BUSTED: Shady Anti-CFPB Group Preparing Deceptive New Attack Ad Targeting Cordray

On Tuesday, the anti-Consumer Bureau astroturf organization Protect America’s Consumers posted a new 30-second video to its YouTube channel attacking CFPB Director Richard Cordray. The video appears to be a television ad that has not yet been announced or aired by the organization. Like ads released by the group in the past, the latest is riddled with misinformation. Hardly a surprise coming from an entity run by a man whose previous gig was working for a “clean coal” group that was caught sending forged letters to Congress in an effort to influence lawmakers.

Rhetoric v. Reality


RHETORIC: “Cordray used his power at the CFPB to issue a new regulation…”

REALITY: The CFPB was required by the Dodd-Frank Wall Street Reform Act to study arbitration, and only issued a rule on the issue after five years of input from the public including consumer groups, elected officials, banks, and other financial interests.

  • The Dodd-Frank Wall Street Reform Act, as passed by Congress, included a mandate that required the CFPB to study arbitration agreements, covering any future consumer financial dispute “in connection with the offering or providing of consumer financial products or services.” As part of the Dodd-Frank Wall Street Reform Act, the Consumer Financial Protection Bureau was required to “conduct a study of… the use of agreements providing for arbitration of any future dispute between covered persons and consumers in connection with the offering or providing of consumer financial products or services.” [“12 U.S. Code § 5518 – Authority to restrict mandatory pre-dispute arbitration,” Cornell Law School Legal Information Institute, accessed 08/01/17]
  • The CFPB studied arbitration clauses for more than five years, and only announced the rule after a lengthy public comment period, where the bureau received over 100,000 public comments. The Consumer Financial Protection Bureau first began working on the issue of arbitration clauses in April of 2012. They held multiple field hearings, conducted the Dodd-Frank mandated “arbitration study,” convened a small business review panel and held a tribal consultation in advance of the rule. The Rule was finally announced on July 10, 2017, after a lengthy public comment period, where the bureau received over 100,000 public comments. [“New protections against mandatory arbitration,” Consumer Financial Protection Bureau, accessed 08/01/17, “Arbitration Agreements,” Regulations.gov, accessed 08/01/17 and Courtney-Rose Dantus, “We’ve issued a new rule on arbitration to help groups of people take companies to court, Consumer Financial Protection Bureau, 07/10/17]

RHETORIC: “The CFPB doesn’t answer to anyone, not even Congress.”

REALITY: PolitiFact and others have noted there are a number of ways in which Congress oversees the CFPB.

  • PolitiFact notes that Congress oversees the CFPB in a variety of ways. “Congress can use legislation to change (or even abolish) the bureau. Indeed, there’s currently legislation in both chambers to enshrine a variety of transparency standards, some of which passed the House Financial Services Committee with bipartisan backing.” […] “The Senate must confirm the head of the bureau.” […] “The board’s director must testify at least twice a year before the Senate Banking, Housing, and Urban Affairs Committee; the House Financial Services Committee; and the House Energy and Commerce Committee. The bureau must also submit semi-annual budget justifications.” […] “The bureau is subject to an annual financial audit by the Government Accountability Office, a congressional agency.” [Louis Jacobson, “Carly Fiorina says Consumer Financial Protection Bureau has ‘no congressional oversight,'” Politifact, 11/14/15]
  • Congress has held “more than sixty hearings about the [CFPB] on a wide range of its activities.” “The [House Financial Services Committee] has held more than sixty hearings about the [CFPB] on a wide range of its activities, including its rule-making authority, data-collection practices, and spending.” [Ese Olumhense, “President Trump May Get Ability to Fire Consumer Financial Protection Bureau Chief,” Fox6Now (Milwaukee, WI), March 21, 2017.]
  • Congress has meaningful oversight of the CFPB budget. Cordray pointed out that the fact that Congress can hold hearings to examine the CFPB budget is meaningful oversight. “. . . Cordray pointed out that Congress is permitted to hold hearings to examine the budget of the bureau, and said that oversight would make it impossible to spend frivolously. ‘The notion that we would spend $100 million on paper clips and it wouldn’t matter, that we can be brought up here in front of you and have to answer for that publicly and embarrass ourselves if it turns out we were engaged in frivolous expenditures, that is very meaningful oversight,’” according to Cordray. [Ronald D. Orol, “Republicans: CFPB’s Funding ‘Recipe for Disaster,” Market Watch, February 15, 2012.]

