Gingrich made $1.6-1.8 million in consulting for Freddie Mac

posted at 9:15 am on November 16, 2011 by Ed Morrissey

Is a big consulting payday, or several of them, a big deal in a Republican presidential race?  It depends on the client, and it depends on the work.  Bloomberg reported overnight that Newt Gingrich scored big over the course of eight years in a series of consulting contracts for Freddie Mac, earning perhaps as much as $1.8 million:

Newt Gingrich made between $1.6 million and $1.8 million in consulting fees from two contracts with mortgage company Freddie Mac, according to two people familiar with the arrangement.

The total amount is significantly larger than the $300,000 payment from Freddie Mac that Gingrich was asked about during a Republican presidential debate on Nov. 9 sponsored by CNBC, and more than was disclosed in the middle of congressional investigations into the housing industry collapse.

Gingrich’s business relationship with Freddie Mac spanned a period of eight years. When asked at the debate what he did to earn a $300,000 payment in 2006, the former speaker said he “offered them advice on precisely what they didn’t do,” and warned the company that its lending practices were “insane.” Former Freddie Mac executives who worked with Gingrich dispute that account.

The Bloomberg account makes it clear that Gingrich never lobbied for Freddie Mac, but the subject of his consultations remains in dispute.  Gingrich has stated that he tried to advise Freddie Mac executives to reform their lending practices and advised them on historical problems with loose lending.  According to Bloomberg’s sources, in the first few years he provided written support for their initiatives, which they used to argue for support from Congress in the early years of the bubble.

What about later?  Bloomberg’s report contains this curious passage about his 2006 contract, which lasted until 2008, just as the bubble popped:

Former Freddie Mac officials familiar with his work in 2006 say Gingrich was asked to build bridges to Capitol Hill Republicans and develop an argument on behalf of the company’s public-private structure that would resonate with conservatives seeking to dismantle it.

He was expected to provide written material that could be circulated among free-market conservatives in Congress and in outside organizations, said two former company executives familiar with Gingrich’s role at the firm. He didn’t produce a white paper or any other document the firm could use on its behalf, they said.

That’s certainly intriguing.  Gingrich could probably write that kind of white paper in his sleep, if he were so inclined.  Instead, at least according to Bloomberg’s sources among former Freddie Mac officials, Gingrich didn’t give them anything they could have used to garner more support on Capitol Hill for their bubble-creating policies.  What was Gingrich telling them from 2006-8?  Gingrich says he’s bound by a confidentiality agreement — standard for consultants with access to highly proprietary information — and I’m betting Freddie Mac won’t be releasing him from those NDAs any time soon.

Perhaps what happened after Gingrich’s contract expired might give some indication as to what was being said internally:

Since his retainer with Freddie Mac ended in 2008, Gingrich has become a critic of the government-sponsored enterprises, which were pushed into insolvency by subprime mortgages.

The two companies, Freddie Mac and Fannie Mae, “are so thoroughly politicized and preside over such irresponsible lending policies that they need to be replaced with smaller, private companies operating without government guarantees, whose leaders focus on making a profit, not manipulating politicians,” Gingrich wrote in his 2011 book, “To Save America.”

It’s possible that Gingrich supported Congressional pressure on Fannie and Freddie to expand home ownership in 1999-2002 during his first round with Freddie, and then changed his mind during his second consultation period.  That would mean that both Gingrich and Bloomberg’s sources are telling the truth, but just in the context of different time frames.  That would certainly explain why Gingrich didn’t provide them any supporting white papers despite being on a two-year retainer from 2006-8.

Even so, the fact that Gingrich had such a lengthy consulting relationship with such a toxic organization might be enough to turn off Republican voters.  The nexus of power and big business is one of the themes of the Tea Party’s efforts at reform, and the ability of the powerful to move into consulting relationships with big-money players like Freddie Mac is one of the symptoms of the problem.  If anyone could defend their connections to Freddie, it’s Gingrich, and we’ll see if any defense is possible.

