Wurzelbacher charging that Jones-Kelley, along with employees Fred Williams and Doug Thompson, improperly searched “confidential state databases” in an attempt to retaliate against Wurzelbacher for his criticism of Obama.
The Associated Press reported Nov. 15, 2009, that Ohio taxpayers were paying the bill for the legal defense of the three former state employees in the case that eventually was dismissed by the U.S District Court in Columbus on the grounds that the privacy violation didn’t amount to a constitutional violation of the right to privacy
It was Cordray’s office that defended the three in the lawsuit. Cordray told reporters he is obligated to defend the employees because the lawsuit claims the illegal actions were done in the course of their work for the state.
Critics charged that according to state law, Cordray didn’t need to use government funds in the case or defend the three since the lawsuit involved activities that were outside the scope of official state employment.
Further, state funds were not meant to be used to defend public workers who acted with malicious purpose, in bad faith or in a wanton or reckless manner.
Former U.S. Sen. Mike DeWine of Cedarville, Ohio, also a former local prosecutor, told reports, “These people violated the privacy of an Ohio citizen, and they did it, it would appear, to advance a partisan political campaign, and I think taxpayers will be shocked to find that their tax dollars are going to defend them.”
Delaware County Prosecutor David Yost added, “It’s an outrageous use of taxpayer money to defend the invasion of a citizen’s privacy.”
The AFL-CIO, meanwhile, has strongly endorsed Cordray.
The union’s president, Richard Trumka, announced in a statement, “The AFL-CIO strongly supports the nomination of Richard Cordray to head the Consumer Financial Protection Bureau. Mr. Cordray has an outstanding record of protecting the public interest as the attorney general of Ohio and as director of enforcement for the bureau.”
With research by Brenda J. Elliott