As I’ve said before, despite the hullabaloo from the right, I think the evidence is overwhelming that the risk problems associated with Fannie Mae and Freddie Mac are actually the dog that didn’t bark in the financial meltdown. The problems turned out to be so systematic that even institutions that weren’t operating with Fannie/Freddie-style implicit guarantees both wound up taking unwise risk and wound up leaving taxpayers holding the bag. The things that made Fannie and Freddie special, in other words, wound up not making a difference. Still, the problems with their status were very real and the casual corruption involved disturbing:
When the Washington Nationals played their first-ever baseball game in the nation’s capital in April 2005, two congressmen who oversaw mortgage giant Freddie Mac had choice seats — courtesy of the very company they were supposed to be keeping an eye on. [...] According to confidential company documents obtained by The Associated Press, Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., spent the evening in hard-to-obtain seats near the Nationals dugout with Freddie Mac executive Hollis McLoughlin and four of Freddie Mac’s in-house lobbyists. [...]
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.
Freddie Mac’s chairman and chief executive, Dick Syron, and McLoughlin, senior vice president for external relations, used Clark and Weinstock extensively, Weber said in an e-mail Friday.
And so it worked. Despite the government being in the hands of conservatives who were nominally more hostile to the Fannie/Freddie sweetheart deal, it turned out that the right wing was largely just as willing to be persuaded by Freddie’s money as they would be by any other large business enterprise.
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