McCain's Fannie and Freddie Connections
| Wed Sep. 10, 2008 1:01 PM PDT
John McCain railed against Fannie Mae and Freddie Mac on the campaign trail today, saying that the CEOs that led the lenders to ruin "deserve nothing" and should have to pay back their severance packages. In an Wall Street Journal op-ed co-bylined by his vice presidential pick, Sarah Palin, McCain suggested bold reforms for Fannie and Freddie that would "terminate future lobbying, which was one of the primary contributors to this great debacle."
If that's the case, McCain should look first to his campaign staffers as the cause of that debacle. One of them was Fannie Mae's head of lobbying, and spread tens of millions of dollars around Washington in the form of lobbying contracts. A number of McCain staffers were on the receiving end of those contracts, collecting hundreds of thousands of dollars each from the lenders to rep their interests. And McCain's campaign manager served as president of a lobbying association that fought to protect Freddie Mac and Fannie Mae from the sort of regulation that McCain is now proposing.
In McCain's op-ed in the Journal, he and Palin wrote:
For years, Congress failed to act and it is deeply troubling that what we are seeing is an exercise in crisis management rather than sound planning, and at great cost to taxpayers.
We promise the American people that our administration will be different. We have long records of standing up to special interests…
But McCain's own campaign staffers are those special interests, a fact that casts doubt on both McCain's hiring judgment and his ability to pursue tough reforms of Fannie and Freddie.
Continues Below
Continued From Above
Aquiles Suarez, listed as an economic adviser to the McCain campaign in a July 2007 McCain press release, was formerly the director of government and industry relations for Fannie Mae. The Senate Lobbying Database says Suarez oversaw the lending giant's $47,510,000 lobbying campaign from 2003 to 2006.
And other current McCain campaign staffers were the lobbyists receiving shares of that money. According to the Senate Lobbying Database, the lobbying firm of Charlie Black, one of McCain's top aides, made at least $820,000 working for Freddie Mac from 1999 to 2004. The McCain campaign's vice-chair Wayne Berman and its congressional liaison John Green made $1.14 million working on behalf of Fannie Mae for lobbying firm Ogilvy Government Relations. Green made an additional $180,000 from Freddie Mac. Arther B. Culvahouse Jr., the VP vetter who helped John McCain select Sarah Palin, earned $80,000 from Fannie Mae in 2003 and 2004, while working for lobbying and law firm O'Melveny & Myers LLP. In addition, Politico reports that at least 20 McCain fundraisers have lobbied for Fannie Mae and Freddie Mac, pocketing at least $12.3 million over the last nine years.
For years McCain campaign manager Rick Davis was head of the Homeownership Alliance, a lobbying association that included Fannie Mae, Freddie Mac, real estate agents, homebuilders, and non-profits. According to Politico, the organization opposed congressional attempts at regulation of Fannie and Freddie, along the lines of what John McCain is currently proposing. In his capacity of president of the group, Davis went on record in 2003 and insisted that no further reform of the lenders was necessary, in contradiction to his current boss's sentiments. "[Fannie and Freddie] are subject to an innovative and stringent risk-based capital stress test," Davis wrote. "The toughest in the financial services industry."
At a campaign rally Wednesday morning in Fairfax, Virginia, John McCain said that the heads of Fannie Mae and Freddie Mac ought to give back the millions of dollars they've earned. What about the lobbyists who helped Fannie and Freddie game the system? Maybe McCain can ask them — at the next campaign strategy meeting.
Photo by flickr user soggydan used under a Creative Commons license.
Comments
Transparency and Accountability Removed by Former Sen Phil Gramm - McCain's Financial Adviser
Gramm was the Chairman of the Banking Committee, he pushed through the "Enron Loophole," which allowed investment banks to bypass Federal regulations governing futures trading, the reason why investment banks were able to falsely inflate the prices of oil, wheat, corn and other commodities through massive futures trading, causing the costs of gas, heating oil and food to go through the roof
Gramm also created the Gramm-Leach-Biley Act, that repealed laws separate banking, insurance, & brokerage activities?laws written after the Great Depression to prevent another Wall Street/Banking Industry collapse The value of the dollar has nose-dived, several major economic institutions have failed, Wall Street is unstable, and we are in a worsening economic situation.
