How Freddie Mac stopped regulators in their tracks
posted at 1:15 pm on December 8, 2008 by Ed Morrissey
During the presidential campaign, we noted on several occasions that a few Republicans in Congress tried to strengthen regulatory control over Freddie Mac and Fannie Mae before their eventual collapse. A bill written by Chuck Hagel and co-sponsored by the defeated Elizabeth Dole, John Sununu, and John McCain ran afoul of Freddie Mac’s lobbying, as the AP’s Pete Yost reports. Democrats like Barney Frank and Chris Dodd had some Republican company:
The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time.
Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts. …
The AP previously described, in October, how Freddie Mac thwarted efforts to bring a tough regulatory bill sponsored by Republican Sens. Chuck Hagel of Nebraska, John Sununu of New Hampshire, Elizabeth Dole of North Carolina and John McCain of Arizona to a full Senate vote.
At a meeting days after Hagel’s bill went to the full Senate, Syron and McLoughlin berated the company’s in-house lobbyists for failing to keep Hagel’s bill corralled in committee, said the four people familiar with events at Freddie Mac at the time.
Freddie Mac shifted into high gear, secretly paying a Republican consulting firm, Washington-based DCI Group, $2 million to kill Hagel’s legislation. The covert lobbying campaign targeted Republican senators in 2005-06.
According to the newly obtained records, DCI’s deployment was part of a broader campaign that targeted mainly Republicans on Capitol Hill.
We already know about the Democrats who blocked regulatory reform. The Republicans controlled Congress at the time, and despite the Bush administration’s urging for regulatory reform, those bills never moved out of committee. Now we know why. Be sure to read the whole thing.
Blowback
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Our new Sectary of State had no problem taking Fanny and Freddie money.
Firebird on December 8, 2008 at 1:17 PM
Vashta.Nerada on December 8, 2008 at 1:20 PM
Ed, no link to Yost?
Vashta.Nerada on December 8, 2008 at 1:24 PM
What was that phrase T.Boone Pickens uses in his commercials….?
“The biggest transfer of wealth in human history…”
Our leaders were sleeping at the switch.It’s amazing to me at how much government money you can get for just a small contribution or bribe.
It’s like a penny on a thousand dollars.Give a Senator a $100,000 contribution and receive billions of dollars in bailout money.
Sounds good.Where do I sign up?I wish I could influence my mortgage company like that.I could buy someone a $20 lunch and then my mortgage would be forgiven.
Disgraceful.
NeoKong on December 8, 2008 at 1:25 PM
Well there you have it, democrat evildoers Dodd and Frank actually needed republican evildoers to be uncharacteristically evil to commit their (and theirs alone) evil acts on the populace!
ernesto on December 8, 2008 at 1:26 PM
Read the whole thing – where?
reine.de.tout on December 8, 2008 at 1:29 PM
I searched for DCI in all the links you provided. Not sure what I’m supposed to read.
RushBaby on December 8, 2008 at 1:30 PM
twofer
link
news busters
gh on December 8, 2008 at 1:31 PM
this Fannie Mae whispering campaign was noted a couple months ago.
vinman on December 8, 2008 at 1:32 PM
Yeah, and now I’m seeing that waste of skin, Friend of Angelo, Chris Dodd on television this weekend saying which auto CEO’s should have to go. THIS guy gets a say?
What a cluster *&%# we’re living through.
Sugar Land on December 8, 2008 at 1:34 PM
is is making everyone else ill when Chris Dodd shows up on TV talking about the Auto Bailout? Why is this guy not being charged with something?
BiasedGirl on December 8, 2008 at 1:34 PM
Seems to me the Republican candidates just blamed Greedy Wall Street instead of making the real story clear. Every knowledgeable person knew that the Democrats stifled regulation on Freddie and Fannie, but the MSM and the Republican candidates did not make the case. Instead we were told that Bush’s lack of regulation caused the problem! And everyone just rolled over and said nothing to counter it! Not even Bush! Maybe this is the reason, but I say they all blew it big time! Hence Obamanation!
Christian Conservative on December 8, 2008 at 1:37 PM
Thank you, Noel Sheppard!
RushBaby on December 8, 2008 at 1:39 PM
From the link, it looks like Freddie paid former republican members to lobby to kill the bill, while Angelo was paying current democrats (with under the table loan deals) to vote against it. Voting against the bill led to our financial mess, and all members of congress anger me, but this is less of a story than I first thought.
Vashta.Nerada on December 8, 2008 at 1:41 PM
Exactly right. And now the media can leisurely hang it on all Republicans, right down to the janitor.
RushBaby on December 8, 2008 at 1:41 PM
Chris Dodd called for the resignation of the head of GM. I think it’s time the citizens of this country demand his.
TrickyDick on December 8, 2008 at 1:41 PM
I’m a little confused. Is the official conservative stance that too much or too little regulation is at fault for the mortgage meltdown? Because I’ve heard both argued.
justfinethanks on December 8, 2008 at 1:43 PM
This link should help
http://ibdeditorial.com/series11.aspx
Vashta.Nerada on December 8, 2008 at 1:46 PM
Name names.
C’mon you can do it.
Name names.
pabarge on December 8, 2008 at 1:51 PM
Seems to me the Republican candidates just blamed Greedy Wall Street instead of making the real story clear. Every knowledgeable person knew that the Democrats stifled regulation on Freddie and Fannie, but the MSM and the Republican candidates did not make the case. Instead we were told that Bush’s lack of regulation caused the problem! And everyone just rolled over and said nothing to counter it! Not even Bush! Maybe this is the reason, but I say they all blew it big time! Hence Obamanation!
