By Gary P Jackson
First we heard Newt Gingrich had gotten a few hundred thousand from mortgage giant Freddie Mac, for some unknown reason.
That actually turned into a number reportedly between $1.6 and $1.8 million.
Newt claimed he was merely playing the role of historian. No one but the mentally afflicted actually bought that load of BS though, as few historians have D.C. offices on K Street. You know who has a lot’s of offices on K Street in D.C.? Lobbyists.
Now there is a new report out that helps us understand how Newt, a lifelong politician with no history or demonstrated skills in sales, marketing, or mortgage lending, landed a $25,000 a month gig at Freddie Mac, almost immediately after he left Congress in disgrace.
According to the Eric Lichtblau of the New York Times, Newt’s ties to both Freddie Mac and Fannie Mae go back to his time as Speaker of the House. Just as we’ve reported many times that Newt’s work with Freddie, after he left Congress, included trying to stop Congress from coming down hard on the corrupt lender, it now seems he played that same role as Speaker, blocking important legislation. Legislation, that had it been enacted, and enforced, might have staved off the looming housing bubble, that would eventually cause the financial crash of 2007-2008.
If you are thinking I am saying Newt played a direct role in the collapse of the American economy, you would be right.
Both as Speaker and later as a lobbyist, Newt stood with his buddies on the left to stop commonsense legislation that may have been able to stop the absolute mess we are in now.
No allegations, so far, that money changed hands while Newt was Speaker, but he was certainly wined and dined, and there was that lucrative “consulting job” just waiting for him when he left Congress.
From the Times: [emphasis mine]
WASHINGTON — On a trip to Ireland in 1998, Speaker Newt Gingrich researched his Irish roots, discussed the prospects for peace in Northern Ireland and entertained speculation about his presidential ambitions. He even donned work gloves and blue jeans to help build a home in Belfast for a good-will project.
Two of the sponsors for part of the Ireland trip were frequent partners of Mr. Gingrich: Freddie Mac and Fannie Mae — the government-backed housing industry giants that Mr. Gingrich has denounced as he fights to stay in contention against Mitt Romney in the Republican primaries.
Mr. Gingrich has faced many questions recently about the more than $1.6 million in consulting fees he got from Freddie Mac since leaving Congress in 1999. But part of the relationship started years earlier, as records and interviews show that Mr. Gingrich, as House leader in the 1990s, aligned himself with Freddie and Fannie on a number of key issues — defending them in Congress against political attacks, joining with them on housing projects and seeing top aides go work for them.
While Mr. Gingrich has minimized his past connections to the two closely related companies on the campaign trail, his Congressional record shows that his political and financial ties to the firms run deeper and farther back than he has acknowledged publicly and, in fact, set the stage for the lucrative consulting work that followed.
Mr. Gingrich, whose campaign declined to comment on his ties with Fannie and Freddie while in Congress, has been blistering in his recent criticism of the mortgage finance companies. He has blamed them in part for the 2008 housing collapse, said they should now be “broken up,” and in an October debate he declared that Representative Barney Frank should be “in jail” for associating with lobbyists close to Freddie.
But while in Congress, Mr. Gingrich had kind words for the companies. Announcing a housing partnership in Atlanta in 1995, for instance, he held up Fannie as “an excellent example of a former government institution fulfilling its mandate while functioning in the market economy.”
He was far from Fannie and Freddie’s only Congressional supporter in those years; before the stain of the 2008 housing collapse, the companies’ allies were legion.
But Mr. Gingrich’s help was seen as particularly crucial after the Republicans took control of the House in 1994, as Freddie and Fannie tried to turn back rising hostility from some Republicans over their mission, structure and financing.
Once he became speaker in 1995, Mr. Gingrich’s support loomed large as the companies sought to shore up flagging confidence among the Republicans and bolster the case for home ownership, officials said.
“Whenever you could get Republicans who supported you, it was important, and the more prominent the Republican, the better,” said William Maloni, a senior vice president at Fannie Mae until 2004. “Newt would have been important.”
Mr. Gingrich’s senior advisers were important as well, with a handful of his aides and confidants going on to work for Freddie and Fannie or for lobbying groups that represented them. Of particular significance, several officials said, was Fannie’s hiring of Arne L. Christenson, Mr. Gingrich’s chief of staff, as a top executive and lobbyist in 1999.
