At the end of last year Congresswoman Betsy Markey (CO 4) joined the Blue Dog Coalition, a self described group of 54 conservative and moderate Democrats that focus on fiscal issues including a balanced budget and the national debt.   A review of Markey’s voting record leaves one to wonder if her support for fiscal reform is all bark and no bite.

Markey is a freshman democrat lawmaker from a conservative district (voter registration favors republicans by nearly10 percent) that voted for John McCain in 2008.  She is the first democrat to represent the 4th CD since Wayne Aspinall in 1973.  The Cook Political Report calls the 4th CD a “toss up” for 2010, which is why Markey has tried so hard recently to appear as a fiscal conservative.

Early in 2009 she voted for or supported unpopular legislation such as the stimulus package, card check, and cap and trade.  My friend and fellow blogger Randy Ketner did an excellent job of highlighting Markey’s short legislative tenure.  His lengthy “Colorado Political Analysis 2010” appeared on Red State.

It seems that Markey is reading the tea leaves, which are telling her to move to the right or at least look like she is moving to the right.  Recently Markey has voted “against” her party on both health care and raising the debt limit, but in reality she voted with party leadership on all procedural and amendment votes only voting against leadership on the final vote.  That way she can position herself as independent of the democrat leadership without upsetting them.

Take health care for instance. Markey says she voted against H.R. 3962 Affordable Health Care for America Act because she claimed it did not do enough to “cut health care costs that crushing our businesses and families.”  She claims to support health care reform just not this specific piece of legislation. 

If that is true, then why did she vote no on a motion to recommit the bill?  According to GovTrack, Markey voted no on House Vote #866 which was “a final opportunity to revise” it before passage.  A motion to recommit sends legislation back to committee with instructions on how to fix the bill.  It can be used constructively or can be used to kill a “bill before it moves to a final up-or-down vote in the House.”  If Markey is serious about health care reform but not this bill, why vote to move it along instead of fixing it in such a way that she can support it?

Another example of Markey voting with democrat party leadership on rules and procedures for unpopular legislation then voting against them on the final tally is H.J. Res. 45 to increase the statutory limit on public debt.  This one is interesting because 38 Democrats voted not to raise the debt limit, 22 are freshman lawmakers facing competitive races in the fall, 17 are Blue Dogs.  Of the 17 Blue Dogs, only four enabled party leadership with procedural votes that allowed the debt limit resolution to go to the floor of the House.  Markey was one of those four. 

Markey voted yes on Roll Call Vote #45, which ordered the question: “Providing for consideration of the Senate amendment to the joint resolution (H.J. Res. 45) increasing the statutory limit on the public debt.”  She then voted no on Roll Call Vote #46 on “agreeing” to an increase. 

Markey played the same game with H.R. 1106: Helping Families Save Their Homes Act, which allows bankruptcy courts to modify mortgage contracts.  She enabled democrat leadership when she voted no to recommit and yes to proceed.  On the final vote she said no. 

These aren’t the only examples.  I’ll highlight more as we get closer to the November vote.

The 4th CD is the heart of Ag country in Colorado.  Weld County is the 8th largest Ag producing county in the United States.  While Congresswoman Markey can claim to be a fiscal conservative, our sensitive olfactory receptors can detect a load of manure when we smell it.

Congresswoman Betsy Markey’s pivotal yes vote on the controversial cap and trade legislation may come back to haunt her as she seeks re-election  to represent Colorado’s 4th congressional district.

Within Markey’s district is Weld County, the country’s  eighth largest producing agricultural county in the United States.  Reuters just reported that  Bob Stallman, head of the American Farm Bureau Federation, made the following statement about cap and trade:

American farmers and ranchers ‘must aggressively respond to extremists’ and ‘misguided, activist-driven regulation … The days of their elitist power grabs are over.’

Despite pleas from the global warming alarmist crowd, Stallman warned Americans that cap and trade would destroy farmers, ranchers and those who rely upon them.

Vast amounts of farmland could become carbon-capturing woodlands under cap-and-trade, “eliminating about 130,000 farms and ranches,” said Stallman. One federal analysis says 8 percent of crop and pasture land could be turned into trees by 2050 because trees would be more profitable than crops.

Good luck defending your vote Congresswoman Markey.

New Frontier Bank made the front page of yesterday’s Wall Street Journal with an article titled “Town’s Friendly Bank Left Nasty Mess.” 

