Thursday, October 16, 2008

Fannie, Freddie, and the Left

By John Perazzo

As evidenced by Barack Obama’s rise in the polls immediately following the financial collapse of mortgage giants Fannie Mae and Freddie Mac, few Americans understand that for many years Fannie and Freddie have been, first and foremost, tools of Democratic politicians, funders of the Democratic Party, and, in the words of a former Fannie CEO, the intimate “friends” and “family” of the Democratic Party’s left wing.

Nor are most Americans aware that Fannie and Freddie, through their eponymous grant-making foundations, have funneled literally hundreds of millions of dollars in recent years to a host of leftist groups and causes that work to promote Democratic agendas, causes, and policies. To set the record straight, it is worthwhile to examine the connections between Fannie, Freddie, and the Democratic Party.

A full account of the recent financial collapse of Fannie Mae and Freddie Mac must consider the role of the Clinton administration. As early as 1993, Clinton’s first year in office, Housing and Urban Development Secretary Henry Cisneros and Attorney General Janet Reno expressed dismay over reports that the rejection rate of black mortgage applicants nationwide was considerably higher than that of their white counterparts. In response, Reno warned that thenceforth “no bank” would be “immune” to an aggressive Justice Department campaign to punish such “discrimination” in the lending market. For emphasis, then-Assistant Attorney General Deval Patrick pledged to work for the elimination of all racial disparities in mortgage lending rejection rates.

A careful look at the facts revealed, however, that those disparities were not actually due to discrimination of any kind. Instead, they reflected the realities of borrowers’ credit-worthiness, as determined by such objective factors as credit history, debt burden, income, net worth, age, and education.

But the political champions of “racial justice” in the Clinton White House were not interested in these facts. So instead of permitting this information to change their outlook on the issue of mortgage lending, they moved ahead with their crusade to inject new energy into the so-called Community Reinvestment Act of 1977, which, according to President Clinton, had failed to live up to its potential as a vehicle for increasing minority homeownership. Thus began the government policy of forcing lenders, under threat of severe sanctions, to make subprime loans to high-risk borrowers who failed to meet traditional loan criteria. It was a policy guaranteed to create a crisis. The only question was when.

Now that the crisis has arrived, Democratic finger-pointing has become the order of the day. Leading the charge, Barack Obama not only blames Republicans, but tacitly blames capitalism as a whole, referencing it by the pejorative code name of “trickle-down” economics. Yet, Obama makes no mention of the fact that the Bush administration exhorted Congress for years to set up an agency to regulate lending institutions like Fannie Mae and Freddie Mac. Nor does he mention that John McCain demanded similar oversight, only to be rebuffed by Democrats like House Financial Services Committee Chairman Barney Frank, who continued to favor the issuance of the subprime loans that have now caused the mortgage market to collapse.

Since the 1990s, indeed, Fannie Mae and Freddie Mac have been in the Democratic Party’s hip pocket. From 1991 to 1998, for example, Fannie Mae was headed by James Johnson, a longtime aide to former Democratic vice president Walter Mondale. While dutifully following the Clinton administration’s aforementioned mandate, and thereby helping to run the mortgage lender into the ground, Johnson himself earned tens of millions of dollars in his Fannie Mae post, including $21 million in 1998 alone. Johnson made headlines this past summer when Barack Obama tapped him to chair his vice presidential selection committee. Johnson had to resign in disgrace from that position when it was revealed that he had taken at least five below-market real estate loans totaling more than $7 million from Countrywide Financial Corporation.

Johnson’s successor as Fannie Mae’s head, Franklin Raines, had previously served as a budget director to President Bill Clinton. During his years at Fannie’s helm between 1999 and 2005, Raines, while continuing the ill-advised policies that ultimately would bankrupt the company, pocketed nearly $100 million in compensation before leaving under a cloud of scandal. It seems that Raines had manipulated profit-and-loss reports so as to enable himself and other senior executives to earn enormous bonuses on top of already-high salaries – in 2003 alone, Raines received $16.8 million in cash compensation – even as the financial empire he oversaw was imploding.

Another Fannie Mae luminary was Jamie Gorelick, who served as vice chair of the mortgage lender from 1998 to 2003. Prior to that, she had been Janet Reno’s Deputy Attorney General during precisely those years when the Clinton Justice Department was aggressively compelling banks to make subprime loans to unworthy borrowers. That experience gave Gorelick valuable training for her future post at Fannie Mae, where she ultimately would increase her personal net worth by $26 million.

While the foregoing Democrats collected obscene sums of cash as reward for their complicity in the subprime mortgage debacle, by no means were they the only beneficiaries of Fannie Mae and Freddie Mac money. Between 1989 and 2008, no fewer than 354 members of Congress received funds from Fannie and Freddie. Of those, 209 were Democrats who pulled in a combined $4.84 million. The leading recipient of Fannie/Freddie money was Connecticut Democrat Chris Dodd, the Banking Committee Chairman who collected more than $165,000. Dodd opposed oversight of Fannie and Freddie and pushed hard for the continuance of subprime mortgage loans. In second place was Barack Obama, who, in just three years in the U.S. Senate, raked in $126,000. Third was Massachusetts Democrat John Kerry, with $111,000.

