In January 2010, Martha Coakley's gaffe-filled loss to Scott Brown in the Massachusetts special election to replace Ted Kennedy marked one of the most humiliating moments for Democrats in the Obama era. Her defeat presaged the GOP takeover of the House later that year and the stranglehold that tea party politics has had on national policymaking in the last two years.
But Coakley's looking pretty good since then, making me wonder: has she been more effective from Massachusetts than she would have been from Washington? Even as all the attention has been focused on Elizabeth Warren, the consumer-finance firebrand who is in a tight Senate race with Brown, Coakley has quietly built up an impressive record as attorney general in Massachusetts. Coakley has been one of the few holdouts to resist a deal desperately sought by the major banks over documentation fraud and other past abuses. More than 40 states have already agreed to a settlement said to be worth as much as $25 billion, but Coakley may be paying heed to advocates who say the deal is a cave-in and she should reserve her right to sue. Indeed, Coakley has launched what is considered the most comprehensive lawsuit in the nation over unfair and deceptive business practices. The Boston Globe recently called her "a national leader on behalf of homeowners caught up in the long-running housing crisis."
Under the legal theory being used by Coakley, the big Wall Street banks can and should be held accountable for the nonbanks that have been central figures in documentation fraud. According to Kathleen Engel of Suffolk University Law School, the documentation scandal that has cropped up in the last year or so--raising doubts about whether investment trusts ever obtained proper ownership of many of the loans and whether they can foreclose on mortgages--can be used to pin liability on these "vertically integrated" Wall Street giants and cost them some serious money in fines.
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