Flashback: Newt Took $300,000 From Freddie Mac to Stop Congress From Making Much Needed Reform

By Gary P Jackson

Let’s take a trip back to the “good old days” when George W Bush was President and Republicans controlled Congress.

All of us remember the collapse of the mortgage industry and the billions of dollars lost. We also remember this was because of mismanagement and outright fraud at Fannie Mae and Freddie Mac. The top executives at these two quasi-government agencies were stealing the money hand over fist, and thanks to the Carter era “Community Re-investment Act” that was later supercharged by Bill Clinton, making high risk loans to people who had absolutely no ability to repay these loans.

We’re still suffering from the results of this mess. It was the misdeeds by those who ran Fannie and Freddie that caused the financial collapse of 2008. The economy is still in shambles thanks to this.

The Bush administration tried on numerous occasions to fix this problem, starting in 2003. As usual, the democrats pulled out the race card, and proceeded to demonize anyone who dared to stop the madness. This from 2004:

This was in 2004. Notice all of them say nothing was wrong with Fannie Mae and Freddie Mac.

As John Gibson points out these agencies were corrupt, and basically slush fund to pay off democrats [and some Republicans] so they could keep their scheme going. To keep stealing, to keep wasting taxpayer money.

Notice, Barack Obama, who had only been in the Senate a short time, was second only to Chris Dodd in the money received.

In 2005 Congress once again tried to regulate Fannie and Freddie, and once again met steep resistance from the democrats. On May 25, 2006 John McCain spoke forcefully in support of the legislation and against the evils and corruption at Fannie and Freddie:

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.

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.

This was a full two years before the collapse. Ed Morrissey has a good article here.

While the Republicans were doing their jobs: sounding the alarms, and trying to stop this, where was Newt Gingrich?

Well, good old Newt was taking a $300,000 pay-off from Freddie Mac, to help STOP the Republicans: [emphasis mine]

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. Freddie Mac paid the following amounts to the firms of former Republican lawmakers or ex-GOP staffers in 2006:

*Sen. Alfonse D’Amato of New York, at Park Strategies, $240,000.

*Rep. Vin Weber of Minnesota, at Clark & Weinstock, $360,297.

*Rep. Susan Molinari of New York, at Washington Group, $300,062.

*Susan Hirschmann at Williams & Jensen, former chief of staff to House Majority Leader Tom DeLay, R-Texas, $240,790.

[ .... ]

The records obtained by the AP reflect growing concern within Freddie Mac over a chorus of criticism from Republicans worried that Freddie Mac and Fannie Mae had grown too big. The two companies owned or guaranteed over $5 trillion in mortgages.

The Bush administration and Federal Reserve Chairman Alan Greenspan were sounding the alarm about the potential threat to the nation’s financial health if the fortunes of the two mammoth companies turned sour. They did eventually, when they took on $1 trillion worth of subprime mortgages and when their traditional guarantee business deteriorated. Commercial banks regarded Freddie Mac and Fannie Mae as competitors and were anxious to pick up business that would result from scaling back the two companies.

Pushing back, Freddie Mac enlisted prominent conservatives, including Gingrich and former Justice Department official Viet Dinh, paying each $300,000 in 2006, according to internal records.

Gingrich talked and wrote about what he saw as the benefits of the Freddie Mac business model.

Read more here.

The “Freddie Mac business model” consisted of stealing the investors blind and making irresponsible loans. Did Newt actually think Freddie Mac’s business was sound, or was he just earning his $300,000?

We’ve talked about the many betrayals of Newt Gingrich, and this is yet another. While his former colleagues in Congress were trying to actually do their jobs, something that might have saved the Republic from one of the worst economic meltdowns in history, good old Newt sold his soul to the very people who would destroy our economy, for a few pieces of silver.

As the 2012 Republican presidential candidates continue to look less and less appealing, some are starting to fall for Newt’s pretty words and big promises.

Without a true leader in the bunch, no one to really get excited about, many conservatives are falling into the deadly pattern of listening to flowery speeches instead of researching the records of the candidates. Suddenly beating Obama is more important than electing an honest man who will actually bring the reform necessary for the nation to survive.

We must defeat Obama, for sure, but putting in another life-long politician, whose integrity can be bought for a pittance, ain’t gonna get it done. Newt Gingrich is not a man of principle. He’s someone who is always ready to bring aid and comfort to those who would destroy our country. Especially if there is money to be made while doing it.

It would be an incredible mistake to elect a man like Newt. A man who can’t be trusted in any situation.