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g2825m, could you possibly be more gullible?
Hard Right on November 16, 2011 at 12:34 PM

It’s pitiable. In another time with another candidate, say 1964 and Goldwater, we could understand. Deep conservative principles and ideals were getting a national dry run and the stage was being set for future revivals. And the Left had not reached the vicious zenith in the culture that it has now. But Romney? In 2012? It’s too sad – for all of us. But we shouldn’t allow ourselves to be drawn into these Romney-Obama conundrums. Romney is not inevitable; indeed, he is eminently beatable — right now. Gingrich knows this. I imagine he will get around to the problem of Romney soon enough. He is playing the kind of game that is alternately tightening and spastically loosening Romney’s sphincter.

rrpjr on November 16, 2011 at 1:10 PM

Mr. Joe on November 16, 2011 at 1:08 PM

-
That does it… I’m voting for Obama./
-

RalphyBoy on November 16, 2011 at 1:10 PM

It’s pitiable. In another time with another candidate, say 1964 and Goldwater, we could understand. Deep conservative principles and ideals were getting a national dry run and the stage was being set for future revivals. And the Left had not reached the vicious zenith in the culture that it has now. But Romney? In 2012? It’s too sad – for all of us. But we shouldn’t allow ourselves to be drawn into these Romney-Obama conundrums. Romney is not inevitable; indeed, he is eminently beatable — right now. Gingrich knows this. I imagine he will get around to the problem of Romney soon enough. He is playing the kind of game that is alternately tightening and spastically loosening Romney’s sphincter.

rrpjr

If I have to vote romney vs. obama I may do so. But I agree he is beatable NOW and we should pursue that end.

Hard Right on November 16, 2011 at 1:13 PM

It’s amazing that this is coming out just as Newt has momentum… It’s like Axelrod is trying to clear the field for Obama…

phreshone on November 16, 2011 at 1:25 PM

It’s amazing that this is coming out just as Newt has momentum… It’s like Axelrod is trying to clear the field for Obama…

phreshone on November 16, 2011 at 1:25 PM

He wouldn’t do that, would he?
He must have noticed how quickly he knee jerk

neuquenguy on November 16, 2011 at 1:38 PM

It’s amazing that this is coming out just as Newt has momentum… It’s like Axelrod is trying to clear the field for Obama…

phreshone on November 16, 2011 at 1:25 PM

I’m surprised that no one is making the call for Sarah to throw her hat in the ring.
Palin has already proven herself in a VP debate.
Palin is a known entity, fully vetted by the press.
Palin can quickly raise enough funds to make a serious run for the White House.

bayam on November 16, 2011 at 1:45 PM

The mandate was in MA’s right as it is written in their Constitution by John Adams.

g2825m

Just because he had the right to sign legislation that is destroying his state’s health care system doesn’t mean he should be applauded or excused for doing it. Why do we want a president who believes it’s okay to do stupid things simply because they have the right?

Romney is the one candidate I likely won’t vote for. I’m not one of those folks who are ok with Democrats as long as they are our Democrats.

xblade on November 16, 2011 at 1:52 PM

bayam on November 16, 2011 at 1:45 PM

There is the fact that she committed to NOT running as a third party which she would almost 50/50 have to do.

And she has either missed or about to miss filing deadlines.

Additionally there is a Sarah Palin earthquake movement on FB if you are interested but not sure it is going to go anywhere. The best one could hope for was a brokered convention at which she was chosen or if picked for VP to someone like Gingrich or Romney. As much as i consider Romney a RINOmaximus…I could see my self voting fro even him if She was the fire at his feet~!

RedLizard64 on November 16, 2011 at 1:55 PM

I’m surprised that no one is making the call for Sarah to throw her hat in the ring.
Palin has already proven herself in a VP debate.
Palin is a known entity, fully vetted by the press.
Palin can quickly raise enough funds to make a serious run for the White House.

bayam on November 16, 2011 at 1:45 PM

You’re a little behind things.

katy the mean old lady on November 16, 2011 at 1:56 PM

So for 8 years he kept telling Freddie they were doing the wrong thing, and they kept paying him to do that over and over again to the tune of over $1.5 mill?

Newt wants a federal government just big enough for him to pursue whatever idea he fancies at a particular time, whether that be mandated insurance or executing drug-dealers.

scotta on November 16, 2011 at 2:17 PM

Romney is not inevitable; indeed, he is eminently beatable — right now. Gingrich knows this. I imagine he will get around to the problem of Romney soon enough. He is playing the kind of game that is alternately tightening and spastically loosening Romney’s sphincter.

rrpjr on November 16, 2011 at 1:10 PM

As the republican nominee, romney is inevitable. If you don’t see that, you never will (until it’s too late). He is, however, beatable as obama will wipe the floor with him.

I hate this situation, but I don’t have the ability to get the message out there. Those who do, the other republican candidates, have managed to destroy each other quite nicely with the help of the msm.