Investment banks that gained the most from the Enron Loophole & the Gramm Act contributed more than a million dollars to Gramm's campaign
www.opensecrets.org/politicians/summary.php?cycle=2002&cid=N00005709
How Gramm's three meltdowns sabotage America's conservative principles
http://www.marketwatch.com/news/story/rip-reaganomics-revolution-1981-2011/story.aspx?guid={9B24FFF5-8588-44AD-A59E-227DB7F1DCB5}#comments
The Real Legacy of the Reagan Revolution
www.huffingtonpost.com/robert-scheer/the-real-legacy-of-the-re_b_112994....
This is the WHOLE story
On May 23, 2006, as a jury in Houston deliberated the case against top Enron executives Kenneth Lay and Jeffrey Skilling, a little-known regulatory agency in Washington, the Office of Federal Housing Enterprise Oversight (OFHEO), released a study with the dryly bureaucratic title "Report of the Special Examination of Fannie Mae." The document received far less attention than the news from Enron, but its conclusions were stunning. In meticulous detail, it outlined a culture of corruption at the Federal National Mortgage Association ? better known as Fannie Mae ? that rivals the most serious corporate scandals in recent years. In this case, however, the main players are Washington insiders ? some of them prominent veterans of the Clinton administration ? and the scandal's effects could ripple through Congress for years.
Fannie Mae is the biggest single source of money for mortgages in the United States. From 1998 to 2004, the years covered by the OFHEO investigation, it was headed by former Clinton budget director Franklin Raines, whose top management team included former Clinton Justice Department official Jamie Gorelick, sometimes mentioned as a future attorney general in a Democratic administration. During that period, the report says, Raines and his team grossly overstated Fannie Mae's earnings ? to the tune of $10.6 billion ? for the purpose of paying themselves big bonuses. "By deliberately and intentionally manipulating accounting to hit earnings targets," the report says, "senior management maximized the bonuses and other executive compensation they received, at the expense of shareholders."
In doing so, the report says, Raines and his team steered Fannie Mae far afield from its original mission, transforming it from a stable business into a risky one. Fannie Mae has its roots in the New Deal, when it was established to increase the amount of money available for mortgages. Over the years, its main business has been to issue debt and then use the proceeds to buy mortgages from lenders, allowing those lenders to give out new mortgages. Originally a government agency, Fannie Mae went private in 1968, with the goal of "increasing the availability and affordability of homeownership for low-, moderate-, and middle-income Americans," according to its mission statement.
But Fannie Mae is not just any private institution. It is congressionally chartered, meaning its existence is established in law, it does not have to pay state and local income taxes, and it is not subject to bankruptcy laws. It can borrow money at a lower rate than anyone else except the federal government itself. Given all that, there is a public perception that Fannie Mae is a rock-solid government institution. "There is an implied guarantee," says Sen. John Sununu, a member of the Senate Banking, Housing, and Urban Affairs Committee who has sponsored legislation to reform Fannie Mae. "Investors think they are the next best thing to Treasuries."...
According to the report, Raines became obsessed with propping up Fannie Mae's earnings per share, or EPS, even if he had to use creative accounting to make it happen. Raines set a series of increasingly higher EPS goals that, if met, would trigger bonuses for the executive team that far surpassed what they received in salary....
It worked. Fannie Mae met its EPS goals, and Raines rewarded his top executives ? and most of all himself ? with unheard-of amounts of money.
Even though his salary never topped $1 million, Raines's total compensation shot from $6.48 million in 1998 to $8.52 million in 1999, to $13.89 million in 2000, to $18.86 million in 2001, to $18.20 million in 2002, to $24.15 million in 2003, all on the strength of EPS bonuses. Investigators found that of the $90.12 million Raines was paid in that six-year period, more than $52 million came from EPS bonuses.
Gorelick's situation was similar. OFHEO found that she took home $26.46 million in the period from 1998 to 2002 (she left in that year, so she wasn't there for the entire period under investigation). Of that figure, nearly $15 million came from EPS bonuses.