RHETORIC: In their ad, Protect America’s Consumers claimed the New York Times wrote that the arbitration rule was “a gift to class-action lawyers.” [Protect America’s Consumers ad: “Power Hungry,” 08/01/17]

REALITY: Like their other misleading statements, Protect America’s Consumers neglects to mention this view attributed to the New York Times actually comes from anti-arbitration industry groups, including the Chamber of Commerce.

  • Protect America’s Consumers uses a quote from New York Times calling the arbitration rule “a gift to class-action lawyers,” neglecting to mention this is the viewpoint from pro-business groups, who have “belittled the rule.” Protect America’s Consumers ad uses a New York Times quote calling the arbitration rule “a gift to class-action lawyers.” The ad neglects to mention this is the viewpoint of the anti-arbitration rule Chamber of Commerce/ business groups, who have ” belittled the rule.” Full quote from the New York Times: “The chamber and other pro-business groups have belittled the rule as nothing more than a gift to class-action lawyers, who tend to be Democratic donors.” [Protect America’s Consumers ad: “Power Hungry,” 08/01/1 and Jessica Silver-Greenberg & Michael Corkery, “S. Agency Moves to Allow Class-Action Lawsuits Against Financial Firms,” New York Times, 07/10/17]

So, Who Is Behind This Misleading Ad?

Group sponsoring ad is run by a man who previously worked at an organization that was caught sending forged grassroots letters to Congress in an effort to influence lawmakers. The group has also been tied to a consulting firm accused of voter fraud in multiple jurisdictions.

Protect America’s Consumers’ CEO Is Steve Gates, Who Worked with The American Coalition for Clean Coal Electricity When “It Was Caught Feigning a Grass-Roots Campaign, Including Sending Forged Letters to Congressional Offices.” “The only person who has been identified with the group, spokesman Steve Gates, worked for the American Coalition for Clean Coal Electricity while it was caught feigning a grass-roots campaign, including sending forged letters to congressional offices. Gates didn’t respond to requests for comment.” [Politico, 1/7/16]

The ACCCE “Subcontracted Its Astroturf Operations to Lincoln Strategy Group, A GOP-Tied Firm Notorious for Voter Fraud.” “The new project will use 225,000 volunteers dubbed “America’s Power Army.” They will visit town hall meetings, fairs and other functions attended by members of Congress and ask misleading questions about energy policy. Think Progress has discovered that ACCCE has subcontracted its astroturf operations to the Lincoln Strategy Group, a GOP-tied firm notorious for voter fraud. The LinkedIn profile for Lincoln Strategies staffer Courtney Forrester reveals that her employer is engaged in a massive effort to recruit supporters on behalf of the coal industry. Steve Gates, communications director for ACCCE, told Think Progress that Lincoln Strategy Group ran their grassroots campaign last year as well.” [Think Progress, 8/7/09]

Last year it was reported that Lincoln Strategies was helping Protect Americas Consumers on its effort to ascribe electoral motivations to Cordray’s work to address forced arbitration. “At a field hearing on the CFPB’s arbitration rule earlier this month in Albuquerque, N.M., a man who identified himself as Chuck Bowman rose to challenge the agency’s director, Richard Cordray, on whether the policy would enrich trial lawyers and if he’ll renounce support from trial lawyers in a future run for governor or attorney general” […] “The outburst echoed Protect America’s Consumers’ talking points, replete with a website posing as Cordray running for office in Ohio.” […]  A “consumer advocate in attendance saw Bowman texting with Dan Centinello, an executive vice president at Lincoln Strategy Group.” […] “Sure enough, a report to be released today by left-wing research group Allied Progress will show that Centinello owns a web address redirecting to Protect America’s Consumers. ‘Chuck Bowman’ is most likely Chuck Coolidge, a partner at Lincoln Strategy Group, based on their likenesses.” [Politico, 5/19/16]

