home-grown music to help celebrate that? i'm with al jazeera. and a reminder you can keep up to date with all the news on our website, there it is on the screen, the address is al jazeera, that is al jazeera.com. justice for sale, i'll take you inside the world of big money, on the elections of who presides in your courtroom room. and a hot houseing market threatened by the reality of america's trillion debt burden secret tapes reveal financial regulators going easy on the banks they are supposed to be getting tough with. you'll hear for yourself. i'm ali velshi, this is "real money".

this is "real money", you are the most important part of the show. tweet me or hit me up at facebook. next time you pass your local court house look closely. see a for sale sign. it should come as no surprise that $1.2 billion to date has been raised with the intention of influencing the midterm elections. did you know the big money is spreading to elections that reach beyond this election of your congressman, and instead focus on who is in charge of your courtrooms? outside groups dramatically increased spending to influence which judges sit on the bench at the highest levels in each state. here is a look at justice for sale. it was an emfating ruling reverberating outside the heart land. iowa supreme court voted unanimously in 2009 to allow same sex couples to marry. a year later, when three of the

supreme court justices came up for a standard retention election, that's a yes, no vote to keep a judge seated on the court, socially conservative groups like the national organization for marriage made the dissatisfaction with the decision known. >> if they redefine marriage, what will they do other rights. >> nearly a million in out of state spending poured in. all three judges lost the election and judges. >> 87% of judges stand for election during their career, turning them into fund-raisers, and they are having to raise money from the people appearing before them in court. the question is weather voters can be confident that justice is not far sale. >> 38 states conduct elections, either through contested recesses between two candidates or retention votes the remaining

states use merit selections. since 2000, upwards of two dozen states saw judicial spending smashed and the last election cycle totals reached 56 million, half coming from outside groups. as a result, it leads to the problem of judges around the country having to look over their shoulder, saying "well, if i make a decision, and it despleases people outside my state with big money, i may have to think twice about the decision." spending in the election is sometimes driven by social issues like gay marriage. more often business concerns dominate. organizations like the chamber of commerce spent big, hoping the balance of power will lead to industry of this friendly decisions from issues of employer corrections and obama care. 2.2 million was spent in north

carolina, and 1.3 million entered of tennessee race. >> liberals control the state supreme court. while judicial election spending may pale in comparison to the hundreds of millions poured into congressional elections, experts warn a little money thrown at the courts goes a long way. >> so many years ago, someone joked that it's cheaper to buy a state court than it is to buy a legislature. voter turn out is low. what it means is an interest group can decide to pour in money, turn on the base to have a shot at tipping elections. >> a poll found nine in 10 americans think campaign cash is effecting decisions. surveys taken of judges suggest half of them agree. >> if we get to the point where people think judges are

politicians are just robes, than it bends to the will of someone with electoral power, has been turned on its head. >> reshaping state supreme courts is a priority. they plan to spend $5 million on judicial races in places like north carolina, where half the ballot. >> as reported over the past few weeks, dark money dominated political spending and judicial elections are different. for every attack add accusing a judge of being soft, there's a group behind it. alicia brep jp is from a -- brennan is from a group saying getting money out of judicial races is crucial. >> special interest groups are recognising that with a small investment you have the opportunity to change the legal landscape of a state.

that's what we have seen, business interests on one side, plaintiffs, trial lawyers on the other side. unions pouring money into the race, trying to impact who is on the bftenl and the decisions that -- bench, and decisions that courts are making. election. >> up or down retention. >> what is supposed to happen. what is the point. on what basis would i, as a citizens, be able to make a decision as to whether a judge run? >> centringly judicial elections were a reform measure. people were concerned that judges were elected. there wasn't public accountability. in the 19th century the state introduced judicial elections, in the 20th century, further reforms, up and down retention elections as part of the system.