We’ve seen this scenario play itself out before. In fact, it was the last time we had a chance to watch it play out (mccain) so there’s really no excuse to get blindsided by it again, like we in fact are.

runawayyyy on November 16, 2011 at 2:26 PM

Understand this, Newt fans(a group I consider myself a part of incidentally). If you throw him under the bus, you’re stuck with Romney. Cuz Perry ain’t coming back and there’s no one else left(don’t even try to sell me on Santorum).

Doughboy on November 16, 2011 at 9:26 AM

If that’s the attitude of the base, then better start preparing to vote for Romney right now folks.

jarodea on November 16, 2011 at 2:29 PM

Everybody that had any financial experience was well aware that we could not have housing prices continue to rise 30%+ a year, unless we were able for a time to suck up foreign investors’ money with the USA’s reputation for strength and as the best place on earth for a foreigner to make a safe investment where it would not be stolen politically.

It was our legal system that attracted them, stupid.
That bias was used to sell useless mortgages backing Bonds. The mortgages had straw buyers, gamblers with no income stream, and fraudulent appraisers until the idea was craeted that prices only go up.

people were buying contracts for future Condo units and flipping them at profits before the Condos were built. Today no one will buy those condo units for any price. A few will rent cheap.

The professed smartest historian on earth, Mr Gingrich, did know that. He just wanted his share of the gold that was flowing out of this massive deception.

jimw on November 16, 2011 at 2:38 PM

I’m surprised that no one is making the call for Sarah to throw her hat in the ring.
Palin has already proven herself in a VP debate.
Palin is a known entity, fully vetted by the press.
Palin can quickly raise enough funds to make a serious run for the White House.

bayam on November 16, 2011 at 1:45 PM

Palin had a substantial number of supporters practically begging her to run for 3 years. She obviously was unswayed by it.

Kataklysmic on November 16, 2011 at 2:42 PM

jimw on November 16, 2011 at 2:38 PM

Cain is not coming back, Jim. I’m sorry — I’m so, so sorry. :-(

Punchenko on November 16, 2011 at 3:54 PM

As the republican nominee, romney is inevitable. If you don’t see that, you never will (until it’s too late). He is, however, beatable as obama will wipe the floor with him.

With what? His record of scandals and lack of accomplishment? His fabulous economy? His teleprompter speaking ability? His anti-capitalism? His class warfare rhetoric? His bend down apologizing foreign policy? His churlishness? The race card?

Do tell.

Basilsbest on November 16, 2011 at 4:54 PM

runawayyyy on November 16, 2011 at 2:26 PM

I understand your fatalism based on historical patterns, but the contention of inevitability at this point is silly I think, nor does it have any real purpose that I can see (other than wish-fulfillment). And if you are correct, then it is already “too late.”

It is my simple belief that the Romney model — man, method, mindset — is too insanely out of sync with our time to survive through the final stretch. If I’m wrong and he does win the nomination, it will be an unnatural political event, a kind of subversion of natural energy within conservatism, and prove so widely demoralizing as to lead to some new political eruption I can’t predict (and which might prove healthy). I don’t believe there is any way the imposition of Romney as a solution to Obama will NOT end up doing this.

I agree otherwise. Romney is not internally, constitutionally capable of engaging in an actual fight with Obama – or with anyone, really. It is not so much that Obama will wipe the floor with him that Romney will simply disintegrate. He will have a campaign plan, but this plan will quickly fall apart, as he will, under the heat, shock and chaos of the assault against him.

rrpjr on November 16, 2011 at 5:21 PM

With what? His record of scandals and lack of accomplishment? His fabulous economy? His teleprompter speaking ability? His anti-capitalism? His class warfare rhetoric? His bend down apologizing foreign policy? His churlishness? The race card?

Do tell.

Basilsbest on November 16, 2011 at 4:54 PM

None of those things exist. Because the MSM has berried and replace them with demonization of Republicans, and they have done it successfully. Go out on the street and ask the average American if they are aware of any Obama scandal.

neuquenguy on November 16, 2011 at 6:10 PM

neuquenguy on November 16, 2011 at 6:10 PM

I don’t minimize the toxic effect of the media.

However, the Repubs have the big advantage of primaries.

Super Vetting

People who wake up September 8 or October 8, 2012 for the elections can be made to see the scandals and other problems of the guy in office. And the other party can’t change horses.

rrpjr on November 16, 2011 at 5:21 PM

Mitt Will Crumble!

Oh yea. Romney is a real weakling. Like Governor Palin the no show and tease.

