To the People

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Monday, December 08, 2008

How Fannie n' Freddie Entertained Their Elected Overseers

The Associated Press put out a good, if infuriating, story explaining exactly how those entities managed to get the elected officials that were supposed to be overseeing them eating out of their hands instead:
WASHINGTON – From a hefty lobbying budget to the use of free baseball tickets, Freddie Mac fended off any meaningful regulation in the years before the housing mortgage giant crashed, records obtained by The Associated Press show.

When the Washington Nationals played their first-ever baseball game in the nation's capital in April 2005, two congressmen who oversaw Freddie Mac had choice seats — courtesy of the very company they were supposed to be keeping an eye on.

Efforts to tighten government regulation were gaining support on Capitol Hill, and Freddie Mac was fighting back.

According to internal Freddie Mac documents obtained by the AP, 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. The two congressmen were both members of the House Financial Services Committee.
Okay, so the congressmen could be bought, but at least they weren't cheap. Oh, no, wait. They were:
The ticket to attend the opening game of the Washington Nationals was valued at less than $50, which was the congressional gift limit at that time, Kanjorski said in a statement Monday.

The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time.
At least this corrpution didn't hurt the rest of us. Oh, no, wait. It did:
The tactics worked — for a time. Freddie Mac was able to operate with a relatively free hand until the housing bubble ultimately burst in 2007.

Now Freddie Mac and its sister company, Fannie Mae, are in financial collapse and under government control. Congress is investigating how it all happened. Lawmakers have planned a hearing Tuesday.
Oh, and guess who is one of the leading whores:
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.

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