What is left out of the article is just how bad the economic impact will be.  Good and bad loans will be packaged and sold for pennies on the dollar to large investment firms or hedge funds.  According to the FDIC, the terms of the original loan remain in place unless borrowers are as little as one day late on one payment. That note may get called in.  Can’t pay? Tough.  You aren’t negotiating with your local banker anymore.   Loan managers may begin foreclosure and sell off the assets.  From what I understand sale of bundled loans will begin later this summer.  We will begin to see the fallout by the end of 2009.  So much for our late year recovery.

Denver gets our water. We get  property devaluations, dried up farm land, double digit unemployment and a depressed tax base.  Despite how bleak that picture looks, we will recover.  It may take 3 to 5 years but we will recover.

Something to keep in mind, bank regulators audited NFB loans every six months and never found a problem with them until the end of 2007 when the economy was headed south.   NFB complied with new regulations but the economy continued to tank. 

According to bank insiders, at the end of 2008 NFB applied for $42 million in TARP funds but Governor Bill Ritter would not sign a letter of recommendation so FDIC Chair Shelia Bair wouldn’t approve the request.  A request to Ken Salazar to intervene got little response during last fall’s busy campaign season. 

Also according to those involved in negotiations, the FDIC nixed a plan that would have brought in much needed capital from an investment group out of Boulder.  News reports say that the deal “fell through” but some of parties involved insist that is not the case claiming the FDIC targeted NFB for closure.

Question number one: If NFB had been approved for the TARP funds, would that have improved the bank’s balance sheet enough to weather the current recession?  In other words, would $42 million in taxpayer dollars have saved the $670 million that it now is costing to fix the mess? 

Question number two: If the FDIC hadn’t stopped the sale of NFB to the Boulder group, would NFB have been able to survive — saving taxpayers millions and Northern Colorado from the pending economic devastation.

I do not support bailouts.   The worst thing about them, is that the government gets to pick winners and losers.  Clearly, Northern Colorado has been tagged a loser.   It’s also clear that those in charge underestimated the pain of closing NFB versus keeping it afloat with TARP money.  We are in uncharted waters.  In my opinion, neither the FDIC, Governor Ritter (he signed the closure order), nor our congressional delegation (Congresswoman Markey and Senators Benett and Udall) ever grasped the magnitude of the situation.  The economic multiplier effect will be in the billions of dollars.  This is our economic tsunami.  

The collapse of NFB will be the biggest issue in Northern Colorado (especially the 4th CD) of the 2010 election.

For those who want to skewer NFB management, I understand your anger but I don’t want to use them as a poster child for why the FDIC should shutter all community banks.  NFB isn’t the only one (and there will be more).  Community banks are imperative to economic growth in small communities that don’t have connections to national financial institutions.  I think this quote from Windsor Mayor John Vazquez sums it up perfectly, ”At community banks it’s not all about performance and projections…It’s about belief in the individual, the guy you sit next to in church.”

A warning about this post: I use anonymous sources so take it through that filter.   However, everything posted was told to me independently by more than one source, or I was able to verify another way. 

Bill Jackson, Ag reporter for the Greeley Tribune, said it best when he wrapped up his article about Ag producers who face economic ruin following the collapse of New Frontier Bank.  Jackson wrote, “it could get real ugly.” 

Most businesses that had a loan with NFB have been told to find a new lender or face their loan being packaged and sold to an out of state bank for pennies on the dollar.  According to a phone conversation between one business owner and the FDIC,  loans are “going to be sold to an outside lender.  It’s not going to be anything here in town or maybe even in the state.   You’re never going to be able to actually talk to anybody to get anything done in person.  It will always be over the phone.”

And even one day late on a payment could constitute a violation of the terms of the loan, which allows the out-of-state bank to call in the loan.  The FDIC representative warned, “it’s in your best interest to get the loan refinanced before it’s sold.”

There are a several problems with this suggestion. First, there is no capital.  Second, the FDIC has made it harder for banks to loan by raising the required capitalization levels. Three, many of these loans are underwater as it is so they don’t qualify even if the capital is available.   And four, banks have no incentive to loan when they know that in a few short weeks they can buy the notes at auction for pennies on the dollar. I’ve heard from some former NFB customers that have been to dozens of lenders with no success.

Couple the financial mess with low commodity prices and hundreds of wells shut down two years ago, and we face a grave future. Agriculture is a $1.5 billion business in Weld County, making it 8th in the nation in agricultural product sales and the only county in the top ten outside of California.  This important industry is in trouble.  According to Jackson,

Many veteran agribusiness people are predicting the fallout from New Frontier’s closure will be worse than when the Greeley packing plant of Monfort was shut down for two years in the early 1980s, and the financial woes farmers faced in the mid-1980s with double-digit interest rates and commodity prices at the bottom of the barrel.