Republicans, too, deserve a measure of criticism. Some 143 of them received Fanny and Freddie funds totaling just under $3.02 million. Utah Republican Robert Bennett, a Senate veteran, led the GOP with $107,999 in total contributions from the mortgage giants. Two independents also took in over $28 thousand.

As further evidence of the Democrats’ role in the credit crisis, consider Fannie Mae’s intimate relationship with the Congressional Black Caucus (CBC), which represents the far-left of the Democratic Party. At a 2005 ceremony, Fannie Mae’s interim CEO Daniel Mudd told the CBC (of which Barack Obama was a new member) how deeply he valued “the friendship and partnership between Fannie Mae and the Congressional Black Caucus.” Mudd referred to the CBC not only as “good friends to Fannie Mae and our mission,” but also as Fannie Mae’s “family” and “the conscience of Fannie Mae.” (For a video of Mudd’s remarks, click here.)

Such ties represent merely the tip of the iceberg. To gain a fuller appreciation for just how closely the mortgage companies were allied with the Democratic Party and its surrogates, one might look at the grant-making arms of Fannie and Freddie — specifically, the Fannie Mae Foundation and the Freddie Mac Foundation. The former was established in 1968, the latter in 1991. Together, they hold combined assets exceeding $285 million, and each year they give tens of millions of dollars (nearly $89 million in 2006 alone) in grants to predominantly leftwing organizations that promote a host of pro-Democrat agendas. Among the groups supported by Fannie and Freddie are the American Civil Liberties Union; the NAACP and the National Urban League; left-wing financier the Tides Foundation; pro-illegal immigration groups like the Mexican American Legal Defense & Education Fund, the National Immigration Forum, and the National Council of La Raza; pro-Democratic community activist groups like the Association of Community Organizations for Reform Now (ACORN), the Center on Budget and Policy Priorities, the Center for Community Change, and the Alliance for Justice; feminist organizations like National Organization for Women and the National Women’s Law Center; and former president Jimmy Carter’s Carter Center. A comprehensive list of liberal, leftist, and pro-Democratic Fannie and Freddie grantees would fill an entire book.

During last week’s presidential debate, John McCain made a point of observing that Senator Obama and his fellow Democrats had long “defended what Fannie and Freddie were doing” and had blocked all efforts at reforming the now-notorious institutions. Obama parried the charge by insisting that American voters were “not interested in hearing politicians pointing fingers.” Obama’s defensiveness is understandable. If Americans took the time to examine the issue, they would discover that much of the blame for the current crisis belongs to the Democratic Party.


15 comments:

SNAKE HUNTERS said...

*****THE BIG LIE*****

We've all heard the hateful sing-song mantra of "Failed Bush Policy"
1,000 times in Tv Ads...

"Four More Years...8 More Years" blah, blah, blah. It's embedded in our brains.

*****THE GREAT SWINDLE BEGINS*****

IT BEGAN, not during the Bush Terms At All...but with Prez Bill Clinton's Housing Secretary Henry Cisneros and U.S. Att. General JANET RENO's Justice Department, and the C.R.A. (Carter Term) in 1977!

Read It Again, then Print it, and pass it around to neighbors & friends!

Then Cast Your Ballot On Nov 4th

We Just Cannot Afford Four More Years Of A REID/PELOSI CONGRESS!

reb
________________________________
www.lazyonebenn.blogspot.com

Anonymous said...

__________________________________
WHAT YOU CAN DO...

SEND THIS JOHN PERAZZO ARTICLE TO
EVERYONE IN YOUR eMAIL CONTACT LIST...ALL STATES, RIGHT NOW!
__________________________________

Anonymous said...

OBVIOUSLY-- These actions by leftist Democrats was an attempt to do two things...Solidify their voter support among minorities and MORE SCARY....destroy our system
financially and capitalistically!!!
This strategy is called Cloward-Bivens Strategy...which was the basis for the ACORN founders and now we see for most leftists...
They know what it is and that disruptions will lead to "change" and more quickly to a socialist state! IF they can destroy a simple person like Joe the Plumber in 24 hrs....Why haven't the Media attacked the leftist polititions...HINT we are screwed!

RJ,O.R, TN

SNAKE HUNTERS said...

The Politics Of Anger...

Send This Message Out; John Perazzo's Hard-hitting, No Nonsense

"Fannie, Freddie, and the Left"

It Must Reach 50 States; Do Your Part.

Time Is Of the Essense! reb
_________________________________
www.lazyonebenn.blogspot.com

Yankee Doodle said...

What do you think about the fundamentals of our economy, Snake Hunters?

SNAKE HUNTERS said...

Y.D.

Read Carefully S/H Oct 16th Post.

