Business How Fannie, Freddie Became Kings Of The Hill by Peter Overby Listen Now [4 min 34 sec] add to playlist
Power And Influence Fannie Mae and Freddie Mac have counted Washington powerbrokers as board members and exectutive staffers past and present. Here, a look at the biggest names.
The Government Steps In The Treasury Department unveiled a three-part rescue plan to bolster housing finance giants Fannie Mae and Freddie Mac. The plan aims to calm jittery investors while enabling the two government-chartered companies to remain public companies.
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Morning Edition, July 15, 2008 · Homeowners might think of Fannie Mae and Freddie Mac as just the big dogs of the mortgage business, but in Washington, D.C., they're known as big players in lobbying. The two companies managed to stave off government regulation for years by lobbying hard — and spending generously.
In the first three months of the year alone, Fannie Mae and Freddie Mac spent a combined total of about $3.5 million on lobbying and hired 42 outside firms. Their lobbying reports were analyzed by the Center for Responsive Politics.
That kind of clout, coupled with huge mortgage portfolios reaching into every corner of the country, illustrates why they have never lacked for confidence on Capitol Hill.
Former Rep. Jim Leach (R-IA) is an old nemesis of Fannie and Freddie. In Congress, he helped lead efforts to rein them in.
"There've been a lot of rhetorical efforts to tighten regulation, but Fannie and Freddie have both done a pretty deft job of fending that off," Leach says. "Muscular" is another word he uses to describe those efforts.
Fannie and Freddie have kept their profiles high because of their odd situation: They're not government agencies, but they're not regular corporations either. As government sponsored enterprises, or GSEs, they're often thought to have guarantees of federal support. It lets them get discounts when they borrow money.
To maintain that advantage and others, they hire well-placed politicos for big salaries.
A rival lobbyist once described Fannie Mae as a political organization that happened to be in the mortgage business.
Past executives include Democratic operatives and appointees. Former CEO Jim Johnson made headlines last month after reports that he may have received preferential treatment in real estate deals forced him out as head of Illinois Sen. Barack Obama's vice presidential search team.
It's a similar story over at Freddie Mac: Former Rep. Susan Molinari (R-NY) is a contract lobbyist, and Democratic operative Harold Ickes used to be on the board.
And the two GSEs are famous for campaign contributions to both parties.
Leach, who is now the director of Harvard University's Institute of Politics and chairman of the watchdog group Common Cause, says he finds that especially troubling.
"They have done an awful lot in terms of the money game that have caused the kinds of conflicts of interest that have bedeviled the American political system," he says.
In 2006, Fannie farmed out almost a million dollars in contributions, while Freddie forked over more than $600,000. That same year, the nation's biggest lender, Countrywide, gave $250,000.
The GSEs also raise money from others. Five years ago, a Freddie Mac document described an 18-month push by the company's lobbyists in which they held more than 75 fundraising events for members of one House committee.
Freddie Mac later was forced to pay the Federal Election Commission a record-setting $3.8 million fine.
Even now, Fannie Mae and Freddie Mac's recent troubles may not dim their influence on Capitol Hill, says Mike House, director of FM Policy Focus, a lobbying group that's campaigned for years to regulate the GSEs more strictly.
"They'll have clout because of the role they have," House says. "Whether it's more or less, we'll just have to see."
The GSEs are waiting to see, as well. Spokespeople at Freddie Mac didn't return requests for comment Monday. And executives at Fannie Mae weren't talking.
Election 2008 Political Networks Of Fannie Mae And Freddie Mac by Will Evans
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Doug Mills James A. Johnson speaks in Washington, D.C., on Sept. 18, 1990. The former Fannie Mae CEO was vetting potential vice presidential picks for Sen. Barack Obama until he was forced to step down after news reports suggested he got favorable treatment from a mortgage lending company. AP
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Tyler Mallory Then-FBI Director Louis J. Freeh (left) and former President George H.W. Bush take part in a 1998 ceremony in Washington, D.C. AP
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Kevin Wolf Harold Ickes, a former adviser to President Clinton, speaks at a news conference at the Democratic National Committee Rules and Bylaws Committee hearing in May in Washington, D.C. AP
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Marcy Nighswander In this 1992 photo, then-Democratic presidential candidate Bill Clinton speaks with Rahm Emanuel (right), a Democratic Party official, upon arriving at a hotel in Washington, D.C. AP
http://NPR.org, July 14, 2008 · Fannie Mae and Freddie Mac have both had strong ties to the Washington, D.C., political community. The housing finance giants have counted government power brokers as board members and executive staff. Here, a look at key players, past and present.
Fannie Mae
James A. Johnson, former chairman and CEO: Aide to Vice President Walter Mondale; recently led Sen. Barack Obama's vice-presidential search team
Jamie Gorelick, former vice chairwoman: Deputy attorney general under President Bill Clinton; former Defense Department general counsel; member of 9/11 Commission
Franklin D. Raines, former chairman and CEO: Budget director under Clinton
Thomas E. Donilon, former executive vice president: Former assistant secretary of state under Clinton; senior adviser to Michael Dukakis' presidential campaign; national campaign coordinator for Walter Mondale's presidential campaign; congressional liaison for President Jimmy Carter.
Robert B. Zoellick, former executive vice president: Former deputy secretary of state and U.S. Trade Representative under President George W. Bush; currently president of the World Bank
Louis J. Freeh, board member: Director of the FBI under Clinton; federal judge
Stephen Friedman, former board member: Assistant to Bush for economic policy
Michele Davis, former senior vice president: Deputy assistant to Bush; currently assistant secretary of the Treasury.
Wayne Berman, outside lobbyist: Assistant Secretary of Commerce under President George H.W. Bush; senior adviser in Bush-Cheney presidential transition; currently a fundraiser for Sen. John McCain's presidential campaign.
Steve Ricchetti, outside lobbyist: Deputy chief-of-staff to Clinton
Kirsten Chadwick, outside lobbyist: Special assistant to President George W. Bush for legislative affairs; currently a fundraiser for McCain's campaign.
Freddie Mac
Richard F. Syron, chairman and CEO: Deputy assistant secretary of the Treasury
Ralph F. Boyd Jr., executive vice president: Assistant attorney general for civil rights
Dennis DeConcini, former board member: U.S. senator from Arizona
Robert R. Glauber, board member: Undersecretary of the Treasury under President George H.W. Bush
David J. Gribbin III, former board member: Aide to Vice President Dick Cheney; assistant secretary of defense under President George H.W. Bush
Harold Ickes, former board member: Adviser to President Clinton and Sen. Hillary Clinton; member of the Democratic National Committee.
Rep. Rahm Emanuel, former board member: Senior adviser to President Clinton; former chairman of the Democratic Congressional Campaign Committee and chairman of the House Democratic Caucus.
Susan Hirschmann, outside lobbyist: Chief-of-staff to former House Majority Whip Tom DeLay of Texas
Michael J. Bates, outside lobbyist: Campaign official for President Reagan, presidential candidate Bob Dole, President Bush.
Martin Paone, outside lobbyist: Secretary of the Senate
J. Patrick Cave, outside lobbyist: Acting Assistant Secretary and Deputy Assistant Secretary of the Treasury
Susan Molinari, outside lobbyist: U.S. Congresswoman from New York
Will Evans is with the Center for Investigative Reporting.
Poster Comment:
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Crooks that run Fannie Mae and Freddie Mac !