On my show last week, Carrie Linker, executive director of the Morgan County Executive Development Corporation, voiced another frightening possibility about what could happen if farmers, ranchers and dairies go bankrupt.  Banks foreclose and sell to anyone who will buy.  Buyers may include municipalities that only want the land for the water rights that go with it.  Front range cities could buy the water and allow the once fertile farm land to dry up in order to satisfy thirsty populations.

Ag isn’t the only troubled industry since the closure of NFB.  According to reliable sources, commercial real estate is about to see the bottom drop.  Source predictions include:

• double digit unemployment
• up to $1 billion of commercial real estate flooding an already saturated market as owners try to avoid foreclosure and banks try to get what they can for properties that are upside down.
• additional bank closures possible

A land developer told me that the impending implosion of the commercial real estate market will make the recent devaluation in the residential market look like a “day at Disneyland.”

It’s clear that the FDIC doesn’t know how to handle the situation.  They don’t have enough people on the ground in Greeley to make decisions.  I called the FDIC last week and have yet to receive a call back.  According to former NFB customers, that seems to be the pattern with federal agency.

To paraphrase Jackson, the picture isn’t pretty.  A longtime resident who is close to the situation described No CO’s economic future: “Think of the New Frontier closure as an earthquake that caused a tsunami that is currently out at sea.  The forecast is we are about to get slammed and all we can do is prepare.  Sadly some people are still walking on the beach oblivious to the danger.”

Jackson is right, it could get ugly, real ugly.

“I don’t need a bailout. What I do need is a bank,” said Gary Teague a northern Colorado farmer.  According to the Denver Post, Teague ”runs a $50 million business that employs 155 people, and the Federal Deposit Insurance Corp. has given him 30 days to renegotiate his loans, or they will be liquidated.”

Teague made his “tearful” statement during a community forum with Secretary of Agriculture Tom Vilsack, Congresswoman Betsy Markey and Senators Michael Bennet and Mark Udall.  The meeting at the Morgan County Fairgrounds drew 300 “angry farmers and ranchers [who] demanded help from the federal government” after the collapse of New Frontier Bank.

On Saturday, Colorado’s congressional delegation announced that Vilsack freed up $253 million in federal funding to be used for operating loans for farmers and ranchers in search of banks to extend them new lines of credit.  It’s up to banks to pick up the money and extend the loans. 

While the $253 million is welcome news, it is well short of the nearly $448 million in outstanding agricultural loans that New Frontier had when it closed on Friday.  Despite claims from farmers and ranchers that they are current on loans, sources tell me some bankers simply are hesitant to lend.  Agriculture is a risky business.  The Denver Post confirmed it: “Several area farm leaders said banks in northern Colorado view many of the New Frontier loans as distressed and will not take them on.”

The ripple effect of this will be profound.  If the eighth largest agricultural county in the United States goes belly-up, not only will Weld County be hurt but also the entire state of Colorado.  Summed up by one attendee, “‘Many of the people in this room buy from each other, whether it’s grain or alfalfa. You can’t believe the carnage that will happen’  if the farmers don’t receive more help.”

Couple that with a possible decline in oil and gas revenue — our economic outlook is worrrisome.

Congresswoman Markey’s office just sent me the following information regarding her efforts to help Weld County’s agricultural community:

• Congresswoman Markey spoke Wednesday with the head of the Federal Deposit Insurance Corporation (FDIC), and was assured that the FDIC is committed to working with borrowers to secure new loans with other lenders. The Congresswoman is committed to making sure that they do.       
• There has been some confusion surrounding what happens to people’s bank accounts and loans tomorrow, Friday, May 8th         
• This Friday, if you are a depositor - meaning if you have a checking or savings account - on Friday your account will be transferred to Bank of the West - every penny of it.        
• You can transfer your money elsewhere, but if you take no action, your money will transfer to Bank of the West. However, Bank of the West is not going to commit to new LOANS.      
• The FDIC has confirmed that they will remain on the ground in Colorado to work with borrowers to assist them in securing new loans for the foreseeable future. (approx. 6 - 9 months)      
• Congresswoman Markey will continue to pressure USDA to shift agency funds from its guaranteed loan program to its direct operating loan program, which has exhausted all of its funds.      
• Transferring those funds would ensure both programs are available to qualified farmers who need the funds for spring plantings, farmhands and cow feed.       
• This situation is deadly serious, and could have far-reaching ramifications across the state.          
• Congresswoman Markey is committed to doing everything in her power to ensure that credit remains available for farmers, families and businesses in Northern Colorado.