Of course, it wasn't legit. "Fannie Mae reported extremely smooth profit growth and hit announced targets for earnings per share precisely each quarter," the OFHEO report says. "Those achievements were illusions deliberately and systematically created by [Fannie Mae's] senior management with the aid of inappropriate accounting and improper earnings management."
In other words, they cooked the books. And to make matters worse, according to OFHEO, when regulators began to catch on to what was happening, Raines and his team then "sought to interfere" with the OFHEO investigation by trying to get Congress to start up a separate probe of OFHEO. Fannie Mae also lobbied Congress to cut OFHEO's funds unless it got rid of the top official in charge of investigating Fannie Mae.
Certainly the Republicans are not without blame, but what about a few inconvenient facts:
President Clinton signed the Gramm-Leach-Bliley Act of 1999 repealing 66 years of consumer protections, after he had it re-written to include "requirements that banks make loans to minorities, farmers, and others who have had little access to credit."
Former Fannie Mae chief Franklin Raines was President Clinton's director of the Office of Management and Budget. He has had a connection to the Obama campaign
Former Fannie Mae chief James Johnson is a prominent Democrat who was an adviser to 2004 Democratic presidential nominee John Kerry and was selected by Obama to help vet his vice presidential prospects.
President Clinton appointed William M. Daley to the Fannie Mae board in 1993. Daley was chairman of Al Gore's 2000 presidential campaign and Clinton's secretary of commerce from 1997 to 2000. Daley is the son of former Chicago Mayor Richard J. Daley and brother of current Chicago Mayor Richard M. Daley.
Sen Barney Frank (D., Mass.) and Sen. Chuck Schumer (D., N.Y.) were strong supporters of Fannie Mae and Freddie Mac and protected them from stronger regulatory oversight. 2003:
"These two entities ? Fannie Mae and Freddie Mac ? are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
Sen. Chris Dodd (D., Conn), chairman of the Senate Banking and Urban Affairs Committee has consistently sought to allay fears about Fannie and Freddie, saying they were fundamentally sound.
Jamie S. Gorelick was Deputy Attorney General during the Clinton administration. Although Gorelick had no background in finance, she joined Fannie Mae in 1997 as vice chair and departed in 2003. Federal investigators say that Fannie Mae's management directed employees to manipulate accounting and earnings to trigger maximum bonuses for senior executives from 1998 to 2003
The top five recipients of Fannie Mae and Freddie Mac campaign contributions (1989-2008) are Democrats: Dodd, Kerry, Obama, Clinton and Kanjorski. Obama has only been in office a short while.
Transparency and Accountability Removed by Former Sen Phil Gramm - McCain's Financial Adviser
Gramm was the Chairman of the Banking Committee, he pushed through the "Enron Loophole," which allowed investment banks to bypass Federal regulations governing futures trading, the reason why investment banks were able to falsely inflate the prices of oil, wheat, corn and other commodities through massive futures trading, causing the costs of gas, heating oil and food to go through the roof
Gramm also created the Gramm-Leach-Biley Act, that repealed laws separate banking, insurance, & brokerage activities?laws written after the Great Depression to prevent another Wall Street/Banking Industry collapse The value of the dollar has nose-dived, several major economic institutions have failed, Wall Street is unstable, and we are in a worsening economic situation.
Investment banks that gained the most from the Enron Loophole & the Gramm Act contributed more than a million dollars to Gramm's campaign
www.opensecrets.org/politicians/summary.php?cycle=2002&cid=N00005709
How Gramm's three meltdowns sabotage America's conservative principles
http://www.marketwatch.com/news/story/rip-reaganomics-revolution-1981-2011/story.aspx?guid={9B24FFF5-8588-44AD-A59E-227DB7F1DCB5}#comments
The Real Legacy of the Reagan Revolution
www.huffingtonpost.com/robert-scheer/the-real-legacy-of-the-re_b_112994....
