mae and freddie mac -
the best politicians money can buy?
It is totally false
to claim that the banking collapse caused by Fannie
Mae and its relations was not foreseen. President
George Bush, Senator McCain, and Fed. bosses Greenspan
and Benanke all fought strenuously to head off
the shipwreck, while the Democrat Party opposed
them at every step.
In 1996, Fannie Mae expanded the Fannie Mae Foundation
enormously, turning it into a slush fund for left-wing causes and
left-wing politicians. The Foundation has already given away over
½ billion dollars, promoting left-wing causes and buying influence.
Here are some of the top beneficiaries among politicians:
“Our data goes back to 1989, where applicable. In Obama's
case, our data includes his 2004 campaign for the Senate, his tenure
in the Senate and his 2008 presidential fundraising--in other words,
all contributions to Obama from Fannie Mae and Freddie Mac associated
with his entire congressional career.”
has collected his winnings over a shorter time than most. There is
more data and various interesting notes at the opensecrets.org link.
Various Democrats were involved in sweetheart deals
on large mortgages.
Obama received heavy assistance with his house
purchase from convicted felon Rezko.
Obama also received a $1.32 million loan from Northern Trust at a
special, lowered rate.
Democrat senator Christopher Dodd, chairman of
the Banking Committee, gained special rates from Countrywide.
Democrat Kent Conrad, chairman of the Budget Committee
and member of the Finance Committee, was another beneficiary of Countrywide.
James A. Johnson was forced to
resign as head of Obama’s Vice-Presidential Search Committee
when his sweetheart deal with Countrywide was exposed.
Strangely, Obama still sails on, ludicrously claiming
to be the candidate to bring change to Washington. There were more
of these loans made to relevant politicians by Countrywide, who as
a group became known as “Friends of Angelo” [Angelo Mozilo].
It is illegal for Federal employees to receive
gifts due to their official positions. This includes loan terms not
usually available to the general public.
Fannie Mae is the Democrat’s Enron, - Dick
Fannie Mae have been spending huge amounts of money
promoting themselves and influence-peddling. The sewer includes false
accounting and other sharp practice, aimed at enriching the actors
and pushing left-wing causes.
“Frank Raines, Fannie Mae’s CEO [1999 - December 2004]
, collected $90 million in bonuses and salary.
Jamie Gorelick, its vice chair [1997-2003], “[...] former
Clinton administration assistant attorney general (and Janet Reno’s
designated handler), made $25 million in salaries and bonuses after
becoming vice chairman at Fannie Mae!” [Outrage,
“Jim Johnson, its former CEO [1991-1998],
got $2.9 million
“And the Democrats rallied round. "This hearing is about
the political lynching of Franklin Raines," said Congressman
William Lacy Clay (D-MO), Congressman Barney Frank (D-MA) agreed:
"I see nothing here that suggests that safety and soundness
are an issue." ” [Outrage,
See Barney Frank in the video below of the
[from position 4:51/8:37]
6 April 2005
As I concluded last year, the GSEs need a regulator with authority
on a par with banking regulators, with a free hand to set appropriate
capital standards, and with a clear and credible process sanctioned
by the Congress for placing a GSE in receivership, where the conditions
under which debt holders take losses are made clear. However, if
legislation takes only these actions and does not limit GSE portfolios,
we run the risk of solidifying investors' perceptions that the GSEs
are instruments of the government and that their debt is equivalent
to government debt. The GSEs will have increased facility to continue
to grow faster than the overall home-mortgage market; indeed since
their portfolios are not constrained, by law, to exclusively home
mortgages, GSEs can grow virtually without limit. Without restrictions
on the size of GSE balance sheets, we put at risk our ability to
preserve safe and sound financial markets in the United States,
a key ingredient of support for homeownership.”
May, 2006 - John McCain:
“I join as a cosponsor of the Federal Housing Enterprise Regulatory
Reform Act of 2005, S. 190, to underscore my support for quick passage
of GSE regulatory reform legislation. If Congress does not act,
American taxpayers will continue to be exposed to the enormous risk
that Fannie Mae and Freddie Mac pose to the housing market, the
overall financial system, and the economy as a whole.
