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HERB AND MARION SANDLER Printer Friendly Page

The Education of Herb and Marion Sandler
By Jeff Horwitz
March/April 2010

Once Trusted Mortgage Pioneers, Now Scrutinized
By Michael Moss and Geraldine Fabrikant
December 28, 2008

The Irresponsible Center for Responsible Lending
By Sean Higgins
March 2010

 


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  • Billionaire philanthropic allies of George Soros and Peter Lewis
  • Played a key role in the financial crisis of 2008

 


Born in 1931 and raised on Manhattan's Lower East Side, Herbert M. Sandler graduated from the City College of New York in 1951 and Columbia Law School in 1954. After completing his education, he worked for the Waterfront Commission of New York Harbor and as an attorney at a small law firm in lower Manhattan.

Marion Sandler, nearly two years Herbert’s senior, was born Marion Osher in Biddeford, Maine, on October 17, 1990. She received her BA from Wellesley College and her MBA from New York University. 

In 1963, two years after marrying, the couple moved to California and opened the Golden West Financial Corporation, a risk-averse residential mortgage portfolio lender that they would operate until 2006. With their new holding company, the Sandlers were able to secure bank loans plus additional funds from Marion’s family to purchase, for $3.8 million, the Oakland-based Golden West Savings and Loan, which had assets of $38 million.

In 1975 the Sandlers combined Golden West S&L with another California firm, World Savings, which had 107 offices and $1.8 billion in assets. Taking advantage of regulations passed in 1981, the Sandlers’ World Savings Bank (WSB) steadily grew, specializing in the first-of-their-kind adjustable rate mortgages that allowed borrowers to defer paying their interest. By 2000, the WSB -- with 450 locations, and assets of $58 billion -- had become the second-largest savings-and-loan in America. On July 19, 2001, Nancy Pelosi inducted the Sandlers into the Bay Area Business Hall of Fame for their “longstanding entrepreneurial and philanthropic commitment to the San Francisco community.”

In 1988 the Sandlers established the Sandler Family Supporting Foundation (SFSF), whose assets, by 2002, totaled $71,894,602. In its first 15 years of operation, SFSF gave tens of millions of dollars to the ACLU and Human Rights Watch. By 2000, the Sanders had become philanthropic allies of George Soros. Together with Soros, they funded MoveOn.org and helped to establish the Center for American Progress, on whose board of directors Marion served. In 2004, along with Soros and Peter Lewis, the Sandlers created America Votes in order to bolster Democratic get-out-the-vote drives during that year's election season. In 2006, the Sandlers also founded and financed Pro Publica, an investigative journalism outfit.

The Sandlers had noteworthy connections to the notoriously corrupt community organization ACORN and to the Center for Responsible Lending (CRL), an ACORN ally that championed the Community Reinvestment Act (CRA) before the financial meltdown of 2008. In 2002 the Sandlers co-founded CRL and gave it $20 million over the next six years. From 2001 to 2008, the Sandler Family Foundation also gave ACORN and its various front groups -- particularly the American Institute for Social Justice and Project Vote -- more than $7 million. Former ACORN employees have claimed that the Sandlers paid ACORN to dispatch protesters to harass Wells Fargo Bank, a major competitor of the Sandlers' Golden West.

In contrast to their allies George Soros and Peter Lewis, the Sandlers were able to maintain a low public profile for years. They made headlines in October 2006, however, when they sold their World Savings Bank for $24.3 billion to the Wachovia Corporation, pocketing $2.4 billion and putting $1.4 billion into their foundation, making it one of the thirty largest foundations in the America.

At the time of the sale, the Sandlers’ World Savings Bank carried $122 billion in adjustable rate mortgages. In 2008, Wachovia began to implode due to a lack of liquidity and was eventually bought out by Wells Fargo in October of that year. Many analysts contend that the “soaring portfolio of World Savings” helped to sink Wachovia. Herb Sandler, however, defended his business practices: “I didn’t mislead anybody, and to the best of my knowledge, our company didn’t, though there may have been an isolated case here and there.” “If home prices hadn’t declined by 50 percent, nobody would be raising these questions,” he stated in 2008.

On October 4, 2008, however, Saturday Night Live aired a skit in which the Sandlers were depicted as predatory lenders. Under their names, SNL placed the caption “people who should be shot.” Compounding the Sandlers’ negative press was a Time magazine list that identified them as two of the “25 people to blame for the financial crisis.” The New York Times also labeled the Sandlers “pariahs” -- and on December 24, 2008, the Times reported that their mortgages were the “Typhoid Mary” of the housing crisis. On February 15, 2009, CBS’s 60 minutes also aired a segment that featured the Sandlers’ World Savings Bank as one of the primary examples of how the mortgage industry had destroyed itself and unleashed an economic collapse.

On April 22, 2009, the Sandlers wrote a letter to Bill Keller of the New York Times, criticizing the paper’s news coverage of them. The Sandlers defended the adjustable rate mortgages that had defined their financial success, distinguishing between those which their bank had offered consumers and the kind that had caused so much economic disaster. While issuing some corrections, the Times defended its original reporting: “We still stand by our Golden West story and believe it was a very strong piece to pursue and that we framed it fairly.”

On April 26, 2010, the Sandlers also wrote to CBS in an attempt to discredit the 2009 60 minutes episode that had so damaged their reputation. CBS did not issue any correction.

Herb Sandler has sat on the advisory council of J Street for a number of years, as did his wife, Marion, prior to her death on June 1, 2012.

 

 

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