This is the WHOLE story
On May 23, 2006, as a jury in Houston deliberated the case against top Enron executives Kenneth Lay and Jeffrey Skilling, a little-known regulatory agency in Washington, the Office of Federal Housing Enterprise Oversight (OFHEO), released a study with the dryly bureaucratic title "Report of the Special Examination of Fannie Mae." The document received far less attention than the news from Enron, but its conclusions were stunning. In meticulous detail, it outlined a culture of corruption at the Federal National Mortgage Association ? better known as Fannie Mae ? that rivals the most serious corporate scandals in recent years. In this case, however, the main players are Washington insiders ? some of them prominent veterans of the Clinton administration ? and the scandal's effects could ripple through Congress for years.
Fannie Mae is the biggest single source of money for mortgages in the United States. From 1998 to 2004, the years covered by the OFHEO investigation, it was headed by former Clinton budget director Franklin Raines, whose top management team included former Clinton Justice Department official Jamie Gorelick, sometimes mentioned as a future attorney general in a Democratic administration. During that period, the report says, Raines and his team grossly overstated Fannie Mae's earnings ? to the tune of $10.6 billion ? for the purpose of paying themselves big bonuses. "By deliberately and intentionally manipulating accounting to hit earnings targets," the report says, "senior management maximized the bonuses and other executive compensation they received, at the expense of shareholders."
In doing so, the report says, Raines and his team steered Fannie Mae far afield from its original mission, transforming it from a stable business into a risky one. Fannie Mae has its roots in the New Deal, when it was established to increase the amount of money available for mortgages. Over the years, its main business has been to issue debt and then use the proceeds to buy mortgages from lenders, allowing those lenders to give out new mortgages. Originally a government agency, Fannie Mae went private in 1968, with the goal of "increasing the availability and affordability of homeownership for low-, moderate-, and middle-income Americans," according to its mission statement.
But Fannie Mae is not just any private institution. It is congressionally chartered, meaning its existence is established in law, it does not have to pay state and local income taxes, and it is not subject to bankruptcy laws. It can borrow money at a lower rate than anyone else except the federal government itself. Given all that, there is a public perception that Fannie Mae is a rock-solid government institution. "There is an implied guarantee," says Sen. John Sununu, a member of the Senate Banking, Housing, and Urban Affairs Committee who has sponsored legislation to reform Fannie Mae. "Investors think they are the next best thing to Treasuries."...
According to the report, Raines became obsessed with propping up Fannie Mae's earnings per share, or EPS, even if he had to use creative accounting to make it happen. Raines set a series of increasingly higher EPS goals that, if met, would trigger bonuses for the executive team that far surpassed what they received in salary....
It worked. Fannie Mae met its EPS goals, and Raines rewarded his top executives ? and most of all himself ? with unheard-of amounts of money.
Even though his salary never topped $1 million, Raines's total compensation shot from $6.48 million in 1998 to $8.52 million in 1999, to $13.89 million in 2000, to $18.86 million in 2001, to $18.20 million in 2002, to $24.15 million in 2003, all on the strength of EPS bonuses. Investigators found that of the $90.12 million Raines was paid in that six-year period, more than $52 million came from EPS bonuses.
Gorelick's situation was similar. OFHEO found that she took home $26.46 million in the period from 1998 to 2002 (she left in that year, so she wasn't there for the entire period under investigation). Of that figure, nearly $15 million came from EPS bonuses.
Of course, it wasn't legit. "Fannie Mae reported extremely smooth profit growth and hit announced targets for earnings per share precisely each quarter," the OFHEO report says. "Those achievements were illusions deliberately and systematically created by [Fannie Mae's] senior management with the aid of inappropriate accounting and improper earnings management."
In other words, they cooked the books. And to make matters worse, according to OFHEO, when regulators began to catch on to what was happening, Raines and his team then "sought to interfere" with the OFHEO investigation by trying to get Congress to start up a separate probe of OFHEO. Fannie Mae also lobbied Congress to cut OFHEO's funds unless it got rid of the top official in charge of investigating Fannie Mae.
Certainly the Republicans are not without blame, but what about a few inconvenient facts:
President Clinton signed the Gramm-Leach-Bliley Act of 1999 repealing 66 years of consumer protections, after he had it re-written to include "requirements that banks make loans to minorities, farmers, and others who have had little access to credit."