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36 Comments

Filed under In The News, Politics

36 responses to “Flashback: Newt Took $300,000 From Freddie Mac to Stop Congress From Making Much Needed Reform

  1. Well, name me and ‘honest man’ or blemish-free Conservative that is running and I will vote for that person.

    • Gary P

      Gingrich sure isn’t it! He’s been selling his soul to the highest bidder for years! He’s sold out Conservatism long ago. You realize that the actions by Fannie and Freddie, that Newt helped along, are the reason for the entire economic collapse of 2008, right?

      While Republicans IN OFFICE, even John McCain, were trying to avert disaster, Newt was on the side of the enemies of Liberty and Freedom trying to stop Republicans from saving the economy.

      Pretty words have no meaning when spoken by the likes of Newt Gingrich.

  2. But all the others have flaws and none of them have the breadth, depth or intelligence to be POTUS. We’ve got to vote for SOMEONE besides default to zerO. What’s a person to do????

    • Gary P

      Keep looking, keep vetting. Right now it’s more about finding who isn’t fit. We can’t be timid. We gotta vet everyone of those candidates as strongly as possible. You can bet the media is waiting to pounce on whoever our nominee is.

      All I know is we can’t except people like Newt who have no morals and no character.

      • Well, since Jesus Christ isn’t running, I’ve got to go with Newt. I’ve done deep vetting since Sarah declined. As much as I hate that CRA b.s., Newt is the only candidate with realistic policy proposals to fix this mess and the knowledge of how to turn things around quickly. He’s been through the fire and is the only one who has a chance of withstanding the Chicago-style attacks that will come to any opponent of ‘the one’. He is also the only one who can out-fox and whip zerO in debates. JMO, I’m sure you won’t agree. Who is your candidate?

      • Gary P

        Newt will screw you in a heartbeat. He was saying the right things in 2006 when he was taking money from the very people who have destroyed our economy.

        That’s downright evil.

        Support who you want to, but putting any faith whatsoever in Newt Gingrich isn’t a smart play. It is a recipe for disaster though.

  3. Oh wait. Let me guess, Your candidate is Herman Cain!

    • Gary P

      Nope. I guess you haven’t read my articles about Cain.

      That said, I think Herman is a decent man. Just doesn’t have the experience necessary.

      Frankly, unless something changes there is no one I can vote for in good conscience. This group is the worst the GOP has ever cobbled together. I thought 2008 was bad.

  4. Joy

    Gary, since Newt was never a big deal for me (I saw his ego and his desire to be among the Wash DC insiders long ago), I still didn’t know about his “dirty hands” insofar as lobbying in general – and vehement support of Freddy Mac and Fannie Mae in particular! – were concerned. I simply wasn’t paying attention, but your article was a real eye-opener; and, if one’s honest with oneself, a demand that one totally re-assess Gingrich as a viable candidate – not only “on paper” and in intelligent policy analyses, but as a moral and principled leader in the “Restoration of America!” His blatant seeking of fame, fortune and acceptance as a statesman and Conservative “guru” has been obvious from the get-go; but your expose/report/reminder has been a necessary light shown into a very dark cave. Thank you!

    • Gary P

      Thanks Joy. Yeah Newt has been a problem for Conservatives for a long time. He lost his way, and despite what he says now, he still hasn’t found it.

      What troubles me is some many Palin supporters, who are very good at vetting candidates, have just given up and are giving this cat a pass. It’s incredibly troubling.

  5. Faith M. Martin

    I have yet to find a candidate that has clean hands, all of them, even McCain with his paltry 20K had a contribution somewhere that wasn’t clean. If you look up all the contributions from political activist and lobbiest, evry darn one of them has a dirty contribution….I’m just saying. If we give up because somewhere one of these people has a dirty contribution, there will be no candidates. Christ isn’t running, Romney is a no no, Perry has Merck and Gardisil, Paul (I love the mans straight up honesty, but NOT), Bachman has dibilitating migraines and 27 foster kids SHE raised (again NOT, she had a part in it), plus her hubbies business dealings, Huntsman hasn’t a prayer (all he seems to say is he’s running on his record, but not what his record is), Santorum may or may not be eligible, Sarah is not running, CHristie is not running, Cain has a tax plan that is becoming more unpopular, not less, and the sex scandel, and no political experience what so ever, and then there is Newt with a couple of affairs, a history during the Reagan years of getting things done (yes, he did compromise, yes he did pick his battles, yes he did give in when he had to gain a better position elsewhere, that’s called politics).So, even with this 300K contribution to his “firm”, or as a consultant, I still have to back Newt on this one. He didn’t try to hide this, and I doubt he will even try to dissemble with it, he will most likely say, “Yes, I did take that consultant fee, and in hindsight, I have to say I shouldn’t have, but what’s done is done.” Oh well, I’m just saying, out of this field, I gotta go with someone I know can do the job when his wheels hit the ground.

