• Pragerisms

    For a more comprehensive list of Pragerisms visit
    Dennis Prager Wisdom.

    • "The left is far more interested in gaining power than in creating wealth."
    • "Without wisdom, goodness is worthless."
    • "I prefer clarity to agreement."
    • "First tell the truth, then state your opinion."
    • "Being on the Left means never having to say you're sorry."
    • "If you don't fight evil, you fight gobal warming."
    • "There are things that are so dumb, you have to learn them."
  • Liberalism’s Seven Deadly Sins

    • Sexism
    • Intolerance
    • Xenophobia
    • Racism
    • Islamophobia
    • Bigotry
    • Homophobia

    A liberal need only accuse you of one of the above in order to end all discussion and excuse himself from further elucidation of his position.

  • Glenn’s Reading List for Die-Hard Pragerites

    • Bolton, John - Surrender is not an Option
    • Bruce, Tammy - The Thought Police; The New American Revolution; The Death of Right and Wrong
    • Charen, Mona - DoGooders:How Liberals Hurt Those They Claim to Help
    • Coulter, Ann - If Democrats Had Any Brains, They'd Be Republicans; Slander
    • Dalrymple, Theodore - In Praise of Prejudice; Our Culture, What's Left of It
    • Doyle, William - Inside the Oval Office
    • Elder, Larry - Stupid Black Men: How to Play the Race Card--and Lose
    • Frankl, Victor - Man's Search for Meaning
    • Flynn, Daniel - Intellectual Morons
    • Fund, John - Stealing Elections
    • Friedman, George - America's Secret War
    • Goldberg, Bernard - Bias; Arrogance
    • Goldberg, Jonah - Liberal Fascism
    • Herson, James - Tales from the Left Coast
    • Horowitz, David - Left Illusions; The Professors
    • Klein, Edward - The Truth about Hillary
    • Mnookin, Seth - Hard News: Twenty-one Brutal Months at The New York Times and How They Changed the American Media
    • Morris, Dick - Because He Could; Rewriting History
    • O'Beirne, Kate - Women Who Make the World Worse
    • Olson, Barbara - The Final Days: The Last, Desperate Abuses of Power by the Clinton White House
    • O'Neill, John - Unfit For Command
    • Piereson, James - Camelot and the Cultural Revolution: How the Assassination of John F. Kennedy Shattered American Liberalism
    • Prager, Dennis - Think A Second Time
    • Sharansky, Natan - The Case for Democracy
    • Stein, Ben - Can America Survive? The Rage of the Left, the Truth, and What to Do About It
    • Steyn, Mark - America Alone
    • Stephanopolous, George - All Too Human
    • Thomas, Clarence - My Grandfather's Son
    • Timmerman, Kenneth - Shadow Warriors
    • Williams, Juan - Enough: The Phony Leaders, Dead-End Movements, and Culture of Failure That Are Undermining Black America--and What We Can Do About It
    • Wright, Lawrence - The Looming Tower

Financial Trouble at the Bank

The following article, “How the Fed let small banks take on too much, then fail”,  was found at McClatchy and RealClearPolitics:

WASHINGTON — The Federal Reserve Board, chastised for regulatory inaction that contributed to the subprime mortgage meltdown, also missed a chance to prevent much of the financial chaos ravaging hundreds of small- and mid-sized banks.

In early 2005, at a time when the housing market was overheated and economic danger signs were in the air, the Fed had an opportunity to put a damper on risk taking among banks, especially those that had long been bedrocks of smaller cities and towns across the nation.

But the Fed rejected calls from one of the nation’s top banking regulators, a professional accounting board and the Fed’s own staff for curbs on the banks’ use of special debt securities to raise capital that was allowing them to mushroom in size.

Then-Chairman Alan Greenspan and the other six Fed governors voted unanimously to reaffirm a nine-year-old rule allowing liberal use of what are called trust-preferred securities.

This was like a magic bullet for community banks that had few ways to raise capital without issuing more common stock and diluting their share price. The Fed allowed the banks to count the securities as debt, even while counting the proceeds as reserves. Banks were then free to borrow and lend in amounts 10 times or more than the value of the securities being issued.

