Big money in Washington
Fannie Mae and Freddie Mac are under the microscope this week as it has been uncovered by the Center for Responsive Politics (CRP) that the two spent over $170 million on political and lobbying operations in the ten years leading up to the housing crash in 2008 when they were near collapse and were seized by the Federal Housing Finance Agency (FHFA) and are now defending the long list of Washington heavyweights that have been on their payroll for years as board members, senior executives, consultants or lobbyists, with the research revealing the majority on payroll were Democrats.
The CRP uncovered that Fannie and Freddie had hired Tom Donilon (President Obama’s national security adviser), and Rahm Emanuel (Obama’s former White House chief of staff), and Bill Daley (Obama’s current White House chief of staff) while they were in the private sector, as well as current Presidential hopeful Newt Gingrich in an effort to protect government ties that allowed the two companies to borrow money from financial markets at bottom dollar.
“It was a mob-like operation,” said a senior congressional official who over the years dealt with the political and lobbying operations at Fannie and Freddie. “They had tentacles everywhere.”
Winding down Fannie and Freddie
“They used to be the near-exclusive domain for Democrats,” said John Taylor, president and CEO of the National Community Reinvestment Coalition. “But both Fannie and Freddie realized the perilous way of that strategy and eventually they began dealing with either party.”
Bipartisan efforts are being made to wind down both firms but no agreement is evident of what to do after they wind down, fueled by critics accusing the firms of fueling the housing bubble in 2008 and already taking nearly $170 billion in taxpayer money from their blank check at the Treasury, recently requesting billions more.