The Fannie-Freddie Feeding Frenzy
by PubliusAt Real Clear Politics, Big Government contributor Charles C. Johnson has a piece examining all of the Washington insiders, Newt Gingrich included, that are feeding at the Fannie Mae and Freddie Mac trough:
… Gingrich was only passing through a revolving door that other Washington insiders had entered long before him. He left Congress in 1998, the same year that his former chief of staff Arne Christenson became Fannie Mae’s senior vice president for regulatory policy. Christenson left in 2004 after complaining of the “constant outside scrutiny” (read: congressional oversight) to which Fannie Mae was subjected. “People want us to be a passive little company that just buys and sells loans,” he told Washingtonian magazine in August 2002. Fannie aspired to more — a lot more. Born of the New Deal, it morphed into one of the world’s biggest financial service companies, handling some $8 trillion annually.
Its former CEO, Franklin Delano Raines, aspired to a lot more too. Raines was a longtime Democratic Party hand who became Fannie Mae’s vice chairman in 1991. The Harvard-trained Rhodes scholar left to become Bill Clinton’s director of the Office of Management and Budget in 1996 and was touted as a potential running mate to Al Gore in 2000. He returned to Fannie in 1999, becoming “the first black man to head a Fortune 500 company,” according to Ebony magazine. The job was lucrative. He received over $90 million in compensation. But it came with some congressional oversight and that proved too much. Raines left Fannie in 2004 when it became embroiled in an accounting scandal.
Some Republicans had long questioned Fannie Mae’s business practices, which included such perks as exemption from state and local corporate income taxes and a $2.2 billion conditional line of credit with the Treasury. It doesn’t have to pay to register with the SEC the mortgage-backed securities it sells, and given the government guarantee of its debts, it could borrow money well below the market rate, a benefit worth at least $4 billion to Fannie Mae in 1995, according to a Congressional Budget Office analysis.
Those perks came at a price. Both Fannie and Freddie have been very successful at recruiting former politicians and their staffers. A list of their former executives and consultants who, or whose firms, received money from the two mortgage giants reads like a who’s who of Washington elite. Starting with upper management, there’s former White House aide Harold Ickes ($100,000+ from Freddie Mac); former Rep. Tom Downey (D-N.Y., $30,000+ from Freddie Mac); former Rep. Ray McGrath (R-N.Y., $30,000+ from Fannie Mae); former Sen. Alfonse D’Amato (R-N.Y., $240,000 from Freddie Mac); former Deputy Attorney General Jamie Gorelick ($26.4 million from 1997-2003 and $779,625 in bonuses from Fannie Mae); former Rep. Vin Weber (R-Minn., $360,000 from Freddie Mac); former Rep. Susan Molinari (R-N.Y., $300,000 from Fannie Mae); GOP operative Donald Fierce ($30,000+ from Fannie Mae); Democratic political strategist Steve Elmendorf ($30,000+ from Fannie Mae); former Secretary of Commerce and current Obama chief of staff William Daley ($30,000+ yearly from Fannie Mae); Michelle Engler, the wife of former Michigan Gov. John Engler ($30,000+ from Freddie Mac); Chicago Mayor Rahm Emanuel, a former Democratic congressman and Obama chief of staff ($320,000+ from Freddie Mac).
Former Republican Sen. Bob Bennett of Utah received the most campaign cash from Fannie Mae and Freddie Mac of any elected Republican ($107,999). Tim Stewart, his legislative assistant from 1999-2006, went to work for Fannie Mae’s Utah office. In 2006, Bennett’s chief of staff, Chip Yost, left to become a lobbyist – for Fannie Mae. Indeed, Bennett’s own son was hired by Fannie Mae. Only three politicians received more money than Bennett: Banking Committee Chairman Chris Dodd, presidential candidate Sen. Barack Obama, and former presidential candidate Sen. John Kerry. In just four short years, from 2004 to 2008, Fannie Mae lobbyists gave Barack Obama $123,000, according to the FEC.
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75 Comments
Like hogs, at a trough.
Fannie and Freddie were the free choice "food" of politicians of all stripes.
The only difference was, the food was cash, instead of slop.
"He returned to Fannie in 1999, becoming “the first black man to head a Fortune 500 company,” according to Ebony magazine. The job was lucrative. He received over $90 million in compensation. But it came with some congressional oversight and that proved too much." (Referring to Franklin Raines).