The Fed supervised about 1,400 bank-holding companies, the bulk of them parent companies of community banks.

Data emerging from the carnage of collapsed and teetering banks leaves little doubt that the Fed rule, and regulators’ failure to adequately police the issuance of these securities, created big cracks to the already shaky foundations of the nation’s banking system.

A four-month McClatchy inquiry found that the Fed rule enabled Wall Street to encourage many community banks to take on huge debt and to plunge the borrowings into risky real estate loans.

In a Winter 2010 Supervisory Insights report published Wednesday, the Federal Deposit Insurance Corp. confirmed McClatchy’s findings. Sandra Thompson, the FDIC’s director of supervision, said that “institutions relying on these instruments took more risks and failed more often than those that did not include the use of” trust-preferred securities.

In its supervisory report, however, the FDIC didn’t criticize the Fed directly.

Adding to the problems, investment banks aggressively pooled these community-bank securities into complex bonds — much like the complex mortgage bonds that nearly brought down the financial system in 2008.

The consequences were devastating.

As of Sept. 30, the FDIC had 860 small banks on its “watch list” for possible failure. The issuance of the special securities to boost lending helps explain the staggering 324 bank failures between 2008 and mid-December.

Of those failed banks, the parent companies of at least 136 of them issued and later defaulted on more than $5 billion of the special securities.

The picture is sure to grow uglier in 2011.

That’s because Fitch Ratings, which rates the likelihood of bond defaults, said that another 380 bank holding companies that issued $7.1 billion of the securities have exercised their rights to defer paying interest to investors for up to five years. Deferrals historically have preceded defaults.

Defaults and deferrals even contributed to at least three dozen failures by banks that bought the complex bonds — as much as $312 million by the Riverside National Bank of Florida alone.

The failures collectively have already left more than $1 billion of the complex bonds on the books of the FDIC’s industry-funded bank rescue fund. McClatchy obtained this sum through the Freedom of Information Act.

The Securities and Exchange Commission is now investigating how securities firms hawked some of the complex bonds in a poorly understood, $55 billion offshore market for debt issued by banks, insurers and real estate trusts — a market that’s only now becoming clear.

The demise of two banks on Sept. 11, 2009, the eighth anniversary of the 9/11 terrorist attacks, illustrates how the community bank securities blindsided issuers and buyers alike.

From 2003 to 2007, Chicago-based Corus Bancshares generated more than $400 million in capital by making more than a dozen offerings of the 30-year bonds, partly to fuel its Corus Bank unit’s dive into the sizzling market for condominiums, especially in Florida. The bank’s officers felt the fever, as their total condo construction loans shot up from $447.6 million to $3.46 billion.

“Everyone was making money hand over fist,” said John Barkidjija, who was promoted to serve as Corus’ chief credit risk officer months before the bank failed. “We were in a risky business. We were doing bigger and bigger loans. We were concentrated geographically, and if there was a downturn, it could be bad.”

In September 2009, two years after U.S. credit markets began to freeze and home prices began to plummet, Barkidjija said, “We had our own 9/11.”

The parent of Venture Bank — a Dupont, Wash., lender that began as a credit union in 1932 — created a cash infusion for its bank by issuing $21 million of the special securities. Cranking out loans to real estate developers, the bank’s assets grew from $752 million to $1.1 billion between 2005 and 2008. Venture officers commissioned the construction of a multi-story, $8 million headquarters.

But Venture also invested more than $42 million in the bank bonds that bank examiners would require them to write off. An FDIC report shows that Venture also lost $42.5 million in investments when the government took over mortgage finance giants Fannie Mae and Freddie Mac in 2008.

Washington state bank examiners in 2008 concluded that Venture had concentrated more of its investments in real estate development loans than all but 1.5 percent of the nation’s banks and thrifts.

Venture’s former chief financial officer, Sandra Sager, declined to comment about the lender’s collapse, which left its shiny headquarters sitting empty.

Corus and Venture were emblematic of many banks that used their newfound capital to feed the real estate bubble, helping to propel U.S. home construction from $257 billion in 1996 to $620 billion a decade later.