    • Gary P

      So it’s OK that Newt sold his soul to the people who destroyed our nation’s economy at a time every elected Republican in Congress and the Republican President of these United States was trying to regulate them and avert the coming disaster? Really?

      Newt has a knack for helping the enemies of Liberty and Freedom at the EXACT time Conservatives are in the middle of a serious fight to stop them.

      Newt isn’t fit to serve. Not fit to be dog catcher, let alone president.

  6. Mark Schumacher

    So, we can’t elect this one and we can’t elect that one and we can’t re-elect Obama so we find someone that isn’t running and force them to run (?) or just go to bed and stay there for 5 more years (?). I’d sooner vote for Perry, Gingrich, Cain, Bachman or Santorum than Romney or Huntsman and I’d vote for ANY of them if confronted with that choice v. Obama.

    • Gary P

      So you are OK with people who actively work in direct opposition to everything that is good? People who constantly stand with the enemies of Liberty and Freedom?

      No thanks.

      We gotta figure out who can be trusted to look out for the American people, not themselves or their cronies. Newt is not one of those people.

  7. Newt and the Mandate

    On May 15, 2011 Newt Gingrich appeared on Meet the Press with David Gregory and stated, “I am against Obamacare,” but then contradicts himself stating he supports a mandate to purchase health insurance. Gingrich said, “I agree that all of us have a responsibility to pay–help pay for health care,” and added, “I’ve said consistently we ought to have some requirement that you either have health insurance or you post a bond …”

    Gingrich also admitted that his proposal is a “variation” of the individual mandate, a key component of the Obamacare legislation President Obama signed into law in 2010. Gingrich’s mandate is better than Obama’s mandate because Obama’s plan basically is trying to replace the entire insurance system, creating state exchanges, building a Washington-based model, creating a federal system.

    Newt went on to state, “There are an amazing amount of people who think they ought to be given healthcare. So, a large amount of people earning $75,000 a year don’t buy health insurance, because they want to buy a second house or a better car or want to go on vacation and you and I and everybody else picking up for them. I don’t think having a free-rider system in health is any more appropriate than having a free ride in any other part of our society.”

    David Gregory brought up the fact when Gingrich was on Meet the Press in October 1993, Gingrich said: “I am for people, individuals — exactly like automobile insurance — individuals having health insurance and being required to have health insurance. And I am prepared to vote for a voucher system which will give individuals, on a sliding scale, a government subsidy so we insure that everyone as individuals have health insurance.” Is Newt saying everyone now needs to purchase auto insurance, even those who do not have a car and do not drive?
    Newt Gingrich is concerned with people who have no health insurance showing up for treatment at a hospital. What is wrong with giving the people who receive treatment a bill for services? He did not mention that insurance companies have an extra charge in people’s health insurance premiums to cover people who do not have insurance. Will the insurance companies reduce their premiums then?
    There is a mandate that everyone who drives and has a vehicle need to purchase liability insurance. That insurance is to protect the other driver, not necessarily the owner of the insurance. Nevertheless, they may not have enough insurance, therefore the insurance companies offer underinsured insurance. However, you must purchase uninsured motorist coverage in order to get the underinsured coverage. Why is that? Could it be the insurance company wants to make more money off of the policy holders?
    There are people who claim an individual mandate to purchase health insurance is Constitutional and people should be forced to purchase health insurance, because sometime in everyone’s life they will need healthcare. People may or may not need healthcare throughout their life, however if they do receive treatment it is their responsibility to pay for their treatment.
    Newt calls for an individual mandate, wherein people would be forced to purchase healthcare insurance or post a bond to cover possible future healthcare treatment. A mandate is a mandate, whether it is from the Federal Government or the States.
    Those people who favor the mandate justify it saying sometime in everyone’s life they will need healthcare. People definitely have to eat. When people go to a restaurant they eat their meal and then pay for the food plus a tip for service. Therefore, using their logic should people be required to prepay for the food they will consume in the future? Of course not, the same should hold true for health insurance. Newt stated, “I don’t think having a free-rider system in health is any more appropriate than having a free ride in any other part of our society,” yet says he would issue vouchers to people who could not afford it (“free-riders”) so everyone would have health insurance. What? Wouldn’t those people receiving the subsidies be considered “free-riders?” People should buy what they want to buy and not have it forced on them by Government. People need to be taught to be self reliant, responsible and not dependent on Government. If people receive goods or services, give them a bill and have them pay for it.