Lincoln Strategies Is “One of Most Notorious Voter Fraud Organizations in The Country.” “The new firm managing the “grassroots” campaign for the coal industry has a history that distinguishes it as being one of the most notorious voter fraud organizations in the country:” [Think Progress, 8/7/09]

In 2012, Lincoln Strategy Group Was Accused of Submitting Fraudulent Voter-Registration Forms to Florida Counties On Behalf of The RNC.  “Nathan Sproul and his Tempe-based voter-registration company, Lincoln Strategy Group, formerly known as Strategic Allied Consulting, is accused of submitting possible fraudulent voter-registration forms to Florida counties. Keith Kameg, spokesman for Florida’s Department of Law Enforcement, declines to specify how many counties, saying the case is an active criminal investigation that “precludes us from providing further information.” Sproul was working on behalf of the Republican National Committee to register voters to help presidential candidate Mitt Romney in a key battleground state before the committee fired Sproul. The Republican Party of Florida paid Sproul’s firm more than $1.3million. Sproul says his employees are trained on campaign-finance laws, and he says his company has turned in employees who break the law.” [Arizona Republic, 12/28/12]

  • Complaints Surfaced in 10 Florida Counties of Voter Registration Fraud by Lincoln Strategy Group Including Similar Signatures, False Addresses, And Names of Dead People; Similar Claims Also Arose Against Lincoln Strategy Group in Nevada and Colorado. “The tables have turned, however, and Republicans are now playing defense over the role of a well-paid operative, Nathan Sproul, in a voter registration scandal that emerged in Florida and has spread to other states. The Florida Department of Law Enforcement said it was reviewing ”numerous” claims involving a company that Mr. Sproul runs to determine if a criminal investigation is warranted. Complaints have surfaced in 10 Florida counties, among them allegations that registrations had similar signatures or false addresses, or were filed under the names of dead people. In other cases, party affiliations appeared to have been changed. In recent days, similar claims against Mr. Sproul have arisen in Nevada and Colorado.” [New York Times, 10/5/12]
  • Voter Registration Fraud Accusations Against Sproul and Lincoln Strategy Group “Seem to Fit a Pattern” And in Nevada a Woman Was Told by an Employee of Lincoln Strategy Group to Rip Up a Registration Where She Registered Democrat and Fill Out Another Where She Registered Independent. “Susan Bucher, the superintendent of elections in Palm Beach County, Fla., said that about 100 questionable voter registrations had been flagged there. Of those, more than half involved changing a voter’s party affiliation to Republican or independent. Ms. Bucher said that the revised registrations gave her ”the feeling that the person completing the application had not come in contact with the voter,” because they failed to include proper identifying information, like the last four digits of the voter’s Social Security number. The voter registration fraud allegations against Mr. Sproul’s companies seem to fit a pattern. In Nevada, a complaint filed last month with the secretary of state’s office alleged that a woman, Cathy Sue Yancey, was told to tear up a form in which she registered as a Democrat and fill out another one without marking her party affiliation. The complaint was filed by another woman who said she witnessed the event outside an unemployment office in Henderson, Nev., on Sept. 13. That woman, Gina Greisen, said she and a group of friends had been approached by a man who told them that they needed to update their voter registration. ”He talked about voter fraud and mentioned Acorn and illegals voting,” Ms. Greisen said. The worker then approached Ms. Yancey. ”He was sure a Republican, because he was totally against Obama,” said Ms. Yancey, who was reached by phone and verified Ms. Greisen’s account. ”I’m a Democrat. I’m certainly voting for Obama.” The election forms were traced to a Sproul operation.” [New York Times, 10/5/12]
  • In 2012, The RNC and All State Republican Parties Terminated Their Contract with Lincoln Strategy Group (DBA Strategic Allied Consulting) After The Voter Fraud Allegations and Reince Preibus Stated “There Is No Tolerance for Them at All.” “The Republican Party of Wisconsin contracted with Sproul’s Strategic Allied Consulting and had its workers in the state for about a week, according to Nathan Conrad, a spokesman for the Wisconsin party. Conrad said the contract was terminated last month when the problems in Florida emerged. The Republican National Committee and other state parties also terminated their contracts at the time. “There is no tolerance for them at all,” said Reince Priebus, the RNC’s chairman. Sproul has operated companies under a number of names, including Sproul & Associates, Lincoln Strategy Group and Strategic Allied Consulting, according to The New York Times. [Milwaukee Journal Sentinel, 10/14/12]