money is a bigger force in the races, is that the accountability mechanism is breaking down and judges are looking over their shoulder. when i have a case before a judge, i want to be confident that they'll decide the case based on the law, not worried about who will give campaign contributions or who the result of an attack ad will be. >> when you scratch the surface, you don't have to look too far before you see "look, it's karl this. >> in the '90s, in texas and alabama, karl rove pushed the courts in a conservative direction, bringing a republican takeover of the courts. in the '90s. in 2000 there was a greater expansion, tort wars became the

court wars, and more and more states were politicized, and had different special interest groups putting money into them. >> he's innovative, if nothing else. a lot of this is supported by business interests, conservative business interests. the attack ads don't generally speak about the interests. they talk about being soft on crime. once a certain amount of money is flowing into a race, judges save their money, being tough on crime. >> that's right. there's academic studies suggesting that judges change their behaviour. in election years, if you look at the sentencing decisions. they tend to be harder on crime. judges raised the alarm about the pressures that these attack adds and fundraising are putting on them. most judge don't want to play the role. they feel they have no choice. >> there was a case in west

virginia where the c ex o paid a lot of money for the election of a judge it was a deciding vote in a case brought against them. >> it went all the way to the u.s. supreme court. they said the judge should have stepped aside. it's been five years since the supreme court decision. states have not changed their rules in terms of when judges have to step aside from cases. those rules have not kept up with the flood of money that they have been seeing in the state elections. >> a remarkable story. alicia brennan, council for the brennan center for justice. we'll do more on this story. secret recording - the new york fed refused to stand up to goldman sachs, and the woman that made the recording has been forward. now there are calls for an investigation. keep it up,

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in 2008 the fed and its new york branch both failed to catch scenes of a meltdown that would trickle the economy. in 2009 the new york fed commissioned a study to call out and correct weaknesses. among the findings fed examiners were too cosy with those they were to police. tough examiners were brought in. as reported, segarra's time at the fed did not go well. alarmed by the lax supervision of banks like goldman she recorded about 46 hours of meetings and conversations with her colleagues. segarra was fired after 7 months. jake bernstein and his partners from "this american life", are making the secret tapes public.

i spoke and asked him what drove segarra to take the action. >> the report talked about in the owing was that the problem -- opening was that the problem was cultural, the biggest obstacle preventing them doing their job, and i way to fix it was to hire outspoken examiners. they higher a bump, one is segarra, and she basically does this and gets in trouble. >> tell me what drove segarra to record conversations. >> she encountered stuff where there was push back. people would question what she heard in meetings. a supervisor told her what was valued in the fed was perceptions more than reality, and she questioned morality.

>> i want to play an excerpt from a recording. segarra is in a meeting with new york fed chief of staff michael silver discussing a potential transaction with a bank that many would know. listen to this. here is the transaction, the fed find troubling, calling it shady. there's a little bit of pussy footing around it.

this was as he alluded to. he thinks it's illegal, it's shady. they are not certain what to do about it. they ask questions of goldman executives. they decide that there's nothing they can do about it. it becomes an illustration for segarra about how they look at supervision of the big banks and how afraid they are. >> she complained about the deference that she thought the bangs god from the fed, and that got her in a little hot water. let me play another exert, between her and her supervisor jonathan kemp.

>> jonathan kim was her supervisor. segarra was brought in, you point out, to fight the deference. >> this is the remarkable thing. in the report from 2009 the consultant says one of the big problems at the fed is consensus, but they use it to water down findings and to sort bank. >> everyone around the room says they have to come down. where does the deference come from, are they people looking for jobs. >> they are a number of people that go from the fed to the banks, it's human nature of the they are stationed inside the banks. they see these people, and it's easier to get information from the bangers by being friendly and asking them politely. that slide into deference. >> did you get a reply?