Other banks that left the FDIC with hefty portfolios of defaulted bonds when they failed included the Independent Bankers Bank of Springfield, Ill., and the Rainier Pacific Bank of Tacoma, Wash., each with more than $113 million, and Vantus Bank of Sioux City, Iowa, with $65 million.

William Black, a former senior federal thrift regulator, blames the Fed for an overzealous free-market focus.

“The Fed desperately wanted to believe that it didn’t need to regulate and could rely instead on private market discipline,” meaning banks would avoid taking excessive risks, said Black, now a professor at the University of Missouri-Kansas City.

Instead, he said, the banks were “lending into the bubble” with money generated by the bonds, while other banks lacked the sophistication to assess the perils of buying the complex securities.

Fed officials declined to comment about this regulatory misfire. Greenspan didn’t respond to a request for comment.

The outlook for trust-preferred securities went dark in mid-2007, after ratings agencies put under review for a downgrade the slices of 72 offshore deals involving complex bonds that were backed by community-bank securities. This signaled downgrades that eventually reduced these bonds to junk status.

Growing nervous that summer, an officer of one community bank dialed his broker to unload millions of dollars of the complex bonds.

The reply, recalled the now-former bank officer, came as a shock: “There’s no market.”

“I didn’t know what to say,” he said, speaking on condition of anonymity because of litigation fears.

He likened it to trying to sell your house and being told: “‘There’s no buyer . . . even if you lowered it to a dollar.”

Regulators soon seized the bank.

After the Fed’s 1996 vote approving their use, the special securities were a hard sell since there wasn’t much of a track record. That changed in 2000 when the Wall Street firm Solomon Brothers came up with the idea of bundling securities from 30 or 40 banks and selling slices, or “tranches” of each bundle based on their investment grades.

By 2004, banks big and small had issued $77 billion of the securities, spurring lending that helped the economy rebound from the 9/11 terror attacks, but prompting a new regulatory challenge. The Fair Accounting Standards Board determined that banks should report the securities only as debt, not as capital. This meant that the banks couldn’t borrow heavily against the proceeds from the issuance of the securities, curtailing banks’ growth potential.

Lobbied by community bankers to reject that conclusion, the Fed proposed a formal rule that left things as they were for banks with assets under $15 billion — the community and regional banks.

FDIC officials blanched. In a nine-page letter to Greenspan, then-agency Chairman Donald Powell argued that the policy would encourage banks to take too many risks to cover the dividends they’d be expected to pay their parent companies in return for the cash.

He lamented “the unilateral decision of an important bank regulator such as the Federal Reserve to depart from established prudential standards.”

At least one Fed official urged that community banks be held to more stringent standards.

The Fed rejected those appeals, overrode the accountants and kept the rule essentially intact.

By 2009, the amount of the bank-issued securities had climbed to a whopping $149 billion.

Read more: http://www.mcclatchydc.com/2010/12/22/105708/fed-could-have-saved-many-smaller.html#ixzz18yj2yAsU

There’s No Obama Comeback……

…….claims Jennifer Rubin at the Washington Post:         

By Jennifer Rubin

I’m getting whiplash trying to follow the Democrats’ talking points. First, it was a disaster when Obama agreed to extend the Bush tax cuts. Obama was a wimp. Then it was a horrid error to allow the omnibus spending bill to die (and with it all that funding for ObamaCare). The White House, liberals complained, also blew it on the DREAM act. And now, presto: Obama has mounted a phenomenal comeback!

Not exactly. The sources of the left’s delight — repeal of “don’t ask, don’t tell” and ratification of the New START treaty — are irrelevant to the vast majority of Americans. Voters care, as the Democrats should have but refused to learn during the referendum of 2010 (the midterms results were, one wit cracked, “a restraining order” on liberal statism), about the economy, jobs and the growth of government. These are far and away the most important issues in every credible survey, and will be the focus of the Republicans’ 2011 agenda.

And if the highlight of Obama’s term, according to outgoing House Speaker Nancy Pelosi, was the “historic” ObamaCare legislation, then the highlight could soon be extinguished. Obama’s central domestic achievement is facing judicial scrutiny, a Republican onslaught to repeal, or at least defund, it, and a public that has never “learned” to love the bill.

