Lots of inexplicable buzz this morning about Politico’s story noting that Bevin, as CEO of an investment fund, signed an SEC document in 2008 that called TARP a “positive development.” Show of hands: How many people who are rooting for him to beat McConnell care? Even if the document reflected Bevin’s heartfelt opinion — which, he told Glenn Beck, it doesn’t — how many tea partiers would quit the Bevin bandwagon if he had turned around and said, “I did feel that way at the time but, unlike Mitch McConnell, I’ve come to regret supporting TARP”? Instant forgiveness, right? The last two men the party has nominated for president supported TARP; our last VP nominee, whose selection pleased most grassroots conservatives, actually voted for TARP in the House. This is always trotted out as a conservative litmus test but it never operates that way. Even if you were hoping that Bevin was the “true conservative” of your dreams, all it would mean if he’d supported TARP is that he’s guilty of the same sin as McConnell. Toss that out and you can still rationalize supporting him as the comparatively conservative choice on other grounds. In fact, Bevin himself is clear-eyed about why he’s become a cause celebre among some righty groups. The election’s a referendum on McConnell, not a choice between him and Bevin. All the challenger has to do is not disqualify himself and then hope that anti-establishment fever sends a huge crowd of tea partiers to the polls in May. And supporting TARP, as I just explained, is almost never disqualifying.
Anyway. He says he didn’t support it. It was the chief investment officer who wrote the SEC document. Bevin was required to sign and concluded it would be grossly inappropriate for him to mess with the CIO’s advice to investors.
“I was not the investment guy,” he said, “I never bought and sold the securities. So it would have been inappropriate and probably illegal, frankly, for me to have changed the investing commentary written by the sub-adviser the fund who was responsible for that.”
“I had a fiduciary responsibility as the chairman of this fund company to make sure that I was not perceived in any way, shape or form as having commentary on buy and sell decisions,” he said. “That was the responsibility of the adviser to the fund. And for me to have meddled in that would have been highly, highly inappropriate and all of these various Sarbanes–Oxley rules — among others — would have been very much in my grill had I attempted to rewrite or meddle or make the thinking of the actual fund manager that of my own.”
At the Corner, Patrick Brennan counters:
Bevin may or may not be right about the underlying legalities — it’s not clear how compliance would require him to lend his endorsement to investment advice he didn’t believe. He’s maintaining that he adamantly opposed measures that he was telling investors, to whom he has a fiduciary responsibility and to whom he was selling advice, were a great idea.
Of course, Bevin could have privately objected on principle but believed that they were the right measure — especially for equities investors — especially in the short term. But I suspect he won’t be saying that, and Mitch McConnell can rightly argue that even Matt Bevin knew financial markets had to be rescued and that passing TARP was the right move.
Question for securities experts: If the CEO thought TARP was a disaster in the making and told the CIO that, couldn’t the CIO have written instead, “Although opinion among management is divided, our consensus view is that TARP is a positive development”? Surely an expression of mild reservation based on the CEO’s considered judgment of a new federal policy wouldn’t get them sued. But then, again, it doesn’t matter. If you’re for Bevin, you deeply dislike McConnell and think it’s time for fresh blood. The challenger’s position on TARP doesn’t change that, even if it makes his blood slightly less fresh.
Speaking of McConnell and tea partiers, Rand Paul told Beck on Friday that the reason he endorsed McConnell was ” because he asked me. He asked me when there was nobody else in the race and I said yes.” Sounds … lukewarm, but I think people are making too much of it. Paul was always going to endorse McConnell; it’s his way of showing the establishment ahead of his presidential run that he can play nice with them if he ends up as the nominee. Look at it this way: Now that there is someone else in the race, why hasn’t he withdrawn his McConnell endorsement and switched to Bevin or at least chosen neutrality? QED.
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