“I urge my colleagues to support swift action on this GSE
reform legislation.” 
Clinton desultorily admitting the responsibility
of the Democrats for the mess:
25 September 2008 - Bill Clinton:
“I think the responsibility the Democrats have may rest more
in resisting any efforts by Republicans in the Congress or by me,
when I was President, to put some standards and tighten up a little
Fannie Mae and Freddie Mac.” [Quoted from “Bill Clinton
on the Economic Crisis” TV interview, ABC
“Among the companies' past advocates are Mr. McCain's campaign
manager, Rick Davis, a longtime lobbyist; Mr. McCain's confidant
and adviser Charlie Black, whose firm worked for Freddie Mac for
several years ending in 2005, and the deputy campaign finance chairman,
Wayne L. Berman, a vice president for Ogilvy Worldwide and a former
Fannie Mae lobbyist. Mr. Davis previously was head of the Homeownership
Alliance, a coalition of banks and housing industry interests led
by Fannie and Freddie to stave off regulations.
“The group was formed to counter another organization, FM
Watch, an alliance of financial institutions and lobbying associations
that wanted to even the playing field against Fannie Mae and Freddie
Mac, by challenging the implicit government guarantee that allowed
the two firms to borrow funds at lower interest rates.
“Six members of the Republican lobbying firm Fierce Isakowitz
& Blalock, all Fannie Mae lobbyists, have given Mr. McCain $13,250,
“ The New York investor Geoffrey T. Boisi, a member of Freddie
Mac's board, contributed more than $70,000 to Mr. McCain and Republican
Party committees working for his election. Both he and Richard F.
Hohlt, a Fannie Mae lobbyist, are among the McCain "bundlers"
who have raised $100,000 to $250,000 from others, according to the
campaign Web site.” [Quoted from nytimes.com]
“Davis, fresh from running McCain's 2000 presidential campaign,
was brought in and remained president of The Homeownership Alliance
until 2005, when it was wound up as the companies looked to save
costs, former executives said.
“Bounds noted that during that time, McCain backed legislation
which increased oversight over the companies' accounts and executive
pay packets. But it did nothing to deal with their unusual status
as government-supported private firms.” [Quoted from timesonline.typepad.com]
Note that all Republicans, at this time, voted for
regulation of Fannie Mae and Freddie Mac, while Democrats all voted
against such regulation.
“Obama's outspoken criticism of Mozilo's exceptionally high
compensation is again under attack as hypocritical in view of the
preferential loans to Raines and Johnson and the degree to which
Countrywide's failed sub-prime loans contributed to the government
takeover of Fannie Mae and Freddie Mac and last week's mortgage-related
crisis on Wall Street.”
“WND also reported Raines and two other top Fannie Mae executives
agreed to pay $24.7 million, including a $2 million fine, to settle
a civil lawsuit filed in December 2006 that accused them of manipulating
Fannie Mae earnings, allowing executives to pocket hundreds of millions
“As part of the settlement, Raines was also forced to give
up Fannie Mae stock options valued at $15.6 million
“Johnson was appointed to head Obama's vice-presidential
selection committee, but he was forced to step down when a controversy
surfaced in June concerning alleged millions in questionable real
estate loans he had received on favorable terms from Countrywide.
“A Washington Post profile published July 17 said Raines
was then playing a role advising the Obama presidential campaign
on mortgage and housing policy.”
This stuff gets interesting.
One side is trimming to the edge of lying.
In an attempt to confuse issues, the Left is trying
to make some equivalence between the Fannie Mae Foundation political
slush funding scam and the fact that there are a few ‘lobbyists’
working among the thousands on the McCain campaign.
Lobbyists are merely PR types who work as hired
guns. That is, they represent a company one week, a politician another
and an educational institute next, rather in the manner of lawyers
or fund raisers. There is no logical connection between a lawyer hired
by more than one organisation, and an organisation singlemindedly
attempting to buy political infuence.
In my view, this must be separate from money to
candidates designed to effect political pull or legislation.