Only inside the Beltway could the passage of an arms control treaty and repeal of DADT consume so many for so long and result in such exaggerated punditry. Would Republicans have traded wins on DADT and START for their wins on the DREAM act, the tax deal and the omnibus spending bill? Not in a million years.

But liberal media mavens have a narrative that resists “bad news” (i.e. scandals, polling, the Tea Party movement) that suggests trouble for the Obama administration. They also confuse legislative achievement with political success. If passing stuff was the secret to a political comeback, then the Democrats after ObamaCare and the stimulus plan would have had the greatest year ever.

Obama may yet stage a comeback. But to do that, he’ll have to do what the left loathes — cut domestic programs, rework entitlement programs, stand up to foreign adversaries (Obama’s legacy is irretrievably ruined if Iran gets the bomb on his watch), cut back on growth-restricting regulations and keep tax rates low. And so long as unemployment remains at historic highs, Obama’s chances of re-election remain poor.

But as long as the left wants to succumb to conservatives on the issues that voters care most about — taxes and spending — I suppose conservatives should keep mum. So let’s keep this just between us.

//

Dick Morris: Census Shows States Taxing Themselves to Death

Dick Morris wrote the following article in the New York Post:

High taxes kill states. There can be no better evidence than the 2010 Census. The states that lost House seats — because they’re shrinking, relative to the nation — had taxes 27 percent higher than the ones that gained seats.

Of the seven states that don’t have a personal income tax, four (Texas, Florida, Nevada and Washington) account for eight of the 12 seats apportioned to the fastest-growing states

New York and Ohio lost two more seats. Other losers — down one each — are Massachusetts, Missouri, Michigan, New Jersey, Pennsylvania, Illinois, Louisiana and Iowa. What do they all have in common? High taxes.Texas, with the second lowest taxes in the nation, gained four seats, Florida picked up two and Arizona, Georgia, Nevada, South Carolina, Utah, and Washington state each gained one. All have low taxes.

The states that lost seats ranked an average of 24th in taxes and had an average tax burden of $2,267 per capita (weighted more toward the states that lost more than one seat).

The states that gained seats ranked an average of 39th in taxes and had an average tax burden (weighted) of $1,788 — 27 percent lower than the losing states.

People vote with their feet and flee to low-tax states. It’s not the climate; it’s the taxes.
In New York, the city grew from 7.3 million in 1990 to 8 million in 2000 to 8.4 million in 2010 — but population upstate shrank dramatically. Some 1.7 million people left New York state in the last decade, the largest exodus any state experienced. Upstate New York is dying, killed by high taxes.

The New York City metro area can grow despite high taxes. It’s the historical center for immigration from overseas, a glittering attraction for migration from within the country and the foremost global city. But upstate has no such offsetting attractions.

Consider Buffalo. From half a million people in 1960, it has fallen to a quarter of a million. It’s lost half its population in 50 years.

The trend is unmistakable: The “losing” states drove out their high-income citizens (and middle-income jobs) with heavier tax burdens. As New York and other high-tax states confront their budget difficulties, they need to be mindful of this trend — lest they wind up taxing their states into oblivion.

Joe Louis Clark and Marxist Anarchy in the American Public School

Many bemoan the American public school classroom as a place where young people cannot learn, where drugs are more prevalent than textbooks, where violence and vandalism make corridors look like war zones. For a myriad of reasons, the sad fact that many American public schools are waging a losing battle to complete their mission of training future generations to lead America.

In September 1982, during the first day of class at Eastside High School in Paterson, New Jersey, a student was stabbed. In 1983, things would be different. The school’s new principal, Joe Clark, would be the reason why.

A former Army drill instructor, Joe Clark sees education as a mission. He worked while attending high school to support his mother and siblings. He then went on to get his B.A. from William Paterson College and a Master’s Degree from Seton Hall University. The feisty and polsyllabic-speaker Clark was made for the helm of Eastside High. After two years of his leadership, the formerly raucous institution was declared a model school by New Jersey’s governor. Clark himself was named one of the nation’s ten “Principals of Leadership” in 1986.

