Why Are Progressive Groups Slamming Julián Castro?

Castro,Julian-Clinton,HillaryTexas Insider Report: WASHINGTON, D.C. – In the middle of April, POLITICO reported that several progressive groups have targeted HUD Secretary Julián Castro, questioning his vice presidential qualifications if Hillary Clinton were to win the Democratic presidential nomination. The fight between a new-school Latino group and some old-school Latino groups erupted into chatter that kept getting stronger, so much so that Castro had to address it with NBC News.  

The new-school latinos campaign led to dissension among Latino organizations. Others have weighed in on the story, claiming that Castro being Latino is just irrelevant. In the midst of all this hubbub, one thing became clear — none of those old-guard Latino groups countered on the merits of the attack against Castro. Apparently, he is untouchable, regardless what he does.

Joe Velasquez, a former deputy political director in the Clinton Administration, submitted his resignation letter from the board of American Family Voices (AFV), which was part of the coalition of groups that hit Castro for a HUD policy the groups argue is too friendly to financial institutions looking to buy distressed homes.

berniesanders-hillaryclintonAnd, the Sanders campaign denied having any part in the effort to discredit Castro.

Progressive groups target Julián Castro

They say the record of the HUD secretary makes him unsuitable to be Clinton’s VP.

By Edward-Isaac Dovere

The 41-year-old Julian Castro is seen by many as the perfect balance to Hillary Clinton. But the veepstakes oppo war has begun.

With Bernie Sanders’ durability exciting progressives at their potential to shape the Democratic race, a coalition of groups — many of them backers of the Vermont senator — are launching a preemptive strike against Housing and Urban Development Secretary Julián Castro, aimed at disqualifying him from consideration to be Hillary Clinton’s running mate.

Tuesday morning, the group emailed petitions to several million people attacking Castro on the relatively obscure issue of his handling of mortgage sales and launching a website with an unsubtle address: DontSellOurHomesToWallStreet.org.

They’re just as open with their political aims: to publicly discredit Castro as a progressive, latching onto the mortgage issue to seed enough suspicion to keep him off Clinton’s shortlist.

“It’s a situation where the Clinton campaign wants Castro to be a major asset to her chances of winning the White House, and unless he changes his position related to foreclosures and loans, he’ll be a toxic asset to the Clinton campaign,” said Matt Nelson, the managing director for Presente.org, the nation’s largest Latino organizing group that focuses on social justice.

“All year, we’ve seen the candidates tripping over themselves to show how tough they’ll be on Wall Street,” said Kurt Walters, the campaign manager for Root Strikers, a 501(c4) group of Demand Progress and its 2 million affiliated activists, who is planning to deliver the petitions to Castro’s office when they’re ready. “Then to turn around and take a step backwards on that exact question, and Castro, Julian3hput someone who has been doing the exact opposite — I think it would be tough for a lot of people who care about Wall Street accountability to get excited about that pick.”

By the coalition’s calculations, HUD under Castro has sold 98 percent of the long-delinquent mortgages it acquired through a program aimed at preventing foreclosures to Wall Street banks under Castro’s watch, without anywhere near the number of needed strings attached. (HUD says that figure is way off.) And Nelson and Walters say that for a politician who’s aiming to be considered the vice presidential prospect for both progressives and minorities, Castro has done too much to help private equity firms like Blackstone, instead of black and Latino communities.

“If Secretary Castro fails to create significant momentum in terms of stopping the sale of mortgages to Wall Street, then I do think it disqualifies him. But there’s time left on the clock,” said Jonathan Westin, the director of New York Communities for Change, which was formed out of the remains of the community activist group ACORN. “I think a lot of the progressive movement would not be in support of a Castro ticket if he fails to make traction here.”

The 41-year-old Castro is seen by many as the perfect balance to Clinton — younger and Latino, with a history as mayor of San Antonio and now two years in the Obama administration, handsome and with a 2012 convention keynote speech that immediately made him a rising star to watch in the party. And people close to him say he’s a proven progressive across the board.

“Castro has a strong record at HUD fighting on behalf of progressive issues including protecting those with criminal records, standing up for LGBT rights and advocating for more inclusive communities through affirmatively furthering fair housing,” said one person close to the secretary.

But Maurice Weeks, an Atlanta-based organizer who works on housing justice in communities of color for the Center for Popular Democracy/CPD Action, said that Castro’s lack of action at HUD is breeding more gentrification and suffering in a way that should make blacks and Latinos pay attention.

“What I wouldn’t be excited about is any candidate, not just Julián, who is looking to further some of these practices,” Weeks said.

At issue is the Distressed Asset Stabilization Program, started in 2010 to allow mortgages going toward foreclosure to be sold to what HUD calls “qualified bidders and encourages them to work with borrowers to help bring the loan out of default.”

