I wanted to provide a few "snippets" for those who don't want to read the entire piece. Magnetar is the hedge fund in question: "Our studies indicate that Magnetar alone accounted for between 35% and 60% of demand for subprime mortgages in the year 2006:"
[T]he sponsors of this toxic trade did bother to make sure they had a powerful friend. The head of the firm in question gave substantial amounts of money by political contribution standards to Rahm Emanuel’s PACs, and only his PACs, over the period when these transactions were in play...
And the hedge fund’s cagey bet on Rahm? Litowitz and his wife had never before made significant political donations. In 2005, they started giving to Rahm and his PACs, and only PACs connected to Rahm, just before the Magnetar CDO program began, and continued through the first quarter of 2008, when the trade would have started to pay out handsomely. The Litowitzs gave a total of $8,000 to Emanuel and $10,000 to his Our Common Values PAC in May 2005. In 2006 and 2007, they contributed $51,700 to the Democratic Congressional Campaign Committee, while Emanuel was chairman. We have been advised by individuals involved in political fundraising that the amounts given would be considered significant, and the way the payments were distributed across the PACs is sophisticated. Put it another way: this money was not given impersonally...So Rahm - and Obama - have been huge beneficiaries of the very firms who helped propagate the subprime/financial crisis: "As the Magnetar-Rahm connection highlights, Obama raised more money from financial services players than any previous presidential candidate, so it can hardly be a surprise that he and his minions are happy to give the industry a free pass."
But this troubling connection should be no surprise. Rahm has long been a favorite of the hedge funds, having raised more money from them than any Senator not running for President. Not surprisingly, he has been a staunch supporter of the financial services industry, and is widely credited with playing a key role in securing passage of the TARP after its initial defeat.
What this article points to is that Rahm Emanuel should immediately be under the investigation of a Special Prosecutor appointed by someone other than the Attorney General (that same person who drafted the Marc Rich pardon letter that Clinton signed on his way to catch his final helicopter ride from the White House lawn). And forget about using Patrick Fitzgerald (the person who investigated Scooter Libby) because he is a Chicago Democrat.
What does all of this say about Obama? I'll leave it for the reader to decide.