Senators write DOJ over Cordray appointment; 35K sign petition

John O'Brien Jan. 10, 2012, 10:50am


WASHINGTON (Legal Newsline) - More than 35,000 Americans have signed a petition that opposes President Barack Obama's recent decision to appoint Richard Cordray as the head of a federal agency without approval from the U.S. Senate.

Obama announced the recess appointment of Cordray, the former Ohio Attorney General, last week, to run the Consumer Financial Protection Bureau, even as Senate Republicans claimed it was unconstitutional. The American Center for Law and Justice took its petition to the people.

Disputed is whether the Senate was in recess. Over the holiday break, Senate Republicans say they conducted pro forma sessions, though Obama claims no business was conducted during them.

The Republican senators of the Judiciary Committee have signed a letter to U.S. Attorney General Eric Holder to express concern about Obama's move. The letter seeks information about what role the Department of Justice or its Office of Legal Counsel played in the move.

It also asks Holder if the DOJ believes "the President's decision to make these recess appointments notwithstanding the absence of an adjournment resolution is constitutional."

ACLJ chief counsel Jay Sekulow says the issue struck a chord with the American people and members of Congress.

"The move by President Obama is unprecedented and unconstitutional," he said. "No one is questioning the President's authority to make recess appointments, but those must occur when the Senate is in recess, which is clearly not the case here.

"We are calling on President Obama to abide by the Constitution and respect the separation of powers."

Senate Republicans refused to end the debate over Cordray's nomination and bring it to a vote.

The CFPB was created by the Dodd-Frank regulatory overhaul and is tasked with regulating consumer financial products. Republicans want changes made to the bureau before a director is picked, while the American Tort Reform Association criticized the relationship Cordray built with private attorneys while Ohio AG.

Sen. Richard Shelby, R-Ala., said in October that Obama and Senate Democrats have not tried to work with Republicans on improving the accountability of the bureau.

"No nominee for the Director of the Bureau of Consumer Financial Protection should receive consideration until the Democrats are ready to stop playing politics and work with us to make the Bureau accountable," Shelby said after the Banking Committee approved Cordray. "It's their choice."

In November 2010, Cordray lost to former Lt. Gov. and U.S. Sen. Mike DeWine, a Republican, in the state attorney general race. He had been elected to the post in November 2008 to serve the remainder of the term held by the previous attorney general, Marc Dann. Dann had resigned in May 2008 amid a sex scandal.

Prior to being attorney general, Cordray served as the Ohio State Treasurer and as treasurer of Franklin County, Ohio. He also served as a member of the Ohio House of Representatives and as the state's first solicitor.

In addition to Republicans, the American Tort Reform Association also has said it is skeptical of Cordray's nomination to the post.

ATRA questions his relationships with private attorneys he hired to pursue state lawsuits while serving as attorney general.

"Mr. Cordray appears to share CFPB architect Elizabeth Warren's often voiced belief that litigation is a perfectly legitimate means by which to craft public policy, even though it sidesteps duly elected lawmakers and executives, and even though it lacks proper transparency," ATRA President Tiger Joyce said.

Private attorneys hired by Cordray to sue the three major credit rating agencies are currently appealing a ruling against them. The lawsuit, filed on behalf of five public pension funds, claim $457 million in losses and allege the agencies helped cause the collapse of the housing and credit markets.

The private firms hired by Cordray for the lawsuit were: Lieff, Cabraser, Heimann & Bernstein of New York; Entwistle & Capucci of New York; and Schottenstein Zox & Dunn of Columbus.

Employees of the Lieff firm gave $50,000 to the Ohio Democratic Party in 2008. The party gave Cordray more than $1.8 million for his campaign that year. The Schottenstein firm gave $23,500 to Cordray from 2008-10.

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