The progressives attacking Castro say they believe the mortgages should be sold instead to nonprofits and other institutions that would care more about the communities involved. What Castro’s done, they say, has essentially amounted to a fire sale for Wall Street firms.

Castro,Julian3hRep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus and one of Sanders’ few endorsers in Congress, complained about the program to Castro last week in a letter obtained by Politico.

“Your own Distressed Asset Stabilization Program, which was designed to help right the wrongs of the meltdown years, has been selling homes that once belonged to the families I’ve spoken with at rock-bottom prices to the Wall Street entities that created this situation in the first place,” Grijalva wrote.

HUD says that Castro has continued to meet with advocates, in the hopes of improving the policy, and points to several changes that have been made — including those that have increased the number of mortgages sold to nonprofits. An official pointed to changes made a year ago that, among other things, now require servicers buying loans to delay foreclosure for a year.

“Providing an option for homeowners to remain in their homes is one of the reasons the DASP program was created” said a HUD spokesperson. “We’ve received feedback from stakeholders which has led us to make a number of important changes to the program including the creation of nonprofit-only pools and delaying foreclosure for a year. Additionally, we are still evaluating further enhancements to the program to meet our core mission.”

But that’s not enough for the groups joining the coalition to attack Castro. Those include the Alliance of Californians for Community Empowerment (ACCE) Action, American Family Voices, Color of Change, Courage Campaign, CPD Action, Daily Kos, MoveOn, New York Communities for Change, Other 98%, Presente, RootsAction, Rootstrikers and the Working Families Party.

With the exception of the Working Families Party, which is backing Sanders, the groups have not formally endorsed a candidate in the presidential primaries.

Most conversations about Clinton’s prospective pick center on Castro and Sen. Tim Kaine (D-Va.), and the secretary’s ambitions to be the vice presidential nominee are well known.

But among progressives, so are the suspicions about his bona fides. The red banner across the website proclaiming “TELL HUD SECRETARY JULIAN CASTRO: STOP SELLING OUR NEIGHBORHOODS TO WALL STREET!” amounts to the opening salvo in doing something about it.

“There’s a lot of hope around him,” said Brandi Collins, campaign director for the 1.2-million member Color of Change, who said she was one of the people excited by the possibilities opened up by his keynote speech.

Collins said this complaint about Castro’s leadership is reflective of a whole range of issues her organization has had with what members say is the secretary’s closeness to Wall Street and lack of attention to black and brown communities.

“If he’s not showing up for our communities while the cameras aren’t there, we don’t know that he’ll show up when he’s on his way to the White House,” Collins said.

According to Julia Gordon, formerly at the Center for American Progress and currently an executive vice president at the National Community Stabilization Trust, the coalition may have a point — if only because it is taking advantage of opaque accounting at HUD. Gordon said she’s met often with HUD about these issues but hasn’t seen the kind of progress she’d like or evidence that the program matches the claims that officials make.

“We know it’s been good for investors. According to HUD, it’s been good for the fund, although the level of detail that they release to account for it is minimal. We really don’t know how good it’s been for the homeowners, and that’s where this wave of protests is coming from,” Gordon said.

Laurie Goodman, the director of the Housing Finance Policy Center at the Urban Institute, said that the people who are attacking Castro for selling the loans to Wall Street are misinterpreting the pragmatic realities about what’s in play.

The mortgages in question tend to be delinquent for over two years, she said, and getting them out of HUD with its limited resources and tools to deal with them is a positive step for homeowners. Only big banks can take on mortgages like that, she argued, making the nonprofit issue moot.

“The only way to help these borrowers is to sell the loans. You don’t have any other buyers big enough in size,” she said. “Even if you wanted to do something different, you couldn’t.”

Within that, though, Goodman credited HUD under Castro for making “some really big improvements.”

Not nearly enough, according to Gordon.

“Both HUD and [the Federal Housing Finance Agency] have let down communities by not focusing on what they want the buyer to do with these,” Gordon said, arguing that they’ve been focused instead on offloading the debt. “They’re just like, ‘Get it away from me.’”

The idea that Castro would be the first Latino on a national ticket means something, Nelson said, though he argued that this only adds to the burden for the secretary to show leadership on the mortgage issue in the way progressives want at this moment of added attention to their concerns.

Nelson said that at Presente, they think of it like a parable — it doesn’t make it any better to be hurt if the hurt is coming from one of their own.

There are two trees in a forest, Nelson said, and they see an ax coming to chop them down. “Don’t worry,” says one tree to the other, “the handle’s one of us.”

“Basically,” Nelson said, “we’re fighting to make sure Castro isn’t the handle.”

By Edward-Isaac Dovere

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