Tuesday, September 30, 2008

Important mortgage mess info and links

Amac is another of those “great bloggers who don’t blog.” He’s sent along two electronic letters bearing on the mortgage mess. Excerpts from them follow in plain text with a few of my comments interspersed in italics.

Amac has my thanks for pulling important information and links together and sharing them with us.



The C-SPAN video linked below is the same one I posted yesterday. I’ve watched it three times. I learn more each time I view it.There's no doubt that every Dem on in the video was just fine with Freddie and Fannie and only upset with the oversight official who was telling them there were serious problems at both. I’m disgusted more each time I see the House Dems play race politics, attack a white government official whose doing a good job , and then pander to and praise Fannie Mae chief Franklin Raines who there’s ample evidence deserves to be hauled before a grand jury, placed under oath and asked questions about his very possibly criminal activities while head of Fannie.

This video has clips from a subcommittee hearing held on Oct. 6, 2004. "THE OFHEO REPORT: ALLEGATIONS OF ACCOUNTING AND
Committee on Financial Services -- Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

Clips of CSPAN video of the hearing

The following article Amac provides is a perfect follow-up to the C-SPAN video.

Armando Falcon Director, Office of Fed. Housing Enterprise Oversight

Top Regulator of Fannie Mae and Freddie Mac to Depart


NYT, April 6, 2005 - Armando Falcon Jr., the top regulator of Fannie Mae and Freddie Mac, the two mortgage finance giants that have struggled through accounting scandals, announced on Tuesday that he would step down next month after a tumultuous tenure of nearly six years.

Mr. Falcon was a little-known Washington lawyer and former Congressional aide when he was appointed by President Bill Clinton in 1999 to head a small agency, the Office of Federal Housing Enterprise Oversight, known as Ofheo. He and his agency were often the target of political attacks by Fannie Mae and Freddie Mac and were ridiculed by lawmakers who viewed the office as ill-equipped to oversee such large companies.

Perhaps the lowest point in his tenure came in 2003, when his agency declared that Freddie Mac had effective auditing and internal controls shortly before the company disclosed that shortcomings in its accounting had caused it to misstate earnings by billions of dollars over several years.

But Mr. Falcon was ultimately vindicated, first by his aggressive handling of the problems at Freddie Mac that resulted in a major management shake-up and other institutional changes, and then last December, when the Securities and Exchange Commission agreed with his central conclusion that Fannie Mae had violated accounting rules.

In the months leading up to the S.E.C.'s decision, Mr. Falcon steadily steered Ofheo through a thicket of criticism, much of it orchestrated by Fannie Mae. The decision by the chief accountant of the commission prompted the resignations of Fannie Mae's two top executives, Franklin D. Raines and J. Timothy Howard, and in recent weeks the company has acquiesced to every demand of its regulator.

Mr. Falcon, a 44-year-old native of Texas, was a top aide to Representative Henry B. Gonzalez, a Texas Democrat, when Mr. Gonzalez headed the House Banking Committee. In a letter to President Bush, Mr. Falcon said that he was proud of his agency's achievements and that he would step down on May 20, "absent extraordinary circumstances."

Amac’s link to OpenSecrets, a site sponsored by the Center for Responsive Politics, will lead you to all sorts of interesting information as Amac demos with his list of top recipients of Freddie and Frannie money.

OpenSecrets: All Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008

Richard Baker R-La -- not listed
Ed Royce R-Ca -- #48, $28,600
Christopher Shays R-Ct -- way down, $2,500
Don Manzullo, R-Il -- way down, $250
Maxine Waters D-Ca -- #80, $17,800
Gregory Meeks D-NY-- #104, $14,000
(William) Lacy Clay D-Mo -- #127, $10,250
Artur Davis D-Al -- #111, $11,750
Barney Frank D-Ma -- #26, $42,350

The dirty hands at the top of this list make for interesting, somewhat bipartisan reading. Obmama is #2 at $126,350, By contrast, McCain comes in at #62, $21,550, and Biden way down at $3,300.


smrstrauss said...

I also looked at OpenSecrets.org.

and I find that for the period 1990 to early 2008, Freddie Mac gave a total of $9.76 to political candidates, 57% to Republicans and nearly 43% to Democrats (some contributions to "independents.")

Moreover, the entire financial services industry was a major contributor during the period, giving some $2.09 BILLION to political candidates, 55% to Republicans and only 44% Democrats.

And the American Bankers Association" : $20.04 million over the 1990-2008 period, 59% to Republicans.

And, since you imply that the contributions influenced the votes, guess which party Enron and Exxon made most of their contributions to -- you're right, the Republicans. (Exxon gave 86% to Republicans.)

There's nothing wrong with giving money. Your posting has simply implied unfairly that the contribution led to votes on a particular issue. If so, well, you are wrong, Freddie Mac gave most of its money to Republicans.

Anonymous said...

And you'll never hear any of this on MSM outlets. I'm very surprised the NYT carried anything--it must have been on the bottom of page A87. AMAC is owed a big round of applause as is JinC.
Tarheel Hawkeye

Anonymous said...

Good work exposing the bureaucrats at Freddie and Fannie, and their co-conspirators.

This morning I happened to hear three interviews on NPR* about the "failed" bailout bill. The interviewees #1 NT Times
#2 Two economists
#3 Bureaucrat in charge of the small business bureaucracy.

Interviews #1 and #2 boiled down to 'government come save us!'

Interview #2, with two economists boiled down to 'the bailout is a very very bad idea' 'Let the market correct itself' 'We do not have a free market due to government manipulation and attempts to control the economy.' 'What we are hearing (about the free market) is rubbish.'

In all three interviews the NPR Critter led with words like 'crisis' 'meltdown' 'tragedy' 'greed' 'tsunami' 'destruction' 'dire' and so on.

*NPR - National P[rogressive- government come save us] Radio

Anonymous said...

Correction: TYPO - That should say Interview #1 and #3 were all 'government come save us.

Interview #2 with the economists actually made sense.

AMac said...

smrstrauss --

Thanks for doing more digging. The more we know of who got (gets) money from whom, the clearer understanding we'll have of politics and policy-making.

I think that (1) the amounts that OpenSecrets records Fannie Mae as contributing to the pro-Fannie Congressmen are mostly quite modest, and (2) it's notable that the Fannie skeptics also got contributions. So I don't view this as an instance of votes-for-money corruption. Instead, it seems likely that Raines' enablers acted as they did for ideological reasons, and the contributions followed.

But as for appearance of impropriety... why were subcommitteee members taking any such funds? And why were any taxpayer dollars spent by these GSE executives on lobbying?

- - - - -

Pat at Stubborn Facts has three worthwhile posts today. The titles are self-explanatory.

Rewarding Bad Judgment
The Foreseen Crisis

That last link goes to a comment authored by former Congressman Richard Baker, featured on the video. H/t Patterico.