Clark thwarts those who believe that the learning process is disrupted by tough discipline. Instead of offering sympathy, Clark held high expectations for students, challenging them to develop habits for success and confronting them when they failed to perform. On a single day during his first week at Eastside, Clark expelled 300 students for fighting, vandalism, drug possession, profanity or abusing teachers. He explains, “If there is no discipline, there is anarchy. Good citizenship demands attention to responsibilities as well as rights.”

I googled for  the above biography information about Joe Louis Clark.   I remembered his name as a hero.   I remember him as a man  who understood democracy, anarchy, discipline, citizenship, responsibility, and learning.   Unlike the Marxist chic at the university colleges of education, (those who program as well as those programmed)  he understood easily that one out of these six nouns was a cancer to the American Dream of equal opportunity.

Leftist are void of such understanding when they are rising to power.  Once in power, Marxists by nature are dictators….for they know best how people should live.

Joe Louis Clark is an American Hero.   I hope he is alive and well.

Marxist “Games” at CBS……

A CBS spokesperson told Newsday that the false cover was aired by accident, and was the result of the network pulling a bad photo from the internet.

“Good catch: It’s a mistake no one could see because you’d have to freeze the frame to notice it. Another cautionary tale about the risks of the internet age – clearly, we have to be more careful when downloading material,” the CBS spokesperson said.

Remember when the mainstream media used to sniff at bloggers for publishing opinions without the Establishment’s layers of fact-checkers and editors?  I think most bloggers would have noticed the difference between the two covers.  Somehow, I doubt that the use of the gag cover was an inadvertent, benign act, and it appears that the layers of fact checkers and editors were out to lunch or in on the joke.

Check out the video found at HotAir about the CBS fun.   Make no error about these folks.  They belong to the Obama gang.   Those in play knew exactly what they were doing. 

These are the bands of professionals Ted Koppel would approve of as his type of  high quality reporting.

http://hotair.com/archives/2010/12/22/video-cbs-airs-mocking-picture-of-bushs-decision-points/

Comment:  Readers must remember that Marxism is a religion.  Believers have little worry about  propriety and truth.   The purpose of the movement , to micromanage citizen life according to atheistic ideals of the authoritarian Left in order to make a better EARTH is sacred…..Truth is relative, they claim.

The damage done is not in the product as much as it is in the act.   It appropriately describes the body and mind of folks at CBS……perpetual adolescents of, at present, a Marxist color.

“Mole” David Gergen Salutes Barack Hussein Obama!…..Lameduck Victor!

“Voters who flocked to the Republican banner seven weeks ago are probably scratching their heads, wondering, “Who really won in November?” After handing the president and Congressional Democrats the worst drubbing in more than half a century, they can only watch in disbelief as President Barack Obama has reeled off a series of unexpected victories.”  so says ‘mole’, David Gergen at CNN, writing:  “Obama’s Stunning Turnaround”.  He continues:

“A new stimulus bill, repeal of “don’t ask, don’t tell,” and now START — who would have believed that this shirt-tail session of Congress would have been so triumphant? They call it “lame duck” but it was anything but lame.

What happened? One answer, I would submit, is that the president and his team found a better approach to governing: Instead of relying on the Democratic caucus in each chamber to deliver, they built up coalitions of their own that swayed public opinion in their direction and gave them leverage in Congress.

On the extension of tax breaks — along with several other tax breaks the president wanted — the White House cut a deal with Sen. Mitch McConnell and other Republicans. Liberal Democrats naturally cried foul, but the White House-GOP coalition sent a persuasive signal to the public that this was a reasonable compromise. Polls showed the public coming down in favor, and as night follows day, Congress voted the compromise into law. (Contrast how quickly the public turned against the health care reform when it was a Democrats-only bill.)

On “don’t ask, don’t tell,” and on START, the White House had a different, but equally formidable, coalition that helped to turn the tide in the president’s direction. The fact that Bob Gates — one of the most respected defense chiefs in history — and the chair of the Joint Chiefs, along with the poll of service members, came out in favor of repealing DADT made a huge difference in swaying both public opinion and Congress.