The thing that jumps out and strikes me, is what did Raines do once he took the reins? He gutted the Company. The same thing that Obama is doing to our Country, he is gutting it. I see a pattern here.
Who are they fooling…..
It's all about the power elite doing their best to fool enough of us just long enough and grab their share before getting caught. The problem is, we are beginning to wake up….. the question will be is it in time—?
If you look at the list of people who've gone to F&F, you'll notice that both D's and R's are on the list. That would seem to explain the lack of desire to close down these abominations.
Don't they know it's better to be bought out by Goldman, Citi, JP Morgan Chase, BOA ect? Because then at least the right will ignore it.
No matter how many times we go over this the role of FNMA and FHLMC remains the same. They became undercapitalized, through crony negotiation, and then began buying subprime in '06 and '07. That's it, in a nut shell. If they stuck to the conforming loan model and didn't find an ear to reduce loan quality, as the private banks did right along side them, the recession and bubble wouldn't have been nearly so bad.
It's time to drop the single narrative mentality.
Bullshlt.
As usual, you are wrong.
They were buying Sub-prime paper in 1999 and 2000, bundling it, and selling it across the pond.
People seem to forget that it was the Clinton DOJ that told banks to make the sub-prime loans or ELSE!
They need to stop manipulating our financial world. That would be a good start back to solvency. Oh, and we need TERM LIMITS now.
Dead on target. Anyone thinking this was a "2000's" issue needs to read more than Huffing with Arianna. Barney starts setting the stage in `92 and by `96 is well on his way to enabling the whole mess.
Fannie and Freddie have been used as an Elite Ruling Class Blue-blood's ATM… to our pockets Cha-CHINGGG!!!
.
"……..Some Republicans had long questioned Fannie Mae’s business practices,…."
To see how they could get on the gravy train, which is why,……….
that impotent George Bush allowed this cancer to grow.
Which is why the Libs, Dems, MSM and RINOS all outed,…..
Sarah Palin because, unlike Romney or Obama,…….
she was going to clean this mess up.
Which is why Ron Paul is being propped up, in order,………
to put a loony spin on being an….. "outsider".
Yeah, just wait until they butcher it…..
Hey, elected officials @thetrough! There's a country over here going to hell in a hand basket. C'mon, that's enough. Don't you have even one iota of duty to country?
How does it count as a "Fortune 500" company, when it is essentially a government agency?
Another name for it; looting. It's why they don't want us to have guns.
Using that logic, then Ron Paul should be the next President.
When the whole shltiree collapses, they can point a finger and blame it on the Crazy guy…….
I reckon that is why Willie Horton robbed banks.
Do the words, "Claw Back!" mean anything here…???
Well it's clearly on par with Congressional insider trading. They are above all of US. We need to take our country back. Everything they get away with is our fault. Time to vote for everyday Americans. We must ignore the false narrative regarding experience. Vet the candidates and choose wisely.
That is the million dollar question…
So what is your solution?
Stay Classy Sack
I have always asked the same question.
GSE's should not be classified the same way that Private or Publicly Traded Corporations are. It is comparing Apples to horseshlt.
Newt is proven failure. It is weird there are still people who consider him fitted for president.
Inconvenient truth to the left…..
That statement, John G, applies to "Fannie and Freddie" just as much as it does "Fast and Furious".
A profound statement you made there, carrying merit far beyond just the mortgage fiasco created by government involvement where it has no Constitutional Authority to be. Well done, Sir.
How so?
According to the right, the only cases of crony capitalism are GE and fannie/freddie.
Completely ignoring wall st's purchase of both parties and how we'll never have any real financial reform because of it.
Forget? I was thinking more along the lines of DENY!
No.
Your statement is erroneous and incorrect.
Everyone that I know, looks at corruption straight across the board.
I'll bet you chose to ignore Peter Schweizers book about the insider trading scam, and how the lead role was played by Spencer Bacchus, a Republican.
Selective memory is not a commendable trait.
I submit to you that the Founders and Framers DID stop it, by limiting the republican form of government to only having authority over commerce regarding, states (their governments), Indian tribes and foreign powers.
