Newt Gingrich, why is GOP nearly silent about Barney Frank’s destroying Fannie Mae and Freddie Mac?

It’s been a mystery why only one member of the House Financial Services Committee has rebuked Congressman Barney Frank for pushing the high-risk home loans that destroyed our economy.

The mystery is solved. Most members of that key committee kept silent about Frank’s $1 trillion roll of the dice because they were paid off. Fannie Mae and Freddie Mac, the government-sponsored institutions that made those bad loans, bought the silence of almost everyone on the committee, Democrat and Republican.

And now, with the notable exception of Congressman Scott Barrett, the whole committee should resign. Other key political leaders, including former House Speaker Newt Gingrich, should be barred from further government work. They sold their souls to Freddie or Fannie or both.

$300,000 for Newt. The Wall Street Journal pointed out yesterday:

Mr. [Franklin] Raines [former chief executive of Fannie Mae] even suggested [two days ago] that Fan and Fred’s regulator was to blame for allowing them to get into trouble. “It is remarkable … that during the period that Fannie Mae substantially increased its exposure to credit risk its regulator made no visible effort to enforce any limits.”

What Mr. Raines failed to mention was that, all along, Fannie and Freddie were spending millions on lobbying to ensure that regulators did not get in their way. As the AP reported Sunday night, Freddie spent $11.7 million in lobbying in 2006 alone, with Newt Gingrich, for example, getting $300,000 that year for talking up the benefits of Freddie’s business model. (Apologies welcome, Newt.)

The Democrats in Congress pushed Fannie Mae and Freddie Mac to make toxic loans to poor people in hope of winning votes from those people. (The AP refuses to report on those Democrats.) Fannie and Freddie rewarded the Democrats for supporting their irresponsible practices. At the same time, Fannie and Freddie paid the Republicans just to keep them from asking too many questions.

Bill for the unborn. The scheme worked for everyone in office. The congressmen got their money. Some of them got their votes. Fannie and Freddie’s executives were paid millions. Sure, the home buyers defaulted on their loans, and the financial system crashed. But the bill for this catastrophe doesn’t hurt Frank or Gingrich. It goes to the taxpayers of generations to come.

Frank Warner

Comments

[Neo]

I also wish to inform members of the Committee of another troubling incident, which I now choose to make public. About a year ago, I corresponded with the Director’s office making inquiry about the levels of executive compensation at the enterprise for the top twenty executives. This is information that had not been made public previously. In a matter of days, Fannie Mae had engaged the services of Mr. Ken Starr for the purpose of informing my staff and committee council of the potential consequences of making that information public. It was made clear that civil legal actions would be filed if the information were to be released. At that time, I made the decision not to release the data since there was no clear relevance to the reform effort underway, not out of concern for any litigation that might be filed. The realization that the disclosure of this information was so sensitive to the Enterprise never fully impacted me, until I read the Director’s report. Now I understand why the Enterprise was so anxious not to have public disclosure of compensation of an entity that was created by the Congress, and supported by the taxpayer.

Congressman Richard Baker Chairman, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises “The OFHEO (Office of Federal Housing Enterprise Oversight) Report: Allegations of accounting and Management Failure at Fannie Mae” -- October 6, 2004

http://financialservices.house.gov/archive/hearings.asp@formmode=detail&hearing=338.html