Will a lack of congressional experience hurt agriculture in Northern Colorado? 

With an annual market value of $1.54 billion, Weld County is the nation’s eighth largest agricultural county in the United States.  Much of the county’s agriculture was financed through New Frontier Bank lines of credit extended in the spring to farmers and ranchers who then repaid them once harvest is complete or livestock is sold.

After being taken over by the FDIC last month, New Frontier Bank will close it’s doors on Friday.  Along with the closing goes hundreds of millions of dollars in lines of credit for Northern Colorado farmers, ranchers and other small businesses.  A recent Denver Post article explained that NFB’s closing will have a “severe” effect on the local economy but that “the impact on the agricultural community could be profound.”  One third of Colorado’s dairy farms relied upon financing from NFB.

I’m not going to rehash what happened at NFB.  Read the Denver Post article cited above for more information on what led to the nation’s largest bank failure.  My concern is what will happen to agriculture in the nation’s eighth largest agricultural county and one of the leading industries in Weld County.

Last Tuesday, Senators Mark Udall and Michael Bennet, along with 4th CD Congresswoman Betsy Markey, sent a letter to Secretary of Agriculture Tom Vilsack  asking him ”to shift funds from the agency’s guaranteed loan coffers to a program that would let the government bypass banks and make direct loans to farmers.”   According to the Denver Post, the money could “steer millions of dollars in new credit resources to the financially battered Weld County area, where farmers are in limbo after the collapse of New Frontier Bank.”

Our congressional delegation is to be commended for sending a letter asking for help.  Problem is that we are nine days from that letter and the Fort Collins Coloradoan reports that Secretary Vilsack has not responded to Senator Bennet who sits on the Senate Agriculture committee. 

I spoke with Bennet’s office on Tuesday of this week.  Seven days after the letter was sent, there still had been no follow-up, face-to-face meeting between Vilsack and Bennet.  The two men had not spoken although I was told that senior staff from both offices were in constant contact.  

I’ve also been in contact with Congresswoman Markey’s office.  As of late yesterday Markey’s office had not received a response from Vilsack. Farmers don’t have time to wait.  Planting season is here.  

Our congressional delegation needs to demonstrate that they can play hardball.  On my show yesterday, Weld County Commissioner Sean Conway (former chief of staff for Senator Wayne Allard) said that Bennet needs to demand a meeting with Vilsack and press him to make lines of credit available for area agricultural producers.  As a member of the Ag committee Bennet has the power to hold up key confirmations  if Vilsack doesn’t respond.  Conway said that is how Senators get things accomplished in Washington. 

Letters are nice.  They get some press and make it seem as if elected officials are actually doing something.  But without personal follow-up from Bennet to Vilsack, the wheels of government may grind too slowly to help agriculture in Weld County.  Conway also has been in contact with Colorado’s congressional delegation over the closure of NFB.

It appears that our congressional delegation suffers not from lack of trying but from lack of experience.  Neither Bennet, nor Udall nor Markey have any agricultural experience.   Nor do I for that matter but I do understand that we are out of time, and I didn’t promise to represent Weld County in Washington D.C. Staff for Bennet and Markey seem sincere but this situation is on the verge of becoming a catrostrophe.  (BTW — I give Markey press secretary Ben Marter a lot of credit for quickly returning my emails and phone calls)

Also, they are all freshman in their positions and both Bennet and Markey are brand new to Congress.  Bennet in particular doesn’t seem to know how to use his power as a member of the Senate Ag committee.  And Udall is MIA.  His office has not returned any phone calls.  When I called his  field representative, Greeley resident Pam Shaddock, she referred me to the same person who had not returned any of my previous messages.   He wasn’t on the conference call with Markey and Bennet.  Don’t bother with the USDA and Secretary Vilsack, callers wind up in a black hole of 85,000 employees who have no idea where Weld County is located.

Other banks and the FDIC are trying to fill to the massive void in credit for area farmers according to the Greeley Tribune but it may not be enough.

Our farmers and ranchers are not asking for a bail out.  They simply need the lines of credit that they lost through no fault of their own.  Other area banks are trying to help but don’t have enough capital.  There is no time left.  I hope our congressional delegation can prove they can play with the big boys (and girls).