OBAMA'S ROLE IN SUBPRIME MORTGAGE SCANDAL

While Democrats in Congress were pressuring Fannie Mae and Freddie Mac to plunge deeper and deeper into the subprime swamp, there were activists on the frontlines doing all they could to force banks to make loans that in the ordinary course they wouldn't make. Why not? Because those not getting mortgages had bad credit histories, not enough money for reasonable downpayments or lived in areas where housing values were deteriorating.

One of the hotbeds where forcing banks to make loans sane bankers wouldn't make was Chicago, about the time Barack Obama came back from law school to take his community organizing to a higher level.

Since Obama has said he learned more as a community organizer than he did in college and law school many have wondered just what a community organizer does.

Stanley Kurtz has done an astonishingly thorough job of recreating how one community organization ACORN, playing the race card charging discrimination, using intimidation and confrontation and pressure on regulatory officials, forced banks to make mortgage loans they otherwise would not make. His report is also a devastating exposé of Obama's Marxist socialism in action. Wealth redistribution is his goal: Take from the haves and give it to the have-nots.

Read it all and you will see how ACORN and Obama worked the levers of black power to undermine sound financial policies. The result of their efforts, along with similar ones throughout the nation, has been a financial disaster of historic proportions.

Key Kurtz excerpts:

Community organizers intimidate banks into making high-risk loans to customers with poor credit. In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers. In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.

ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies.

By September 1992, The Chicago Tribune was describing Talbott's program as "affirmative-action lending" and ACORN was issuing fact sheets bragging about relaxations of credit standards that it had won on behalf of minorities.

And Talbott continued her effort to, as she put it, drag banks "kicking and screaming" into high-risk loans.

What made this [pilot] program different from others, the [Chicago Sun-Times said], was the participation of Fannie Mae - which had agreed to buy up the loans. "If this pilot program works," crowed Talbott, "it will send a message to the lending community that it's OK to make these kind of loans."

Well, the pilot program "worked," and Fannie Mae's message that risky loans to minorities were "OK" was sent. The rest is financial-meltdown history.

IT would be tough to find an "on the ground" community organizer more closely tied to the subprime-mortgage fiasco than Madeline Talbott. And no one has been more supportive of Madeline Talbott than Barack Obama.

[Obama] returned to Chicago in the early '90s, just as Talbott was starting her pressure campaign on local banks. Chicago ACORN sought out Obama's legal services for a "motor voter" case and partnered with him on his 1992 "Project VOTE" registration drive.

In those years, he also conducted leadership-training seminars for ACORN's up-and-coming organizers. That is, Obama was training the army of ACORN organizers who participated in Madeline Talbott's drive against Chicago's banks.

More than that, Obama was funding them. As he rose to a leadership role at Chicago's Woods Fund, he became the most powerful voice on the foundation's board for supporting ACORN and other community organizers. In 1995, the Woods Fund substantially expanded its funding of community organizers - and Obama chaired the committee that urged and managed the shift.

The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN's Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards. Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding for her efforts. And, as the leader of another charity, the Chicago Annenberg Challenge, Obama channeled more funding Talbott's way - ostensibly for education projects but surely supportive of ACORN's overall efforts.

IN short, to understand the roots of the subprime-mortgage crisis, look to ACORN's Madeline Talbott. And to see how Talbott was able to work her mischief, look to Barack Obama.

Then you'll truly know what community organizers do.

Stanley Kurtz is a senior fellow with the Ethics and Public Policy Center in Washington, DC.