Our Forefathers knew that in order for Liberty to remain, the private contract had to be sacrosanct, it had to be protected both on the side of two parties entering into them willingly with each other and on the side of being binding. The Judiciary was set up to specifically handle complaints that arose when one party claimed the other did not hold up their end of the contract. The Judiciary would not have been empowered with this duty were the "commerce clause" meant to control all contracting via legislation.
Term limits? Well, we do have that authority now, we should exercise it rather than submit that Liberty to government as well. What we have to do is finally hold government to the crystal clear Boundaries that EXIST right there on the parchments called the Constitution and the Declaration of Independence!
Fitted?
Is you a shoe salzman?
You are absolutely correct. Our problem is that more than 50% of our population are apathetic morons who are sucked in by the MSM and their lies. Good hair and lots of patronage buy elections, which is why we need term limits as an enforcible law.
It's called fascism, though no one wants to admit it. Kinda makes you wonder how many secret I.G. Farbens we have going on in this country.
Cowboy got you hangin', leftie. He now owns your azz. You are such a lyin' SOS it's incredible that you think anyone here takes you seriously. Soros must be proud.
And correct me if I am wrong. Wasn't it Janet the "NAZI" Reno who was threatening them?
And Nobama is?
Forget or deny, either way, it's democrats denying reality for their own needs.
YOU ARE CORRECT, SIR!
Clinton added an accelerant but credit Barney with stacking all that wood in the first place. Without him, none of it happens as it did.
In these parts, people can choose which power company provides them electricity. This is true unless of course there is a municipal power generation entity in place. Such is the case in Springfield Illinois. Power generation and distribution is a government monopoly where the people have zero choice but to purchase their electricity from but one supplier.
Folks should think carefully about the LIE that Barry and others tell when they speak of 'INVESTING" tax dollars. Investing is done in the private sector where choice still remains (though hamstrung by a creeping government that seeks monopolies like the ones it already operates). Tax dollars are snatched and spent – nothing more.
The question really is, how does government get away with monopolies? Folks have to look to SlaughterHouse cases decision out of the Supreme Court to understand. When they do, and when hey decide to educate themselves as to what has truly happened, they will finally see that it indeed does come down to rights being privileges, as opposed to them being different things, and an activist Supreme Court legislating from the bench – going so far as to Amend the Constitution itself from the Bench. We really do have 9 robed kings that rule by decision, absent the accountability of the vote and absent any other kind of accountability whatsoever.
We are in so very much more trouble than most realize.
Indeed.
It is time to put an end to government run businesses. There is more than enough proof that government can't run a business. Whether it's Fannie And Freddie, or GM they are all failures. Because they get government funds they don't worry about losses. When there is NO risk of failure fraud and waste become acceptable. There are many clear ethical violations going on in these companies, but nothing is done about it. How is it that a government funded company like Fannie can use your tax dollars to contribute to a political campaign, or higher people like Newt for advise to the tune of millions of dollars? This IS NOT the way it should work. If you are funded with tax dollars you should not be allowed to spend that money on anything other than the business. The fact that they have given huge money in contributions, and then asked for more money is proof they have no ethics. The fact that none of the failed leaders have gone to jail after extorting hundreds of millions of dollars is proof this is all an inside game. These guys make Solyndra look like a good deal, yet nothing is being done to stop the ongoing fraud.
Wake up America this type of operation is not constitutional, and clearly not being run for the good of the people. It's time to get government out of business. If it doesn't work in the free markets then it should not be in business. There is no such thing as to big to fail. If you can't make a profit then you go out of business, that is how capitalism works. Anything else is socialism which ALWAYS fails! End the Fed, Fannie and Freddie, GM, and all other non audited government funded businesses. If we do this our debt will be manageable, and if we don't then we will go BROKE. We MUST make this an issue for our candidates. We need someone to clean up this mess NOW before it's to late.
That is one list of crooked Who's Who. The government should never be in the mortgage business. Or the auto business. Or the internet business…OR ANY BUSINESS.
Clearly, Fannie Mae and Freddie Mac need to be broken up, and divested. Government sponsored entities should never compete with private business. The U.S. government need to get out of the business of being a business.
Cowboy-
The only part you got wrong was the "They"……..Lehman Brothers, if we're talking about Norway. http://tinyurl.com/845tjs7
Now, come back and tell us how it was the 1977 CRA law, like Daddy told you.