START appeared all but dead until the president assembled a group of Republican heavyweights — from George H.W. Bush and Kissinger to Baker and Shultz — whose vocal support for the treaty reversed the momentum.

In each case, there were also Senate stalwarts — Joe Lieberman and Susan Collins on DADT, John Kerry on START — who delivered, too.

From my biased perspective, I also thought the president was more effective because he seemingly played these fights more from the background than the foreground. We heard about him each day making phone calls, bringing in votes, but we didn’t see him so constantly at the podium. It worked!

The net result is that President Obama has regained his mojo much more quickly than anyone, including his closest advisers, might have imagined. Even Bill Clinton did not bounce back from his mid-term defeat so quickly.

None of this means that the president has erased the meaning of the elections. Voters clearly wanted to put a brake on excess spending and government that seemed to be growing out of control. If the elections were held again today, I would imagine that the results would be much the same.

Less noticed in the hubbub about Obama’s victories is how easily McConnell and company derailed the omnibus spending bill — one that gagged in the throats of the public with its more than 6,700 earmarks. More to the point, the Republicans have now set up a pair of showdowns in the first few weeks of the new year — one over lifting the debt ceiling that could come as early as February, the other when the new budget resolution expires in March. Either one could bring a shut-down of Washington — and unlike the Clinton-Gingrich donnybrook of 1995, Republicans could well have the public on their side this time.

So, tough, tough fights lie ahead. But the surprise is that Obama now enters 2011 on a more even playing field — and he and his team have shown a fresh approach to governing that could continue to serve them well in the new year.”

The opinions expressed in this commentary are solely those of David Gergen.

Comment:  Mr. Gergen pretended to be a Republican for years .  He fell in love with Bill Clinton, yet continued alleging he was ‘above’ partisanship as if religiously inspired only when working with Demcrats, yet showed up on television whenever a Republican was need to suggest political balance.   Marxism was not an American political concern in those days,   twelve to fifteen  years ago.  

He wasn’t so much a Judas as he was a mole.   He is still a mole, loving Barack Hussein Obama.  Now, he supports this Marxist.

The Gay Mess: How Openly Gay is Openly Gay? Barney Frank Isn’t Trustworthy to Answer

Yes, there will be trouble.  I expect the military, as feminized as it is already, might be able to handle it eventually.    In this narcissistic era  of America, the boundaries are going to be stretched and stretched and stretched.   Unless the military establishes strict  rules and abides by them!!     “Therein lies the rub.”

The following is a video interview with Barney Frank, a pompous irritating, mouthy gay Representative from Massachusetts who had been warming his seat for over twenty years.  Below that is a report of a scandal Mr. Frank was involved in during his early years as Representative. 

“A fun exchange via CNS News. Like Frank, I don’t quite get the worry here. For one thing, as DADT supporters often point out, there are already plenty of gays in the military (albeit closeted), so if the fear is of servicemen surreptitiously checking out their comrades in the showers, why bring it up now? If that sort of thing happens at all, presumably it’s been happening for years. Is the idea that gay troops will feel emboldened to ogle their platoon-mates more conspicuously now that they can be open about their orientation? I find that hard to believe given all the ink spilled lately about the number of combat troops who oppose repealing DADT (especially within the Marines). Gay servicemen surely realize that they’ll have to tread lightly in revealing their orientation; as one Army officer told the Times the other day, “The first gay men (as the infantry is all male) are going to need very thick skins.” Why risk alienating your squad by sneaking a peek when you know some of them will be badly disposed to you in the first place? It’s unprofessional, it’s hugely counterproductive to the cause of equal treatment for gays, and it’s guaranteed to make your life more difficult to some lesser or greater extent. Rather than flaunting their sexuality, I suspect most gay troops will, in the awkward words of GOP Rep. Todd Akin, make sure their “gayness” doesn’t “get in the way.”

That said, watch how quickly Frank changes the subject when CNS’s reporter asks whether male and female troops should be allowed to shower together too.

http://hotair.com/archives/2010/12/22/barney-frank-lets-calm-down-about-straight-and-gay-troops-showering-together/

Mr. Frank is a glib Representative.  In his sunrise as a Congressman he was involved in a scandal allowing  friend or friends to use his Congressional office  as a gay calling service.   The following  is a Washington Post report of the event.