Former Fannie Mae chief Franklin Raines was President Clinton's director of the Office of Management and Budget. He has had a connection to the Obama campaign
Former Fannie Mae chief James Johnson is a prominent Democrat who was an adviser to 2004 Democratic presidential nominee John Kerry and was selected by Obama to help vet his vice presidential prospects.
President Clinton appointed William M. Daley to the Fannie Mae board in 1993. Daley was chairman of Al Gore's 2000 presidential campaign and Clinton's secretary of commerce from 1997 to 2000. Daley is the son of former Chicago Mayor Richard J. Daley and brother of current Chicago Mayor Richard M. Daley.
Sen Barney Frank (D., Mass.) and Sen. Chuck Schumer (D., N.Y.) were strong supporters of Fannie Mae and Freddie Mac and protected them from stronger regulatory oversight. 2003:
"These two entities ? Fannie Mae and Freddie Mac ? are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
Sen. Chris Dodd (D., Conn), chairman of the Senate Banking and Urban Affairs Committee has consistently sought to allay fears about Fannie and Freddie, saying they were fundamentally sound.
Jamie S. Gorelick was Deputy Attorney General during the Clinton administration. Although Gorelick had no background in finance, she joined Fannie Mae in 1997 as vice chair and departed in 2003. Federal investigators say that Fannie Mae's management directed employees to manipulate accounting and earnings to trigger maximum bonuses for senior executives from 1998 to 2003
The top five recipients of Fannie Mae and Freddie Mac campaign contributions (1989-2008) are Democrats: Dodd, Kerry, Obama, Clinton and Kanjorski. Obama has only been in office a short while.
This would be a decent article, yet you fail to mention Obama's connections (which aren't as deep anyway). NY Times Ariticle to read: http://www.nytimes.com/2008/09/10/us/politics/10fannie.html
This is just so typical. I hope Obama runs a tv ad SOON...calling out McSame and the Double Talk Express.
Do you hear me Barack? Don't you dare lose this election because your being too nice. Time to play HARDBALL with these guys.
Transparency and Accountability Removed by Former Sen Phil Gramm - McCain's Financial Adviser
Gramm was the Chairman of the Banking Committee, he pushed through the "Enron Loophole," which allowed investment banks to bypass Federal regulations governing futures trading, the reason why investment banks were able to falsely inflate the prices of oil, wheat, corn and other commodities through massive futures trading, causing the costs of gas, heating oil and food to go through the roof
Gramm also created the Gramm-Leach-Biley Act, that repealed laws separate banking, insurance, & brokerage activitieslaws written after the Great Depression to prevent another Wall Street/Banking Industry collapse The value of the dollar has nose-dived, several major economic institutions have failed, Wall Street is unstable, and we are in a worsening economic situation.
Investment banks that gained the most from the Enron Loophole & the Gramm Act contributed more than a million dollars to Gramm's campaign
www.opensecrets.org/politicians/summary.php?cycle=2002&cid=N00005709
How Gramm's three meltdowns sabotage America's conservative principles
http://www.marketwatch.com/news/story/rip-reaganomics-revolution-1981-2011/story.aspx?guid={9B24FFF5-8588-44AD-A59E-227DB7F1DCB5}#comments
The Real Legacy of the Reagan Revolution
www.huffingtonpost.com/robert-scheer/the-real-legacy-of-the-re_b_112994....
Freddie/Fannie MicMac scammy-wammy, gol-dammie, yet another shining negative example, or warning, about 'the government' and money, just got done reading another story, this one talking about oil royalties and how they get (mis)handled, scandal and sex and drugs and booze there too, is ANYone in our government sober and straight-up and not 'on the take' these days? What really goes on...what really goes on...I will NEVER sign mortgage papers so long as I may live, period.
If there is to be any bailout of FMNA/FHLMC, it should come with the provision that all pre-deregulation controls be returned. All involved should admit it was a huge mistake to deregulate these institution and to tell the American taxpayers of whom will ultimately pay for these mistakes why they did it.
This is perhaps the best reason McCain should not be president. Talk about hypocricy!! He just opens his mouth and the words tumble out and I just don't think he is as honest as he leads people to believe. This clarifys his dishonesty to me. I just hope America wakes up and elects the right person or we are in deeper trouble than we are now.