“From their perspective, hiring someone who could beef up their Republican credentials made perfect sense,” said Jack Howard, policy director for Mr. Gingrich at the time. Mr. Christenson did not return a call seeking comment.
In a showdown critical to the companies’ fortunes, Mr. Gingrich played an important behind-the-scenes role in helping block a proposal in 1995 that would have forced Fannie and Freddie — rather than taxpayers — to pay potentially billions of dollars in increased fees, according to interviews and press accounts at the time.
At the time, Representative Jim Leach, a senior Republican from Iowa who led the House banking committee and was a fierce critic of Fannie and Freddie, wanted the companies to pay the bulk of about $4.8 billion to finance a reserve for ailing savings and loan institutions.
Through their lobbyists, Freddie and Fannie fought hard against the plan, and Mr. Gingrich made his opposition to it clear in a meeting with Mr. Leach on Capitol Hill. By the time the two men emerged, the proposal was dead.
“Newt was quite a pragmatist,” said a Republican official who was involved in the fee increase debate and spoke on the condition of anonymity to avoid becoming embroiled in the current Republican race. In coming to the defense of Freddie and Fannie, Mr. Gingrich “was going with the consensus of his party — of both parties, really,” the official said.
A separate attempt within the House budget committee in 1995 to raise fees on Freddie and Fannie by hundreds of millions of dollars also died without a vote after Mr. Gingrich rejected it. The speaker asserted that raising fees would violate the Republicans’ oft-cited no new tax pledge.
Fannie and Freddie each declined to comment on the companies’ relationships with Mr. Gingrich in the 1990s.
Beyond his role in thwarting legislative threats, Mr. Gingrich also worked with Fannie and Freddie on a number of housing projects in the United States and overseas.
The visit to a Belfast neighborhood in 1998 to start building a home for a low-income family was part of a foreign extension of an American program called “The House that Congress Built.”
The Belfast project was sponsored principally by Fannie and Freddie, along with Habitat for Humanity and the National Association of Realtors. The Realtors’ association called the housing project “a truly unique partnership” between lawmakers and the housing industry.
Marianne Gingrich, Mr. Gingrich’s wife at the time, joined him in Ireland, as did other members of Congress. Public money was apparently used for portions of the trip, considered Congressional business, but the breakdown on the financing, and what part was covered by Fannie and Freddie, could not be determined. Congressional records indicate that Mr. Gingrich did not file a financial disclosure statement for 1998 that would show gifts and trips provided by outside groups that year, although House rules appear to require him to have filed a report within 30 days after he left Congress under an ethics cloud in January 1999.
The Gingrich campaign said he was invited on the trip by Habitat for Humanity. “Improving access to home ownership has long been an aim of his public policy,” the campaign said.
Mr. Howard, the former Gingrich aide, said he associated the housing projects more with Habitat for Humanity, a nonpartisan Christian group headquartered in Mr. Gingrich’s home state of Georgia, than with the corporate sponsors Fannie and Freddie.
“It was a feel-good thing,” he said of the projects. “I think Newt probably saw this as just a good opportunity to do something for Habitat for Humanity.”
In general, Mr. Howard said, issues connected to Fannie and Freddie — whether legislative, political or civic — “were not a priority” for Mr. Gingrich during his time as speaker. “I don’t remember him being directly involved at all,” he said.
But months after Mr. Gingrich left Congress, his direct involvement became clear, as his consulting company signed a $25,000-a-month contract with Freddie. In 2006, he signed a second contract with Freddie as a strategic adviser, a role he described initially as a “historian.” Mr. Romney has branded the work as “influence peddler.”
Defending the contracts, Mr. Gingrich has contrasted the work he did for Freddie as a consultant with the work he did in Congress, when he said he was aligned with those seeking industrywide changes in housing policies.
“There’s a huge difference between what you do when you’re in public office and you’re dealing with the public trust,” he said on Fox News, “and what you do as a private business person who has no direct power and no direct responsibility and you’re sitting there offering advice.”
Some of Mr. Gingrich’s defenses have fallen flat, however, as when he attacked Mr. Romney in a debate last month for holding mutual fund investments in Freddie and Fannie.
“Have you checked your own investments?” Mr. Romney retorted, pointing out that Mr. Gingrich also held investments in them through mutual funds.
“All right,” Mr. Gingrich responded, falling silent.
It’s interesting how Newt drags Habitat for Humanity, a wonderful charity, into this as cover for his trip that was most certainly paid for by Fannie and Freddie.