The destruction of the Capitalist System began under Bill Clinton's
tenure, with Sec Henry Cisneros and Attorney General Janet Reno. They bullied Top U.S. Bank Officials into lowering standard mortgage loans to "no down payment status" and the "sub-prime" high interest rate scam went into high gear. Soon, everybody wrote "bad paper" to help "poor folks" get into homes they couldn't afford to rent!

The bubble burst was inevitable;
it happened last month, the stock market took a nose-dive, home equities cut in half, pensions for elderly in jeopardy...The people lost a Trillion Dollars One Night!

Baloney & Hogwash.

Blame 'Failed Policy' of George Bush!
Yeah, sure.

Read It. Post It! Find more Hard Evidence in FrontPageMag.com under "Columnists" tap John Perazzo
(he's my favorite guy since I began blogging); he names the crooks in Congress, and who got the MONEY...

like Sen Chris Dodd, Barney Frank, Sen John Kerry and Barack Obama! These are not just any old garden-variety goofy "liberals" young man;
these are Top-Draw Sleaze-balls!

The Democratic Party I once knew Is Gone! George Soros bought it. The "Grass-roots" Democrat...you call 'em "Libs"... is just beginning to see what happened.

Good luck, Yankee Doodle! reb
_________________________________
www.lazyonebenn.blogspot.com

Anonymous said...

McCain/Palin Chances Are Bleak;

Only possibility now rests with the faint hope that All Over-40ish 'Grassroots Democrats' Suddenly Realize That Their Old Party Has Vanished. It's Gone South, with poor old exhausted liberal, Joe Lieberman.

And All Latino Voters cast their ballots for "Jose el Plumbero"!!

Adios, Honest Elections.

Old Robert, from Oak Ridge, Tenn

Anonymous said...

Albert said,

Why is this fellow "Joe The Plumber" so Popular? Well, maybe its because he is symbolic of the small business man, or contractor that works 60 or 70 hours a week to build his small enterprise into
a larger one.

Maybe it's because "Joe" is the FIRST MAN to get Obama to Admit on television that his policy is to Tax The Producer, then give Freebies to the non-producer.

Obama's words: "to spread the wealth around" Whoops! Gotcha B.O. Plenty! Big Faux Pas. That stinks!

-Greybeard-

SNAKE HUNTERS said...

Sunday, October 19, 2008
Gen Powell Endorses Skin-Color!
__________________________________

Today, a gentleman and a scholar that I believe should have been the
Democratic Party nominee, endorsed an Unqualified Chicago Political Slicker with No military saavy, and No Executive Experience to be our next Commander-In-Chief!

(I would have voted for Gen Powell without hesitation). I'm mystified.

Gen Colin Powell has endorsed this fellow; he's voted for skin-color...what else?

What a revolting development! reb
_________________________________
www.lazyonebenn.blogspot.com

Yankee Doodle said...

Snake Hunters, someone has a question about your assertions on my comment page of "Random Thoughts".

SNAKE HUNTERS said...

Yankee D. The M-R never has the courage to voice his hard-core socialist views on our open forum; he'd get a swift and reasoned response, and he knows it! So, he takes his 'cheap shot' from the safety of your post instead. (He does the identical thing on Barb-wire).

If you'd like to get a hysterical response from him, Post "Fannie, Freddie, and the Left" by John Perazzo, and this clown will start
foaming at the mouth! Guys like this hate 'Fact-Based Evidence'. reb

SNAKE HUNTERS said...

Gen Powell said Barach Obama is a "trasformational" figure. So just how scary is that fellow with these closest of all "associates"?

Bill Ayers - Unrepentant bomber
Ayers Wife - FBI's 10 "Most Wanted"
Frank Marshall Davis - Communist
Tony Resko - Jailed Slum Lord

Rev Jeremiah Wright - 20 years
Father Mike Plueger, priest
Rev Louie Farrakhan, 'Nation of Islam'. All Three Hate Whitey & Jews, All Hate America.

Long ties to A.C.O.R.N. Voter Fraud Artists. Fanny Mae & Freddie Mac, and A Corrupt Democratic Congress that took "contributions" from George Soros. Lending Institutions like Fannie Mae's Franklin Raines that skimmed 90 million bucks before being fired.

'Transformational' friends? You bet your life! Risky? I'd say so. A Smooth-As-Glass...Super CON-MAN? Yep, that's Barry Obama!

No Business or Executive Experience; No Military Training.
That's right, NONE! Foreign Affairs
Complex Negotiations? None.

Too risky? You decide. reb
_________________________________
www.lazyonebenn.blogspot.com

edward Oak Ridge said...

It is interesting that most liberals and communists (as many are one in the same) ague that the reason we have failures is that we have too little regulation. It doesn't seem as though we had any problem until they decided to meddle in the system. Now one candidate claims he will add more regulations and I can assure you that the interest of his government will be a very socialist driven type of "fairness". God help us all!

edward Oak Ridge said...

I have had it with all of these communist/liberals and their accusations that our system is broken because we do not regulate it enough. We didn't have a problem until they began to screw with it in the first place. How far are Americans willing to let these people go before we snatch our freedoms and responsibilities away from these parasites?

Yankee Doodle said...

Thank you!