  8. No Newt for President
    Sean Hannity has said the country needs to elect a true Ronald Reagan conservative to the office of the President. Then he mentions Newt Gingrich should run for President. I do not understand the contradiction, because Newt is not a true Reagan conservative.
    Newt says the United States is a center right country and the tea party movement shows the American people are not happy with Washington. Newt, tell us something we don’t already know. The American people are waking up to the radical agenda of the Obama administration and the Democrats/Statists. Common Sense Conservatism is rising again and the Statist’s day started coming in November.
    Bob Dole/Dull said it was his turn to run for President and we got 4 more years of the rapist Bill Clinton. Then it was John McCain’s “turn” and we ended up with Barack Hussein Obama.
    The following observations and questions are the reason I do not believe Newt Gingrich is a real common sense Reagan conservative Republican espoused by Hannity.
    Gary Gill was running against Missouri’s 3rd District Democrat Representative Dick Gephardt and he was leading in the polls until Newt praised Gephardt. Gill ended up losing the election.
    Newt made the Contract with America that helped the Republicans win the US House in 1994.
    What did the Republicans do after they won the US House in 1994? What was enacted? Did they follow through on the contract? No.
    In 2005 he teamed up with Hillary Clinton on National Healthcare and claimed she would be a formidable candidate for President. He did a Climate Change commercial with Pelosi and teamed up with Sharpton on education.
    Newt backed Dede Scozzafava, another RINO, in the New York Congressional race.

    Newt was on Greta and commented to her, “You strengthen yourself by attracting more people than by driving them away,” implying that you must compromise your conservative principles in order to expand the party. I believe you stand on conservative principles & let the people come to you.
    Newt is another crony capitalist as he is a member of GE’s healthymagination advisory board.
    Newt supports an individual mandate for healthcare, i.e. he supports Obamacare.
    Above all, he stated the Era of Reagan Conservatism is over.

    He is positioning himself to run for President as a middle of the roader, and is being too cute and disingenuous when he is asked about running for President and gives evasive answers. Now he is in. Newt is out for Newt. He is not a true conservative and this country does not need him as President. Before Hannity or anyone else lends too much support to Newt, Newt should have him explain his reasoning for his actions.

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  10. Reagan is dead and there isn’t anyone on the playing field that can duplicate him…. Newt is probably the lesser of all the evils.. He is the smartest guy in the group of candidates and we know pretty much all his foibles. I can live with the feet of clay when it comes to his personal life and I can live with him taking cash from partisan groups that I and most conservatives oppose. The reason is that of all the people up there, we know what he is and what he advocates and he has been fairly consistent. Romney is Mr. Flip Flop and Perry would get his clock cleaned by Obama in the debate phase which would kill him Ron Paul has a few good ideas but his foreign policy and drug policy won’t fly with most folks. .Also his attempts to scrap the Fed and go back to a gold standard will never fly… Cain has a ever expanding sex scandal and a record of corporate mismanagement that hasn’t hit hard- yet. Ultimately it will come down to who is smart enough and who has the proven skill sets to navigate the Washington scene and get things done? The objective answer is Newt. I don’t like it much, and I will hold my nose as I vote, but it is better than 4 more years of Obama…….

    • Gary P

      Newt is corrupt and a liberal in all but name only. He is far from the lesser of two evils. In fact he is a facilitator of all evil, politically.

      Reagan may be dead, but what made Reagan isn’t. Conservatism, Reagan Conservatism will never die.

      Newt is the worst of the worst. He’s the exact sort of lying, corrupt politician we are trying to run out of government forever.

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  16. If this is true concerning Newt I hope somehow it makes it way to the next debate so he can answer for himself. And if it be true there is but one course for him and it begins with his character. if indeed he is a man of integrity and principle he will apoligize for his mistake and return the $300,000 end of story.

    Reply

    • Gary P

      Returning the money won’t help.

      Wake up. Newt has a pattern of siding with the left and helping them advance their causes. Newt is just as big of a liberal as any democrat. Look at his record. He’s great at pretending to be a Conservative in speeches. In practice though, he’s a liberal.

      If he wants to be president he can go primary Obama. That’s the party he belongs in.

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