Caryn Freeman 3:45PM EST
Timothy Durham, an Indiana business man who donated more than $800,000 to Indiana state and federal officials and over $190,000 dollars to Indiana Governor Mitch Daniels campaign alone. Was indicted Wednesday with 12 counts, including conspiracy to commit wire and securities fraud. Durham, his business partner James F. Cochran and their accountant, Rick D. Snowand were in court Wednesday to face charges of defrauding about 5,000 investors in Akron, Ohio-based Fair Finance Co. of more than $200 million. In another "elaborate" Ponzi scheme unveiled by the Justice Department Durham used money from new investors to pay off earlier investors — then used investor capital to keep their own failing profitless ventures operating.
The investigation into Durham’s dealings has drawn attention to Indiana Republicans, including Gov. Mitch Daniels. The Justice department has asked several Indiana politicians to return a total of more than $800,000 Durham donated to the party and candidates. Daniels, who received about $195,000 in recent years has said the money was spent and that there was nothing to return. As the Justice department continues to look into small equity firms Republicans on the Financial Services Committee are quietly holding hearings that would essentially undo regulations on derivatives, credit rating agencies and private equity firms. One repeal House Republicans have proposed is to exempt private equity fund managers from having to register with the SEC. Republicans are also attempting to exempt credit-rating agencies like Standard & Poor's and Moody's from any liability of giving faulty credit ratings. These faulty credit ratings were at the heart of the 2008 financial meltdown where banks and brokerage firms endlessly loaned money to other banks and firms on Wall Street that were unable to repay loans. Hence the infamamous and controversial TARP legislation.
Repeal will be a challenge for House Republicans with a Democratic controlled Senate and White House to contend with. What republicans will gain from this move are large donations the GOP and its candidates. Much needed donations the GOP will need order to keep control if the House of Representatives and have a shot at the White House in 2012. Without the bank lobby and donations from Wall Street Republican candidates particularly those running for President and who may be facing Donald Trump and will definitely face President Barack Obama's OFA machine, would have little to no chance of raising the funds needed to make a realistic bid for the White House or Congress. Wall Street has become a kin the political process especially during campaign season and candidates on either side of the isle cannot ignore the lure of Wall Street money. Just as Gov. Mitch Daniels campaign committee had to face questions from the DOJ this week about major campaign donors. It is likely that stories like this will become common place in politics. If this continues candidates will have to face angry investors and constituents whose savings have crept into the hands of officials elected to protect them from this very type of consumer and investor abuse.