As an above post points out, Phil Gramm was instrumental in removing the walls between banking, mortgages and the stock markets. Gramm Leach Bilely was a capstone to this effort. Gramm, of course, is on the Bullshit express with John McCain. Bill Clinton also weighed in, helping the Republicans vote down Glass Steagal.
Now as we watch Salmon Bros, and Washington Mutual go down, you can thank Phil Gramm and Bill Clinton. Deregulation has two fathers - not one.
Of course the top 4 recipients of campaign donations from Fannie Mae and Freddie Mac are, in order: Chris Dodd, John Kerry, Barack Obama, and Hillary Clinton.
But hey, its the Republican slime machine that is playing fast and loose with the facts. You can trust Mother Jones.
Obama has also been feeling the strains of this entanglement as many top Democratic party members have ties to the two GSEs. The paper noted that James A. Johnson, the former head of his vice presidential vetting panel was once a chief executive for Fannie Mae along with Franklin D. Raines. Also Maria Echaveste, a top Clinton White House official, once lobbied for Freddie Mac, and William M. Daley, former commerce secretary and top Obama backer, was an in-house lobbyist.
Being a real estate appraiser, I know about the mortgage industry than most. Thanks MJ for reveiling just half of the story!
Let's see. You all point fingers at McCain. Obama received $126,000 from the freddie Mac and fannie mae club. two of fannie mae CEO's,
remember those evil influence peddling ceo's, from fannie mae are Obama economic advisers. Lies lies lies. Like Barack only tells the truth. you can thow the name liar at one side but never when it fits your side. By the way Obama voted for the bill that gave big oil companies tax breaks. McCain voted against it. Look in the mirror people and you will see yourselves.
Obama is hanging out with the normal working class people tonight, barbara striesand and company.........
You forget to mention who took home TENS OF MILLIONS and who was and is now the head of the governing body, Barney Frank. If '06, McCain tried to sponsor a bill to regulate and Franks said "it would hurt poor people" The dem's are at the bottom of this, do not try to tie it to McCain. This is all democrates. If you doubt it, look and see who has RUN both enterprizes for the last 10 years
John Mcain tried to get fannie/freddie reformed with the Federal Housing Regulatory Reform Act of 2005.(look it up) It was blocked by democrats and Obama did'nt even vote on it. Why?
Barack Obama was the #2 recipient of private donations from Fannie Mae/Freddie Mac in all their years of political donations. He was in office only 3 years!
Do the research its on record in the senate.
Submitted by Rob D (not verified) on Wed Sep. 17, 2008 9:03 AM PDT.
Enough distortions of fact! From Congressional Record May 25, 2006
http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109...
"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 accounting scandal."
snip
"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."
There's more. Please go read it.
So McCain tried to get Fannie/Freddie reformed. Guess who voted against it?
Yup, Democrats.
The more Obama and friends try to point the finger at McCain on this one, the more the mainstream media will finally be forced to print the entire truth.
So, please continue sharing only a small part of the story.
Not as deep? Two of Obama's TOP economic leaders are recent CEO's of Fannie Mae, Franklin RAines and Jim Johnson. If that isn't deep, how about Obama being one of the very TOP recipients of monies from Freddie Mac and Fannie Mae?
It never ceases to amaze me when voters read some article and make a decision without exerting a little energy to find out THE ENTIRE TRUTH. It just reflects people to lazy and too blind to find out if what they want to believe is true or partly true. Filtering information to only support what you want to be true is certain destruction.
well before we get on mccain lets ask a question...what's worse, lobbying congress on behalf of freddie or fannie, or being an ELECTED OFFICIAL who took money from fannie and freddie and then refused to sign any legislation that would have reformed the practices of both freddie and fannie. Obama received the 3rd most contributions among all reps or senators combined. Mccains staffers who are FORMER lobbyists were employed to do a job for freddie and fannie...Obama sold his soul and accepted money in an effort to get elected.
McCain quote from 2005 supporting a bill blocked by Democrats"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.
Hey you liberals. Please don't try to start this blame crap with freddie and fannie. OBAMA HAS THE TRUE SUSPECT AS ECONIMIC ADVISORS RIGHT NOW!! One former Fannie CEO,made 80 MILLION in 6 years from FANNIE MAE.
