Don't repeat Fannie, Freddie mistakes (title useless - campaign contributions buried story)

CNN ^ | Peter J. Wallison

[Lorianne]

In announcing the takeover of Fannie Mae and Freddie Mac, Treasury Secretary Henry Paulson noted that the "flawed business model" of these companies was in part responsible for their failure.

But these warnings were ignored in Congress. Although there were efforts by a number of Republicans in the House and Senate to adopt tougher regulatory legislation -- beginning in 1999 -- these efforts were resisted by Democrats, primarily Sen. Charles Schumer of New York and Sen. Chris Dodd of Connecticut, who is currently the chairman of the Senate committee with jurisdiction over the GSEs.

John McCain was one of the Republicans who supported GSE reform, but he and the others faced an insurmountable defensive phalanx in Congress -- the result of a strong lobbying and political support program engineered and operated over many years by Fannie Mae and Freddie Mac.

Among other things, Fannie and Freddie orchestrated substantial contributions to the campaign funds of their congressional supporters. [Of course CNN does not name names] They hired some former congressional staff members as lobbyists and engaged lobbying firms that had strong relationships with members of Congress, including lobbyists who are active in both of this year's presidential campaigns

[Lorianne]

I've heard that Clinton, Dodd, Kerry and Obama received the largest of these campaign 'contributions' from Fannie and Freddie. Can anyone help coroborate that?

I'm sure there were Republicans on the goodie bag list as well.

Can anyone help me find this info?

[cincinnati65]

According to OpenSecrets.org, from 1989-2008 the top 4 recipients of Fannie Mae/Freddie Mac campaign contributions were 1. Christopher Dodd, 2. John Kerry, 3. Barack Obama, and 4. Hillary Clinton.

[realdifferent1]

...these efforts were resisted by Democrats, primarily Sen. Charles Schumer of New York and Sen. Chris Dodd...

Add Barney Frank of Massachusetts to this list.

[ken21]

the la times says obamao got the most—$112,000.00:

http://www.ntu.org/main/press_release.php?PressID=564&org_name=NTU

http://www.latimes.com/news/politics/la-na-trailmoney9-2008sep09,0,1969729.story

[Lorianne]

I could not find it at that site. Do you have a direct link?

If true that Obama was one of the big 4 receivers of donations from Freddie and Fannie, the word should get out.

Thanks

[Lorianne]

Thanks

[ken21]

you’re welcome.

the wsj today had an editorial excoriating barney frank.

in their analysis, the fanny/freddy mess owes to his meddling for decades.

[cincinnati65]

http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html

[Lorianne]

Thanks!

[ckilmer]

I heard on Rush today that HUD back in the 90’s under Andrew Cuomo mandated that freddie and fannie had to make loans to low income households–ie high risk households. And this on top of the loans to low income neighborhoods (ie high risk loans) fostered by the Community Reinvestment Act 1979.

The CDO concept was developed by (convicted) Michael Milken of (now-defunct) Drexel Burnham Lambert. After the securities scandal, the vehicle lay dormant until picked up by the mortgage industry around 1999/2000. CSPAN aired an interview with a journalist who looked into the subject; took more than a few calls from some articulate folks who objected to placing the blame on Fannie/Freddie for exactly the reason I stated. The CDO package - courtesy of Mikey Milken - is flawed.