>> we sent 13 pages of questions and we got a 2-page response. they said they fired segarra for performance reasons, and they stand by that. do we know she was not fired for performance reasons. >> we don't know. there's a meeting on tape, where they demand they change their findings about goldman sachs. she refuses and is fired the next week. >> great work as always. a journalist. coming up next, the ripple effects of crushing student connect. the houseing market is feeling the pain. i'll explain and "real money" continues. >> consider this: the news of the day plus so much more. >> we begin with the growing controversy. >> answers to the questions no

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>> we do have breaking news this morning... >> start your day with in depth coverage from around the world. first hand reporting from across the country and real news keeping you up to date. the big stories of the day, from around the world... >> these people need help, this is were the worst of the attack took place... >> and throughout the morning, get a global perspective on the news... >> the life of doha... >> this is the international news hour... >> an informed look on the night's events, a smarter start to your day. mornings on al jazeera america there are hopes that an improving job market will mean more first-time home buyers will come in and face investors backing away from real estate. here is a reason to worry first-time home buyers may not be able to pick up the slackment the average american with debt owes $33,000. that may cost the u.s. economy more than $80 billion.

>> 414,000 homes will go unsold because would-be buyers are so saddled with student debt they cannot afford to buy. that's the conclusion of an analysis by john byrne real estate consulting, $83 billion in loss home sales. beth is an economist with the brookings institution. >> there's a correlation with student lone debt and the ability of children houses. >> reporter: in change for strong legal protection lenders cannot approve loans if the borrowers anticipated monthly debt is more than 43% of income. take the case of a household earning $83,000 with rent and car payments. a student debt free household with 3.5% down qualifies for $250,000, 30-year mortgage at

4.5% interest. tho in a debt of $250 or more. the bank will deny the application as the total mondayy debt is 43% greater than its income. the overall effect is complicated. the affect of making the payments is missing. while they have the extra bills, they have higher earnings, going hand and hand with that. >> according to the studies, every month it lowers a limit by 44,000. that cree ath a catch 22, as more people stake on student debt to gain the circles needed. they may be reducing the likelihood of buying a home. >> nearly 6 million households headed by someone 42 or younger

paid student debts. up by 2.2 million. i spoke to christian, an exist with mooedies anna lit ecks, and he did analysis on the impact of student debt. and says the number of 400,000 unsold homes cited in the study is too high. . i would say that it's difficult to isolate. there's so many moving parts in the houseing market between tight mortgage credit, income growth that is stagnant, and a job market that needs to grow. it's difficult to assign a specific number to any individual part of this. student debt has an impact. impact. >> we hear the number, the $1 trillion, this is a thing with averages and numbers don't help you. we need to figure out what the graduating student had on hand,

what the debt to income ratio was, whether they would qualify and how it affects them. this is something difficult to impose on the situation. >> that's right. is the question that student debt is too high or income too low? i fall in the camp that income growth is lacking. wage growth is stagnant and that scoops the market from accelerating into the market. >> is there... >> we need incoming to grow and a broad job base. >> do mortgages need to change? we heard about 43%, not having more of your debt averaging 43%. is that a problem. is there a way to encourage students to buy houses are are way? >> mortgage credit is tight.

banks, gscs are worried about a mortgage crisis. conditions have to thaw, and we need a loosening of underwriting to attract buyers into the market. it's about the job market, incomes. we need the job market coming back. income growth - that will houseing. >> what role, in your mind, do students - when i say students, people out of school in the last 10 years, is that a segment of the home-buying population that we need to thing about. we spoke to home buyers, who say they need a different product the the product available now is out of the range of first-time buyer. >> there's some truth to that. on the mortgage side of things, a little flexility in the product, understanding where the

buyers are coming from, and there's a lot of differences or changes in taste. we'll meet new product in terms of the houses that they want to buy. it will be more multifamily and condos. a lot of things are changing in the market. that's why it's difficult to assign a specific number to the parts. >> chris, a senior director. thank you for joining us. >> coming up this week, something special is in the air in manhattan. i'll look at the millions building owners are getting for selling air rights. it's rarified air in new york. "real money" airs week nights 7:00pm eastern, 4:00 pm pacific. that's our show for today. i'm ali velshi, thank you for joining us.

♪ >> announcer: this is al jazeera. ♪ welcome to the news hour, i'm darren jordan in the news center in doha and these are top stories, cutting al-shabab supply roots and take one of the strongholds. isil fighters close in on the syrian border town. wins the first round of brazil presidential election but fails to secure an out right majority. the bronze of nigeria and how the city is tryingo