The chickens WILL come to roost on OBAMA
I love you MoJo, but come on; The Obama campaign took Fannie money and ran with it. This dishonesty was a bipartisan effort. See the Slate article.
http://www.slate.com/id/2200160/
I'm sure now is not the time for Obama to atone for his sins, but he might have to answer for this.
OH Jim,on 9/10
Like I am going to believe ANYTHING from the huffington post? you just made your who argument null and void by quoting that RAG.
When Enron went bankrupt, liberals tried to smear Bush via guilt by association, even though he hadn't anything to do with the crimes, which occurred when Clinton was president, and his Justice Dept. thoroughly prosecuted wrongdoers.
Liberals love to bleat about "greed," but they're silent about the greed displayed by political hacks appointed by Clinton, then chosen by Obama, that helped cause the meltdown of these companies.
This is the WHOLE story
On May 23, 2006, as a jury in Houston deliberated the case against top Enron executives Kenneth Lay and Jeffrey Skilling, a little-known regulatory agency in Washington, the Office of Federal Housing Enterprise Oversight (OFHEO), released a study with the dryly bureaucratic title "Report of the Special Examination of Fannie Mae." The document received far less attention than the news from Enron, but its conclusions were stunning. In meticulous detail, it outlined a culture of corruption at the Federal National Mortgage Association better known as Fannie Mae that rivals the most serious corporate scandals in recent years. In this case, however, the main players are Washington insiders some of them prominent veterans of the Clinton administration and the scandal's effects could ripple through Congress for years.
Fannie Mae is the biggest single source of money for mortgages in the United States. From 1998 to 2004, the years covered by the OFHEO investigation, it was headed by former Clinton budget director Franklin Raines, whose top management team included former Clinton Justice Department official Jamie Gorelick, sometimes mentioned as a future attorney general in a Democratic administration. During that period, the report says, Raines and his team grossly overstated Fannie Mae's earnings to the tune of $10.6 billion for the purpose of paying themselves big bonuses. "By deliberately and intentionally manipulating accounting to hit earnings targets," the report says, "senior management maximized the bonuses and other executive compensation they received, at the expense of shareholders."
In doing so, the report says, Raines and his team steered Fannie Mae far afield from its original mission, transforming it from a stable business into a risky one. Fannie Mae has its roots in the New Deal, when it was established to increase the amount of money available for mortgages. Over the years, its main business has been to issue debt and then use the proceeds to buy mortgages from lenders, allowing those lenders to give out new mortgages. Originally a government agency, Fannie Mae went private in 1968, with the goal of "increasing the availability and affordability of homeownership for low-, moderate-, and middle-income Americans," according to its mission statement.
But Fannie Mae is not just any private institution. It is congressionally chartered, meaning its existence is established in law, it does not have to pay state and local income taxes, and it is not subject to bankruptcy laws. It can borrow money at a lower rate than anyone else except the federal government itself. Given all that, there is a public perception that Fannie Mae is a rock-solid government institution. "There is an implied guarantee," says Sen. John Sununu, a member of the Senate Banking, Housing, and Urban Affairs Committee who has sponsored legislation to reform Fannie Mae. "Investors think they are the next best thing to Treasuries."...
According to the report, Raines became obsessed with propping up Fannie Mae's earnings per share, or EPS, even if he had to use creative accounting to make it happen. Raines set a series of increasingly higher EPS goals that, if met, would trigger bonuses for the executive team that far surpassed what they received in salary....
It worked. Fannie Mae met its EPS goals, and Raines rewarded his top executives and most of all himself with unheard-of amounts of money.
Even though his salary never topped $1 million, Raines's total compensation shot from $6.48 million in 1998 to $8.52 million in 1999, to $13.89 million in 2000, to $18.86 million in 2001, to $18.20 million in 2002, to $24.15 million in 2003, all on the strength of EPS bonuses. Investigators found that of the $90.12 million Raines was paid in that six-year period, more than $52 million came from EPS bonuses.