I can see a case for paying money into an account
for a campaign. Perhaps it should then be legally required that the
candidate recuses from associated law-making.
It gets even more difficult as in a case
like the above, where any money flowing to McCain seems not to have
influenced his approach to legislation.
It is estimated the
FMS [Financial Management
Service] receives about $11 billion subsidies each
year from government. They pay no taxes and receive
beneficial rates from the Fed. They have less stringent
capital requirements. They do not have to file with
the SEC [Securities and Exchange Commission]. They
have been falsifying their accounts.
Five of the thirteen board members are government
Twenty-one most senior executives
received $245 million over a five-year period [Fortune
what crisis? is bush seeking to buy up junk loans at knock down prices?
“Second, as markets have lost confidence in mortgage-backed
securities, their prices have dropped sharply. Yet the value of
many of these assets will likely be higher than their current price,
because the vast majority of Americans will ultimately pay off their
mortgages. The government is the one institution with the patience
and resources to buy these assets at their current low prices and
hold them until markets return to normal. And when that happens,
money will flow back to the Treasury as these assets are sold. And
we expect that much, if not all, of the tax dollars we invest will
be paid back.”
books contain a whole series of summaries of
corruption in USA politics. Dick Morris has
brought out two, soon to become three, books
concentrating in much detail on US goverment
corruption. The first is Outrage.
It includes a useful short chapter on Fannie
Mae of nearly 20 pages. The second, Fleeced,
has been at the top of the bestseller lists
for several weeks.
How Liberals, Congress, Unions, Drug Companies,
Big Oil, Banks, Lobbyists, Corporations, the
United Nations, the World Bank, the INS, the
TSA, ... Ripping Us Off... and What to Do About
by Dick Morris and Eileen McGann
Fleeced: How Barack Obama,
Media Mockery of Terrorist Threats, Liberals
Who Want to Kill Talk Radio, the Do-Nothing
Congress, Companies That Help Iran, and Washington
Lobbyists for Foreign Governments Are Scamming
Us ... and What to Do About It
by Dick Morris and Eileen Mcgann
“Sen. John McCain [R-AZ]:
Mr. President, this week Fannie Mae's regulator reported that the
company's quarterly reports of profit growth over the past few years
were "illusions deliberately and systematically created"
by the company's senior management, which resulted in a $10.6 billion
“The Office of Federal Housing Enterprise Oversight's report
goes on to say that Fannie Mae employees deliberately and intentionally
manipulated financial reports to hit earnings targets in order
to trigger bonuses for senior executives. In the case of Franklin
Raines, Fannie Mae's former chief executive officer, OFHEO's report
shows that over half of Mr. Raines' compensation for the 6 years
through 2003 was directly tied to meeting earnings targets. The
report of financial misconduct at Fannie Mae echoes the deeply
troubling $5 billion profit restatement at Freddie Mac.
“The OFHEO report also states that Fannie Mae used its
political power to lobby Congress in an effort to interfere with
the regulator's examination of the company's accounting problems.
This report comes some weeks after Freddie Mac paid a record $3.8
million fine in a settlement with the Federal Election Commission
and restated lobbying disclosure reports from 2004 to 2005. These
are entities that have demonstrated over and over again that they
are deeply in need of reform.
“For years I have been concerned about the regulatory structure
that governs Fannie Mae and Freddie Mac--known as Government-sponsored
entities or GSEs--and the sheer magnitude of these companies and
the role they play in the housing market. OFHEO's report this
week does nothing to ease these concerns. In fact, the report
does quite the contrary. OFHEO's report solidifies my view that
the GSEs need to be reformed without delay.
“I join as a cosponsor of the Federal Housing Enterprise
Regulatory Reform Act of 2005, S. 190, to underscore my support
for quick passage of GSE regulatory reform legislation. If Congress
does not act, American taxpayers will continue to be exposed to
the enormous risk that Fannie Mae and Freddie Mac pose to the
housing market, the overall financial system, and the economy
as a whole.
“I urge my colleagues to support swift action on this GSE
reform legislation.” John McCain, 25 May, 2006 [Quoted from