Ponzi Politics
I’ve had some requests in the past 24 hours for my reaction to the release of the draft legislative panel report on the Financial Resources Mortgage scandal, and in particular, questions about whether its criticism of former New Hampshire Attorney General Kelly Ayotte is a serious problem for her U.S. Senate campaign, just two weeks before the Republican primary. As I said yesterday shortly after the draft became public, this couldn’t have come at a worse time (or a more suspicious one, according to Ayotte supporters) for her candidacy. It will certainly give both her potential Democratic opponent, Rep. Paul Hodes, and the other Republican rivals a renewed opportunity to question her leadership ability. The media will also continue to explore all possible angles on the story right up until ballots are cast, which will keep it highly visible in the public discourse surrounding the race.
But the report mainly paints a larger picture of systemic governmental failure in dealing with fraud cases, complete with overlapping and conflicting bureaucratic jurisdictions. Ayotte is singled out and assigned at least some of the blame for this in the FRM case. The question for me is whether voters will see this episode primarily as a failure of Ayotte’s leadership, or instead as a more general institutional design failure of the sort we see in government all too frequently. With no new revelations to detail in the report, the Democratic-led investigative committee is essentially left to level anew prior criticism first heard during Ayotte’s public testimony last spring. The report’s content and timing are therefore ripe for the inevitable charges of politicization. My sense is that none of it will fundamentally alter the arc of the scandal story, or Ayotte’s role in it. Since it didn’t derail her candidacy in June, my guess is that it probably won’t now.

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