Gorelick's situation was similar. OFHEO found that she took home $26.46 million in the period from 1998 to 2002 (she left in that year, so she wasn't there for the entire period under investigation). Of that figure, nearly $15 million came from EPS bonuses.
Of course, it wasn't legit. "Fannie Mae reported extremely smooth profit growth and hit announced targets for earnings per share precisely each quarter," the OFHEO report says. "Those achievements were illusions deliberately and systematically created by [Fannie Mae's] senior management with the aid of inappropriate accounting and improper earnings management."
In other words, they cooked the books. And to make matters worse, according to OFHEO, when regulators began to catch on to what was happening, Raines and his team then "sought to interfere" with the OFHEO investigation by trying to get Congress to start up a separate probe of OFHEO. Fannie Mae also lobbied Congress to cut OFHEO's funds unless it got rid of the top official in charge of investigating Fannie Mae.
YOUR BLOG HEADLINE IS CORRECT, THAT YOU COULD AD OBAMA TO THE LIST. I WOULD BE WORRIED IF IT WAS ANY OTHER POLITICIAN. MCCAIN HAS ENOUGH OF A HISTORY OF GOING ON HIS OWN. BUT OBAMA HAS NOTHING LIKE THAT. YOU CANT VOTE PRESENT IN THE WHITE HOUSE AS HE DID TO MANY TIMES IN THE STATE SENATE OF IL.. THE WSJ POINTS OUT THAT EVEN THOUGH OBAMA WAS ONLY IN THE SENATE A FEW YEARS HE BEHIND ON THE CHAIRMAN OF THE COMMITEE CHRIS DODD RECEIVED THE MOST CONTRIBUTIONS FROM FANNIE AND FREDDIE SINCE 89'. THIS PROBABLY EXPLAINS FRANK RAINS AND MR JOHNSON BEING ON HIS STAFF. RAINS HIMSELF MADE OVER 90 MILLION FROM FRED/FANN. MCCAIN WAS WERE ON THIS LIST? SO DONT WORRY ABOUT MCCAIN....
Thank you, Chris, for stopping by to shout at everyone.
There's a caps-lock key somewhere on your keyboard. Often, it's along the lefthand edge. It has an 'off' position as well as an 'ON' position.
Please learn to operate it.
You can find all over the public record.... Top money reciepients in Senate past 8 years... #1 Christopher Doss... #2 Barrack OBAMA ...
Mind you that Obama has been in senate only two years when this report was prepared in 2007 vs Doss eight years. If you claculate money per year, OBAMA will be at least four times higher than anyone else. CHECK YOUR FACTS BEFORE POSTING, PLEASE!
You can find the massive donations from Freddie and Fannie for McCain on the list of contributions to the Repub National Committee. That's where the big money goes.
Unfortunately the RNC opts to only report quarterly so those figures and names won't be available until Oct. 15th.
Pretty clever, huh?
The DNC reports monthly.
Another thing if you look at the lists, not just the company name but the job position is available. There is a difference if the donation comes from the executives or from the low level employees.
Submitted by bonnie (not verified) on Mon Sep. 22, 2008 3:52 PM PDT.
It was the freddie and fannie CEO Johnson who was on the list of advisers for Obama and Obama happened to receive the second highest contribution from these companies. Only Chris Dodd received more. And McCain's contribution came from low level employees.
Bonnie:just heard on cnn that that is not true, be careful with the truth....last week McCain's camp claimed Obama was consulting with Freddie Mac exec, that also not true, read above it was McCain & staff, just on cnn that was not true either & Obama said he talked briefly with him for less than 5 min. somehow we gotta stick to the facts guess that's not possible in this campaign!!!!
McCain got plenty from Fannie and Freddie, he just knew how to hide it.
"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."
You can definitely tell the liberals on this site. They are the ones that will NOT face the facts. McCain lobbied hard for passage of reforms and warned Pres. Clinton and the dems this day would come. They blocked him because they were being paid off by the bunch of rascallions that are now Obama's aides. If ANY OF YOU would do the research on the bill mentioned in about 100000 posts all over the net, you would see that the blame squarely falls on the dems for this mess. They wanted freddie and fannie to give money away to their friends and now we all have to reap what they sowed.
