KAMALA HARRIS AND THE WHITE HOUSE

State AG's Acts of Independence

Kamala Harris was an early and fervent supporter of Barack Obama's
candidacy for president. But as state attorney general, Harris is
showing a willingness to criticize administration policy and even
stand up to intense White House pressure when she believes it is not
acting in the best interest of California.

The latest and most profound example is Harris' decision to pull
California out of what was about to become a 50-state settlement of
lawsuits against five major banks in connection with the foreclosure
crisis. The Obama administration was pushing for this "global
settlement" on the argument that it would provide near-term relief
for Americans who had lost or were about to lose their homes to foreclosure.

When Harris announced in September that she was withdrawing from the
settlement talks - out of her determination that the banks' $20
billion payout in exchange for sweeping immunity from further
litigation was not a good deal for this state - many consumer
advocates were convinced that her resistance was temporary. They knew
the banks would put a few billion more on the table, which they did.
They also knew the White House would turn up the heat to get this
resolved, which it did.

Harris held firm. Instead of caving, she announced last week that she
would team up with Nevada Attorney General Catherine Cortez Masto to
combine their investigations into banking industry practices, from
loan origination to the review of foreclosure documents.

The global settlement so desperately desired by the White House and
the major banks is going to have to wait.

"My point has always been that I took an oath to represent California
. and I am frankly unapologetic in that that is my priority," Harris
said in an interview at her San Francisco office Thursday. "That is
the oath I took. And we all have to play in position. ... That's what
I'm doing."

Her particular concerns with the proposed global settlement went
beyond whether the restitution amounted to "crumbs on the table"
against the scale of hardship resulting from shoddy bank practices.
She also was unconvinced that the investigations to date were
sufficient to assess blame for the predicament faced by millions of
homeowners - and to provide a basis for legislation and regulation to
reduce the chances of a recurrence.

"No one has presented the issue to me in the context of the
re-election - no one," Harris said of the Obama administration's
desire for a settlement. "If anything it has been about settling the
market, resolving the issue, bringing the relief now."

Harris also found herself at odds with the Obama administration in a
very public way when U.S. attorneys signaled in early October that
they were about to crack down on medical marijuana dispensaries. The
feds indicated that they were prepared to shut down clinics, seize
assets and seek criminal prosecutions against what they regarded as
criminal enterprises masquerading as suppliers of medicine.

Harris nodded affirmatively when asked if she was caught off guard by
the sudden change of heart by an administration that once suggested
it would take a hands-off approach to medical marijuana operations
that were in compliance with state law.

"We didn't receive any notice that it was coming," she said.

Her office eventually issued a statement that questioned the federal
government's priorities with limited law-enforcement resources.

"For the feds to come in, who don't agree with the very premise (that
marijuana can be medicine), and then tell us which dispensaries can
be open or not doesn't make sense to me," she said.

She said her office was working with key lawmakers, most notably Sen.
Mark Leno, D-San Francisco, on legislation that would clear up the
"confusion and ambiguities" about medical marijuana regulation. "I
don't see a role for the feds on this issue once it is addressed by
the California Legislature," she said.

Let there be no doubt: Harris remains "hugely supportive" of
President Obama - and, in fact, her office has exerted its influence
on his administration's behalf in various ways, including legal
briefs in support of his health care overhaul. It is equally apparent
that Harris is going to be an independent-minded state attorney
general regardless of whether friend or foe serves in the White House.

Differences of opinion

California Attorney General Kamala Harris has taken issue with the
Obama administration in these two key areas:

Mortgage fraud

Obama administration: The White House has been pushing hard for a
"global settlement" with major banks over their dubious foreclosure
practices. The deal reportedly on the table would require the banks
to pay $25 billion - which could provide homeowners relief in the
form of loan modifications or counseling - in return for an agreement
by state attorneys general that they would not pursue further litigation.

Harris' position: California withdrew from the settlement talks in
September. Harris said the proposed payout was "insufficient to meet
the pain that California had suffered" and she did not want to
release the banks from further liability without more extensive investigation.

AG's action: Harris and Nevada Attorney General Catherine Cortez
Masto announced last week that they would join forces to investigate
possible wrongdoing in banks - including in loan origination,
servicing and securitization.

Medical marijuana

Obama administration: As a candidate, Barack Obama pledged that he
would allow states to chart their own course on the regulation of
marijuana - and shortly after he took office, his Department of
Justice issued guidelines that suggested it would not pursue people
who were complying with state laws. However, in early October, U.S.
attorneys in California signaled an aggressive new campaign to shut
down and prosecute dispensaries on the grounds they were
profit-making criminal enterprises.

Harris' position: The attorney general, while treading carefully, has
made plain that she does not agree with the crackdown. She issued a
statement that noted Californians' overwhelming support for the
"compassionate use of medical marijuana" and expressed her concern
for an "overly broad" federal campaign that would "make it more
difficult for legitimate patients" to obtain doctor-recommended
medicine. She also suggested the feds should "focus their enforcement
efforts on significant traffickers of illegal drugs."

AG's action: Harris' staff has been working on legislation to clear
up some of the inconsistencies and ambiguities in state law.