 “By Bill Dedman

Washington Post Staff Writer

August 27, 1989

Prostitute and pimp Stephen L. Gobie settled in with his “girls” in his Georgetown town house one evening in late 1987 to watch “The Mayflower Madam” on television. As Candice Bergen portrayed upscale madam Sydney Biddle Barrows, Gobie’s companions had an idea.

“The girls turned to me and said, ‘You’re just like her,’ ” Gobie recalled in an interview yesterday. “That’s when I realized that I was in the middle of a developing story that could be worth something someday. I told them, ‘One day, don’t be surprised if you see me on TV.’ “

Gobie’s dream has come true. His accusation that Rep. Barney Frank (D-Mass.) knew that Gobie had operated a prostitution service out of Frank’s Capitol Hill apartment became national news after it was first reported Friday by the Washington Times.

Frank, one of two openly gay members of Congress, confirmed Friday that he paid Gobie for sex, hired him with personal funds as an aide and wrote letters on congressional stationery on his behalf to Virginia probation officials, but Frank said he fired Gobie when he learned that clients were visiting the apartment.

Frank, a leading House liberal, likened himself to Henry Higgins, who in “Pygmalion” tries to transform a cockney waif into a member of English society. Gobie dismissed that as “garbage.” “This is not the case of the poor waif who is being sheltered,” Gobie said. “This was the first time he felt good in a relationship. Here’s a guy who didn’t have a social life until he was 45.”

Gobie’s craving for public attention also has produced an uproar in Montgomery County. Gobie said he maintained a relationship with Gabriel A. Massaro, the principal of Chevy Chase Elementary School, and used an office at the school in late 1987 to make telephone calls and have one client meet a prostitute.

Massaro, who has been placed on administrative leave, has been unavailable for comment.

Gobie said his motive was largely financial. Gobie had offered his story to WUSA-TV (Channel 9), then the Washington Times. Later he came to The Washington Post, saying he was looking “to start a bidding war” for “a better offer” than the Washington Times made. He and the Times say he was not paid.

Gobie also said he wants “to show up people in positions of power who abuse other people.”

Gobie expressed no regret for any damage done to the careers of Frank and Massaro.

Although Frank and Gobie differ in some details of their relationship, they agree on the story line. They met on April Fool’s Day 1985. The representative answered a classified ad in the Washington Blade, the local gay weekly. “Exceptionally good-looking, personable, muscular athlete is available. Hot bottom plus large endowment equals a good time.”

Then in his third term, the 45-year-old representative had not yet stated his homosexuality publicly. He paid Gobie $80 in cash for sex.

Gobie, then 28, was one of many young men “freelancing” in male prostitution. Gobie said he was born in Boston and grew up in a military family. He has felony convictions for possession of cocaine, oral sodomy and production of obscene items involving a juvenile.

Gobie and Frank say they became more friends than sexual partners. Gobie says he attended a bill-signing at the White House, and helped coach and played left field for Frank’s team in the Congressional Softball League. “I was the star player,” Gobie said.

Frank began to help Gobie financially, paying his attorney and court-ordered psychiatrist. The House member also said he hired Gobie as a personal aide, housekeeper and driver, but Gobie said that was a “cover story” concocted for probation officers.

In late 1985, Gobie says, he began to use Frank’s apartment and two other locations for prostitution. Frank knew about the prostitution all along, but it was never explicitly discussed, Gobie says.

“He knew exactly what I was doing,” Gobie said. “It was pretty obvious. If he had to come home early {from work}, he would call home to be sure the coast was clear . . . . He was living vicariously through me. He said it was kind of a thrill, and if he had been 20 years younger he might be doing the same thing.”

Frank denies that he knew, saying he learned from his landlord and kicked Gobie out in August 1987. Gobie supports this part of Frank’s story.

Gobie said his disclosures are only beginning. “I think I’ll just slap a book together. Sydney Biddle Barrows made in excess of a million. I thought ‘Capitol Offenses’ would be a nice title.”

Comment:   Frank’s denial was questioned.

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