Hedge fund manager William Frey found it unfair that Congress sought to change the terms of mortgages held by his firm. Thus he spoke up, got quoted in the New York Times, and noted that he planned to challenge the relevant law. This is how things work in a democracy, as Radley Balko points out in the post that drew my attention to this somewhat dated matter.
What happened next ought to cost six House Democrats their jobs. Rep. Barney Frank, Rep. Paul Kanjorski, Rep. Maxine Waters, Rep. Luis Gutierrez, Rep. Carolyn Maloney, and Rep. Melvin Watt sent Mr. Frey a thuggish letter so transparent in its attempt to intimidate him that it serves as an object lesson in the perils of an economic system run according to Congressional conceptions of fairness. All this holds whatever you think of the specific legislation’s merit, on which I take no position here.
Dear Mr. Frey:
We were outraged to read in today’s New York Times that you are actively opposing our efforts to achieve a diminution in foreclosures by voluntary efforts. Your decision is a serious threat to our efforts to respond to the current economic crisis, and we strongly urge you to reverse it. Given the importance of this to the economy and to what it means for future regulatory efforts, we have set a hearing for November 12, and we invite you to now testify. We believe it is essential for our policymaking function for you to appear at such a hearing, and if this can not be arranged on a voluntary basis, then we will purse further steps.
For the hedge fund industry, which has flourished for much of the past decade, to take steps so actively in opposition to what is currently in the national economic interest is deeply troubling and will clearly have serious implications for the rules by which we operate in the future if this posture of obstruction of our efforts is maintained.
We very much hope you will be able to tell us very soon that you have reversed your position of trying to obstruct the operation of the bill that was overwhelmingly passed by Congress and signed by the President this summer, and we hope you will also affirm your presence at the hearing on November 12.
Among other reasons, this letter is outrageous insofar as it implies that when a bill is passed by Congress and signed by the president, a citizen is acting outrageously by challenging it in court, or expressing disagreement to a newspaper reporter. Imagine if after the passage of the Patriot Act, six Republican Congressmen would’ve written the head of a human rights NGO, threatening to drag them before Congress in a public hearing designed to embarrass or inconvenience them because they dared to oppose a bill “overwhelmingly passed by Congress and signed by the president.” What these Democrats are doing, utterly shamelessly, is every bit as bad.