I do financial work for the street, at a firm that consciously decided, 4 years ago, that the structured products offered by the investment houses weren't right. It was a free-market decision that served us very well. What do you do, Cowboy. Heard sheep? If you had some guts, you'd start handling the truth and realize how a minimal call for reform has morphed into "OWS", and this perception that Marxism is right around the corner. All you are doing is perpetuating it.
Obama thinks that if he makes everything fail then we will have no choice but to accept government control. Why would we want the same government that caused the failure to take control? The people like us who understand these facts would have no choice but civil war. This IS the reason they are pushing more gun controls. That day is coming very soon, unless we can change coarse dramatically!
Don't listen to CL, the neo-con, who's not doing the math. Paul is a threat to the establishment, like no other. On fiscal conservatism, which does matter to a few of us, he and Huntsman will split NH.
This is beyond Banana Republic behavior. I think the USA governement is as corrupt as Russia, Greece, China, you name it. Maybe more corrupt.
Obama is more like fetid, as opposed to fitted…..
To what?
crony capitalism?
Amend the constitution so we can overturn citizens united case which calls corporations people too and allows unlimited amounts of money to flood into campaigns thus buying our representatives.
Not a full solution but a start.
I didn't read the book but saw the 60 minutes piece.
I don't know who peter is, but he's no malkin, rush, hannity right wing nut who blames everything on one party then.
When I refer to the right I refer to those who are brainwashed to believe, Obama is a communist, Fannie and freddie NOT wall st wrecked the economy, corporations are people too, GE is the only corp that has ever had access to the white house. the Ignorant list I call it.
Nooooooooo!!!
a collective group of inferior minded people don't take me seriously?!?!?!?!
I've seen your comments. They wreak of malkin and levin regurgitation. I KNOW nobody takes you seriously. the brainwashed children here do I'm sure. You all make adorable company.
Some day you'll have an original thought. I know it.
Why amend the constitution? Could not the government just use the general welfare clause?
Stay Classy Sack
Also how does it count as a Fortune 500 company when it requires 15 to 30 billion a month bail outs.
And notice nobody complains about Raines being and evil greedy ceo. If ceos are not allowed to make money then most certainly a ceo of a gov run monopoly should not be able to make $90 mil in compensation.
Why is an amendment needed?
Because the supreme court already over turned the law which congress passed. The supreme court is wrong, the founders never intended for our elections to be controlled by the wealthiest interests.
If ya read CL's take carefully,……
you will see that it is in no way,…
an endorsement of the Ron Paul, or maybe,……….
I'm not reading your take properly.
The bottom line is, I think we are all on the same page,….
when it comes to the old goat.
.
Yeah with the federal budget deficit over 1,300,000,000,000 I don't know why anyone would think the speaker of the house who gave us a balanced federal budget with a spend happy lefty in the oval office is the right guy for the job.
What are they thinking?
So if I think the supreme court is wrong in its ruling for Roe V Wade because the Founders never intended the control of abortion to be in the Federal Governments hands we need to have an amendment passed?
How do you know the Supreme court is wrong in their ruling? How do you know what the Founding Fathers intended? Do you know if there were corporation in the Founders day? Who created the laws that allowed corporation to come into existence?
What is the role that the Supreme Court is to play according to the Constitution?
Here is an idea, why let the states set who can and can not contribute to the election and primaries inside their states? This would put additional requirements on the candidates to show where they are receiving donation.
Why not eliminate the pacs and super pacs altogether? I thought McCain Finegold was to reform the elections?
Stay Classy Sack
Freddie Mac and Fanny Mae are nothing more than gigantic taxpayer money pits from which a select few, elitist, parasitic grubs feast. If they can not survive on their own without subsidy, they should be allowed to fail since they are unquestionably inept, incompetent, and self serving.
Not liking RP on defense, and not liking RP fiscally are different things. That’s my message. None of us put him number one. I meant he is a viable, growing, threat. Not electable, but real, when it comes to attracting people who hyper-focus on cutting spending, without consequence. He started with "cutting 1.5 trillion" and settled for "cutting 1.0 trillion" in the first year. Either way, since its borrowing he'd likely stop, you have that much money instantly sucked out of the economy. I'm no fan of public sector spending, but a -10% GDP recession is probably a bad way to start a presidency.
