Cox ties to foreclosure industry come under scrutiny

LANSING — Attorney General Mike Cox’s ties to the foreclosure industry are once again coming under increasing scrutiny.

Campaign finance records show that Cox, and the various political action groups and 527 accounts he controls, has taken at least $125,000 from political action committees and individuals with ties to the mortgage and foreclosure industry since 2002.

Campaign finance disclosure reports for all of 2009 shows that Cox’s gubernatorial campaign, Mike Cox 2010 Committee, received at least $18,000 from people and political action committees tied to the foreclosure industry.

Key among them is David Trott, who owns and runs Trott and Trott, the state’s largest foreclosure company. Trott has given Cox and his political entities $26,200 and serves on the finance committee for the Cox gubernatorial campaign. Trott donated $3,400 — the statutory maximum — to Cox’s bid for governor in July of 2009.

In addition, Cox’s defunct AG campaign committee transferred $410,872.52 to the Cox gubernatorial bid between April and December 2009, according to campaign finance records at the Michigan Secretary of State office. Records from that committee show tens of thousands of dollars in campaign contributions from the banking and foreclosure industry interests.

This raises questions in the minds of critics, particularly in light of past accusations that Cox had neglected to prosecute mortgage fraud cases referred to him for prosecution by state regulators.

In 2007, investigators for the Office of Financial and Insurance Services complained to the Detroit News they were handing mortgage fraud cases “on a silver platter” to the Attorney General, but there had been no prosecutions. After that controversy broke, Cox’s office did file charges in several such cases.

Does mortgage industry money influence Cox’s decision making? Rich Robinson of the Michigan Campaign Finance Network says it would be difficult to prove such an accusation. “Can you prove a quid pro quo?” he asks. “That would be difficult.”

However, Robinson said, “The system creates a predispostion for the candidates and politicians to be responsive to their financial backers on policy concerns, regardless of how much it’s not in the public interest. This raises all kinds of ethical concerns.”

And interestingly, Cox himself has accused PACs and corporate interests of influencing the government’s actions by donating money to the political campaigns of other public officials.

In November, 2008, Cox called donations by Blue Cross Blue Shield of Michigan PAC to state lawmakers “an attempt to buy a change in the legislation.”

Robinson called that accusation “the kettle calling the pot black.”

More recently, Cox dismissed a call by Rick Snyder, one of his opponents in the Republican primary race, to reject money from PACs and lobbyists. A Cox spokesman called that challenge a “publicity stunt” and claimed that Cox has “the strongest record of any of the candidates of standing up to special interests.”

Robinson did say that Trott’s service on Cox’s campaign finance committee was “transparency.”

“That might be the height of transparency. He (Trott) is in his kitchen cabinet,” says Robinson. “He’s certainly not denying the connection by holding him close.”

Others say that the close ties to the mortgage industry send the wrong message at a time when hundreds of thousands of Michigan citizens find themselves facing possible foreclosure.

“Michigan families need to know their attorney general is on their side and not putting the interests of mortgage lenders first–bankers who sold complicated subprime lending instruments that made millions for Wall Street CEOs and drove our economy into the ditch,” said David Holtz, executive director of Progress Michigan. “Michigan’s attorney general, who is supposed to be the state’s top cop on the fraud beat, is instead taking tens of thousands of dollars in campaign funds from the mortgage lending industry and putting their legal gunslinger in charge of your fundraising. That’s not just the fox watching the hen house. That’s the big bad wolf blowing your whole house away.”