The pizza guy who fell apart on questioning and has half the female employees of the Restaurant Association chasing him with pitchforks and burning torches.

And now Newt. The rotten personal life is one thing. (Did he serve a sick wife with divorce papers in the hospital?)Then money for lobbying. From the meltdown forges themselves. Wow.

What about Mitt, again? Find someone else.

IlikedAUH2O on November 16, 2011 at 8:06 PM

It will inevitably come out that Newt lied about why he was paid by Freddie Mac. He was paid to give advice as to how Freddie Mac could break down resistance from the GOP. Fannie Mae/Freddie Mac is the reason for the housing bubble and the banking crisis that put the United States into a recession which is continuing.

Not only did Newt Gingrich not understand the danger posed to the American economy by these freakish GSE’s, he profited from them. Freddie Mac/Freddie Mae are not merely toxic but are symptomatic of everything that’s wrong with Washington. What the hell is a GSE doing using government funds to lobby for more government funding?

Newt is a great debater but his campaign is finished and most here are in denial. Newt had his nose in the trough.

Basilsbest on November 16, 2011 at 10:43 AM

Well said. Not to mention the dishonor of being kicked out of the House while he was speaker for his corruption there. We’re also talking about a man who spearheaded the disastrous impeachment of Clinton for lying about sex at the same time that he was, yeah that’s right, lying about sex. I could go on, but what’s the point? He’s the next not-Mitt and he’ll ride that horse for a few weeks.

So what if he’s the ultimate DC insider “establishment” candidate whereas Mitt has never worked in or for the Feds? So what if he’s a bigger flip-flopper than Mitt is even wrongly painted as being? Who cares? He’s glib and makes snide remarks to the press and that’s the kind of “fighter” that we need, right?

MJBrutus on November 17, 2011 at 6:12 AM

I’ll have to say this is probably the most masterful campaign by any administration in history to destroy the opposition.

Having the “full faith and credit of the United States” and the “full faith and slime by the US media” in coordination with each other is something to behold.

RADIOONE on November 17, 2011 at 7:38 AM

Palin needs to reconsider and run for POTUS.

Otherwise, any choice from this field is going to get us another 4 years of the ‘o’.

ChuckTX on November 17, 2011 at 9:17 AM

This is a great example of someone who should not vote. They are too lazy to learn the facts and would rather watch Jon Stewart for their news.
Vince on November 16, 2011 at 9:54 AM

OK, so go ahead, as a worthy & informed voter, and inform us on the facts about Gingrich’s $1.6 million assistance to Freddie that the public can feel good about.

The kings of leverage were Fannie Mae and Freddie Mac, the two behemoth government- sponsored enterprises (GSEs). For example, by the end of 2007, Fannie’s and Freddie’s combined leverage ratio, including loans they owned and guaranteed,stood at 75 to 1.

From 199 to 2008, the two [Freddie & Fannie]reported spending more than $164 million on lobbying, and their employees and political action committees contributed $15 million to federal election campaigns.The “Fannie and Freddie political machine resisted
any meaningful regulation using highly improper tactics,”

This and much more on the evil financial empires of Freddie & Fannie – as well as on the other causes of the 2008 catastrophe -can be found in the
Financial Crisis Inquiry Report

I just saying I don’t believe Gingrich was helping the public, and I’m not inclined to vote for President someone who gave $1.6 million dollars worth of suspicious assistance to these rotten institutions which cost us so very much.

Chessplayer on November 17, 2011 at 10:37 AM

The Financial Crisis Inquiry Report : http://www.gpoaccess.gov/fcic/fcic.pdf

Chessplayer on November 17, 2011 at 1:08 PM

Gingrich could have produced a whitepaper. Gingrich never produced such whitepaper. Could it have been that Gingrich was neither anti nor pro Freddie, but would see what he could do about making the Republicans disposed to not dismantling it if they would reform some of their financial practices?

Perhaps when he saw them dig in, he made it clear that no roads would be cut. I don’t see this as a definite negative, but then again, it re-enforces my opinion that Newt is a paid bulldog–with a modicum of scruples, and my general distrust of him.

No doubt, he’d be less damaging than giving Obama another 4 years.

Axeman on November 17, 2011 at 6:25 PM

Does anyone have any delusions that Romney won’t be subjected to this treatment?

Chip on November 16, 2011 at 9:24 AM

No, but Romney will probably follow McCain’s lead in showing just how hard he’s trying to bash the right to placate them.

Axeman on November 17, 2011 at 6:27 PM

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