No. It would be a miricle if some around here understood what happens when CEO's and finance types are more incentivised by quarterly results, or yearly bonuses, versus the old days of vesting in a partnership. Then, at least when you trashed your company, before hitting the road, you also trashed your own wealth.
Quants put a dress on risk and sold it. These people make me feel like I'm on a crusade. In some ways, I am. As long as we have an economy where people get paid to leave fire behind, I won't change my tune. I'll just keep watching the next one being built.
""So if I think the supreme court is wrong in its ruling for Roe V Wade …. have an amendment passed"""
Yes, the system is set up so that the constitution can be amended if ratified by the states.
""How do you know the Supreme court is wrong in their ruling?""
Because in a republic the people should possess the power, not separate profit driven, international entities.
""How do you know what the Founding Fathers intended?""
Reading Jefferson, Madison, adams own writings it's clear they didn't want a plutocracy
""Do you know if there were corporation in the Founders day""
Yes, banks too. None as wealthy and powerful as the ones today.
""Here is an idea, why let the states set who can and can not contribute to the election and primaries inside their states?""
Yep, 50 different campaign finance laws would make things easier…Probably not. federal candidates. federal laws.
"""Why not eliminate the pacs and super pacs altogether? I thought McCain Finegold was to reform the elections""
Thats why I said it wasn't perfect, just a start. Their were loopholes that need closing.
Good one.
While you're overturning the citizens united case, why not add in unions with the corporations?
BTW, You do not need an amendment to the Constitution, you need to write the law to reclassify corporations for all legal actions since corporations like unions are legal entities. Also there is a lot of case law that also needs to be reworked if you want to reclassify corporations as entities instead of "people".
Sorry, I have to ask, are you in a vacuum of some kind?
"When there is NO risk of failure fraud and waste become acceptable. There are many clear ethical violations going on in these companies, but nothing is done about it…………….The fact that they have given huge money in contributions, and then asked for more money is proof they have no ethics…There is no such thing as to big to fail"
Sure there is. Haven't you heard of Romney, Cain, Gingrich and Obama's full throated support of TARP? Some Paul supporters need to reconcile that so much of what they find ugly about Fannie Mae, is also in the private sector. Paulson didn't come to the Congress looking for a 700 billion dollar "bazoka" because he needed it for Fannie Mae. At least Huntsman stands up and recognizes that Dodd-Frank's "TBTF" list did nothing but show which private banks still have big brother. No illusions, there. Only he sees the wisdom of prevention, over Paul's chaos.
Actually the Supreme Court over turned the legislation based on current legal definition of corporations, unions, etc. The legislation did not take into account that legal definition which basically treats these entities as an individual. Change the legal definition of these legal entities then you can pass legislation accordingly.
Forget, deny, they're all symptoms of CRIS.
Why would anyone want the guy who brought us the contract with America?
Why would we want the guy who pushed HARD and got republicans the house and senate in 95 for the first time since 1955?
Who would want the guy who was censured for pushing free market economics and the opportunity society?
What idiots they must be to swallow the negatives on newt!
Yep, they did read it by the letter. I don't agree with over turning the law, but you're right, the definition has to change or an amendment added.
If Ron Paul isn't elected, expect more of the same.
Mis-Fortune 500 company perhaps.
I'm with you all the way! Our wise founders left us every tool to deal with traitors like Obama/Holder and we are not using those laws. They need to be prosecuted.
Yes I agree with Term Limits vis a vie voting them out. Why do these corrupt-o-crats have Pension Plans? Strike those.
Yes, It IS time to prosecute them using our great American Laws!
Agreed. The sickening Pension Plans for career politicians need to be eliminated. It's absurd. It only encourages quid-quo-pro collusion and corruption. They need to serve their time and go back to their day job, as our founders designed this great Country.
We need to clean out this infested Country. The Govt is corrupt,and the importation of enemies of America needs to be reversed with deportation. Any Pres Candidate who will not deport is not fit for office.
Obama flew in a ton of Middle Easterners in 2009. He planted them in a couple of States on our Northern border (using our tax money of course) That is lesson 101 in how to 'Fundamentally Transform America' …..into complete destruction.
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