How Newt has conned people into thinking he is some sort of “political outsider” is beyond me. This guy is the poster boy for the corrupt, influence peddling, political insider we should be running out of politics forever. The sort Sarah Palin’s chief adviser Peter Schweizer talks about in his must have book, Throw Them All Out.
Newt is one of those who went to Washington and became a very rich man, not by producing a damned thing, but instead by manipulation and influence peddling. Thanks to Newt and his time in office we now have less Liberty, less Freedom, and less money.
I wonder if we will ever know how much Newt’s shenanigans actually cost us taxpayers.
9 responses to “Newt’s Ties To Fannie Mae and Freddie Mac Longer, Deeper, More Corrupt than You Thought”
OK knock out Newt and that leaves a 2 candidate race. Who reads all these facts Gary P. J.?
Maybe it does, maybe it doesn’t.
See, Gary P.? Even when I suggest a 2 candidate race you say, “maybe”. That doesn’t make you, or me, right or wrong. MAYBE!!!!!!
Brilliant! Let’s continue to bash Newt so that Romney only has ONE target to destroy, using his millions. Do I have it about right? You could never be a general in the military; you’re not much of a strategic thinker. SP is. She totally gets it. This is why she wants the primary to continue. This ain’t her first rodeo.
Moreover, please tell me why you think Clinton would have signed ANY bill reigning in these GSE’s, since it was Clinton himself that put the housing market on steroids? Good grief, GWB was in the WH with a GOP house & senate and even HE couldn’t get that done. The minority Dems filibustered every attempt. Go over to Naked Emperor News and see for yourself.
I humbly suggest that everyone go over to the PBS site and look up the series Frontline. Once you get there, dig up the video for the documentary titled “The Warning.” It’s free and doesn’t require a signup or anything. Watch the whole thing.
Then come back and bitch about Newt.
We’ve been writing about the housing crisis, how Jimmy Carter teed it up, Clinton supercharged it, and clowns like Newt Gingrich made damned sure no meaningful reform was ever enacted for YEARS.
This isn’t exactly new ground for most of us.
While George W Bush and John McCain were fighting the socialists [and being called racists] while trying to reform Fannie and Freddie [the Republicans tried over 30 times through various legislation] Newt was siding with the corrupt heads of Fannie and Freddie. He got paid well for seeing his soul, and the nation out too!
Newt Gingrich is the most corrupt, sorry excuse for a man ever to enter politics. He’s a Big Government progressive who has ALWAYS stood with the socialists on the big issues. He’s done more to advance the socialist agenda in America than many democrats.
Newt is the EXACT sort of corrupt, insider the beltway, establishment hacks that must be run out of politics forever.
Newt is one of those guys who went to DC broke and became a multi-multi-millionaire.
The kind Sarah Palin’s top man Peter Schweizer wrote an entire book about!
WELL SAID, GARY P. AND I DON’T MEAN MAYBE.
You cleverly avoided my question, which was “Why do you think Clinton would have signed ANY bill reigning in the GSE’s?” You know, the bill that exists between your ears, evidently.
Since you know SP is violently against crony capitalism, do you care to hazard a guess as to why she supports a corrupt, sorry excuse for a man who has done more to advance the socialist agenda than many Democrats?
Evidently, you don’t think much of Sarah Palin or her judgment, either.
Your logic is so flawed it’s hard to take you serious. Clinton never had the chance to sign, or veto legislation, because crapweasels like Newt stood with the socialists to prevent it.
BTW, the Republican Congress overrode more than few of Clinton’s vetoes, so the chance of real reform, had it not been shot in the head, was quite good.
Oh, and what about the fact when Bush was president, and had a Republican Congress that was actively trying to reign in Fannie and Freddie? Where was Newt Quisling? He was a paid shill for Freddie Mac and once again stood with the socialists! When Bush was president, Newt worked hard behind the scenes to twart any reform.
Again, Newt is just as responsible for the collapse of the economy as anyone else in Washington. Newt ALWAYS sides with the socialists. Has been doing it since his earliest days in Congress.
As to Sarah Palin, Her idea was to slow the nomination process, and stop Mitt Romney from just being handed the nomination. I’m a huge supporter of Sarah’s. Have been long before she was the vice presidential nominee. That said, I initially agreed with her strategery. As you should understand she never endorsed Newt, and still hasn’t endorsed a candidate.
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