Spoul’s Firm Was Accused of Throwing Out Democratic Registrations in Nevada and Oregon in 2004. “Sproul told the Times he formed Strategic Allied Consulting at the request of the RNC for publicity’s sake, given past negative media coverage of Lincoln stemming from past allegations going back to 2004, when employees in Nevada and Oregon signed up Democrats but threw out their forms instead of turning them in.” [Fox 31 (Denver), 9/28/12]

  • In 2004, Sproul’s Company Was Accused of Only Registering Republicans in Multiple States and A Worker In Las Vegas Said He Watched a Supervisor Tear Up Democratic Registrations. “In 2004, a company he started was paid millions by Republicans to register voters. Employees in several states alleged they were told to register only Republicans. A worker in Las Vegas said he watched a supervisor tear up Democratic registrations. A Justice Department investigation did not lead to any charges, Sproul said.” [LA Times, 9/28/12]
  • The Oregon Department of Justice Investigated Spoul Companies for Voter Fraud in 2004. “Similar allegations prompted an investigation by the Oregon Department of Justice in 2004.” [New York Times, 10/5/12]
  • A Woman Told Investigators That She Was Paid by Sproul’s Consulting Firm Only When She Registered Republicans; The Claims Were Also Investigated by The Portland Office of The FBI. “The woman told investigators that she was paid only when she registered Republicans or those who said they would vote for President George W. Bush. The Oregon inquiry focused on more than 100 fraud complaints, many pointing to operations run by Mr. Sproul, but did not result in any charges. A lawyer for Mr. Sproul said at the time that the company had a system in place to prevent and detect fraud and forgery. Additional investigations of Mr. Sproul’s organization, including one by the Portland office of the Federal Bureau of Investigation, also failed to produce any charges.” [New York Times, 10/5/12]

Officials at A Library in Pittsburgh Complained That Sproul’s Organization Got Permission After Using False Pretenses to Set Up a Voter Registration Desk Outside Their Building—Only After Visitors Complained Did They Learn That the Canvassers Represented the Republican Party. “Around the same time, officials at a library in Pittsburgh complained that Mr. Sproul’s company had used false pretenses — claiming to represent the nonpartisan America Votes — to get permission to set up a voter registration desk outside their building. It was only after visitors began to complain that the library learned that the canvassers represented the Republican Party.” [New York Times, 10/5/12]

Former Chairman of the Arizona Republican Party Said Nathan Sproul, Head of Lincoln Strategy Group, Was “Very Controversial” In Arizona Republican Circles. “Mike Hellon, a former chairman of the Arizona Republican Party, said that Mr. Sproul had been considered “very controversial” in Arizona Republican circles before the recent allegations, partly because of past voter registration investigations. ”There are questions among a lot of people in the party about how he gets these contracts and why he gets contracts,” Mr. Hellon said.” [New York Times, 10/5/12]

Election Law Expert: If Sproul’s Firm Appears On Filings It “Would Immediately Raise Red Flags Among Democrats.” “But the record of allegations makes Sproul a lightning rod in political circles. “There’s no question if the name Sproul & Associates appeared on any filings, that would immediately raise red flags among Democrats,” said Rick Hasen, an election law expert who teaches at UC Irvine.”  [LA Times, 9/28/12]

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