Sunday, May 7, 2017

Trump Team Can't See Fraud

Donald Trump appointed former Morgan Stanley Managing Director Craig S. Phillips to reform Fannie Mae and Freddie Mac, government sponsored entities charged with advancing home ownership.  Phillips headed Morgan Stanley's mortgage backed securities division as Global Head of Securitized Products.

Morgan Stanley ended up having to pay $625 million apiece to Fannie and Freddie to settle securities fraud charges in that case. 
In March 2007 Phillips founded Ptarmigan Capital, an opportunistic real estate private equity underwriter focused on India and the U.S.   In May 2008 BlackRock hired Phillips to head its Financial Markets Advisory Group.

In the past year alone, we have advised on or managed distressed portfolios totaling more than $150 billion, some of which have been highly publicized mandates. 
Craig Phillips helped create distressed portfolios during his securitized products term at Morgan Stanley.  BlackRock referred to Phillips:

"as a leader in the development of the securitized debt markets."
Is another crisis in the making and Phillips needed to shovel public money to cover the errors of his fraudster friends?

President Obama ditched fraud as something for the Justice Department to pursue, which left Phillips free for public service. 

Getting away with fraud is the badge of dishonor and apparently a useful skill to President Trump, who has trillions in federal money to steer to his billionaire friends.  He needs people who can funnel the money by any means.  Phillips knows how to shovel money into his and his friends pockets.  This is but the latest Trump appointment deepening the swamp. 

Interesting Aside:  Phillips will work with former Morgan Stanley Global Treasurer Celeste Brown, who was hired as Fannie Mae's Deputy Chief Financial Officer.  This smells like another once in a lifetime opportunity for Fannie Mae management.  I wonder how Craig's reform work intersected with Celeste Brown's decision to join Fannie.