Christian Conservative on December 8, 2008 at 1:37 PM
Except this proves that it wasnt just democrats, in fact, it was Republican support for democrat dumb ideas that did us in. Republicans held the leadership at the time, what congress does under republican leadership is republicans responsability. Democrats could not and did not act alone, thus ALL blame, as you seem to place, does not fall with them.
ernesto on December 8, 2008 at 1:52 PM
Except this proves that it wasnt just democrats, in fact, it was Republican support for democrat dumb ideas that did us in. Republicans held the leadership at the time, what congress does under republican leadership is republicans responsability. Democrats could not and did not act alone, thus ALL blame, as you seem to place, does not fall with them.
ernesto on December 8, 2008 at 1:52 PM
ernesto on December 8, 2008 at 1:52 PM
Just pick one and run with it. It won’t matter as long as congress is congress, or politicians are politicians.
N4646W on December 8, 2008 at 1:56 PM
The soon to commence investigation into Freddie Mac post 1/20/09 will focus entirely on Republicans and the willing media will play right along…
Theworldisnotenough on December 8, 2008 at 2:03 PM
Conservatives should expect better from their representatives.
Sad but unsurprising.
R
williars on December 8, 2008 at 2:07 PM
And to think most of our Reps. have degrees? What did they learn? Where is their common sense? Or their intellect?
sheebe on December 8, 2008 at 2:20 PM
Well, considering Harvard lost $8 billion in their worth…having a degree may not be worth much…
right2bright on December 8, 2008 at 2:27 PM
RE: too little regulation or too much regulation.
Both. Plus BAD regulation.
Regulations that forced banks to make relatively high risk loans to ‘poorly served, minority, poor’ neighborhoods.
Unregulated derivative markets, and accounting regulations that forced banks to mark the value of their unmarketable derivatives to zero.
The unregulated derivatives (credit default swaps) were booked as assets because they produce an income stream when in actuality they are a liability should a default require a payout, made worse when those supposed assets were used as collateral to purchase more derivatives.
Skandia Recluse on December 8, 2008 at 2:28 PM
Where’s the link to the quoted article?
unclesmrgol on December 8, 2008 at 2:37 PM
Here’s one: http://www.hutchnews.com/Todaystop/fmac
unclesmrgol on December 8, 2008 at 2:41 PM
Regulatory reform is irrelevant. The very idea of a GSE is fundamentally flawed; it will inevitably lead to problems. Both Fannie and Freddie should have been dissolved gradually.
JDPerren on December 8, 2008 at 2:54 PM
Well, considering Harvard lost $8 billion in their worth…having a degree may not be worth much…
right2bright on December 8, 2008 at 2:27 PM
Holy Cow! Didn’t know that… Thanks! Is a lot of money!
sheebe on December 8, 2008 at 3:01 PM
Repulicans are just a smaller scab than the Democrats.
The only thing that can save the country is term limits.
notagool on December 8, 2008 at 3:19 PM
Every single one of these Michael Foxtrots should arrested and thrown in jail until they rot…………. literally!
The true damage they have done to this country may not be known for generations to come………. all in the name of “Social Engineering” and aquiring votes.
Their names, and the role they played in this, should be a mantra until every single citizen knows it by heart, and come the 2010 elections………………. HOLD THEM ACCOUNTABLE!!!
Seven Percent Solution on December 8, 2008 at 4:08 PM
Beware what you wish for. The Law of Unexpected Consequences will rule supreme here, should term limits be enacted. Just look at the “permanent political class” in the UK, where MP’s are so often figureheads and the assistance make policy by default.
Wanderlust on December 8, 2008 at 4:37 PM
er, “assistants”
Wanderlust on December 8, 2008 at 4:37 PM
A Republican consulting firm was paid $2M out of $11.7M to lobby on behalf of a company that had far more support from Democrats than Republicans… which of course absolves the Democrats completely from their eternal stupidity when it comes to economics. (go look how deep in the red SS and Medicare are while you’re at it)
Whatever lets you sleep at night.
Chuck Schick on December 8, 2008 at 5:25 PM
Don’t care whcich Parties or who. Make them ALL pay a price.
jeanie on December 8, 2008 at 5:42 PM
no enron-esque outrage?
lillyanneinc on December 8, 2008 at 6:46 PM
Meh, I didn’t think there was anyone in DC that didn’t benefit from the Fannie/Freddie scam, so this is no shock. I even doubt that 2006 regulation bill backed by McCain was anything more than a resume enhancer.
Bush tried to crack down on F/F much earlier, with no result, but at the same time he kept peddling various no-cost/low-cost down payment mortgage programs for minorities, which just added to the mess.
Washington’s a cesspool, and it’s about to get even more toxic.
Nichevo on December 8, 2008 at 7:53 PM
Newt is dead to me now.
Mallard T. Drake on December 8, 2008 at 11:02 PM
What I have to say about Mr. Gingrich cannot be said in words mild enough to print even on Daily Kos let alone here. There is a special place in Satan’s parlor reserved for him and his ilk.
{^_^}
herself on December 8, 2008 at 11:11 PM
Thanks Newt. I will remember this next time your PAC calls asking for money again.
91Veteran on December 8, 2008 at 11:14 PM
Yeah, 8 billion and left with 36 billion in endowments. Boy big education is really suffering and I bet they get a bailout next.
91Veteran on December 8, 2008 at 11:19 PM
for once i would like someone to explain the BUSH ECNOMY.
why is it that bush plan worked for 5 or 6 years and as soon as nancy reid frank dodd had control of congress the economy went south?
TomLawler on December 9, 2008 at 7:04 AM
for once i would like someone to explain the BUSH ECNOMY.
why is it that bush plan worked for 5 or 6 years and as soon as nancy reid frank dodd had control of congress the economy went south?
TomLawler on December 9, 2008 at 7:04 AM