Thursday, November 17, 2011

Newt Gingrich Got Millions from Freddie Mac and Claims (A) He Doesn’t Know How Much, (B) This was for advice as a Historian and (C) He Did Not Act as Lobbyist

Sorry Mr. Gingrich, You are Wrong on A, Wrong on B and Wrong on C

Now that he is enjoying what looks like to be no more than 15 minutes of fame as a leading candidate for the Republican Presidential nomination Newt Gingrich is finding that his past activities are coming under scrutiny and that his famous ability to spin his way out may not fly with the increased attention that a possible Presidential nominee gets.  The current issue is about monies paid by Mr. Gingrich by Freddie Mac, the housing lender and guarantor who messed up so badly it is now a ward of the Federal government requiring tens of billions of taxpayer support.

The issue first surfaced in a debate involving Mr. Gingrich and his fellow aspirants (no, don’t ask which one, there have been far too many to pin down just one). He answered a question relating to payments of about $300,000 this way.

Gingrich sought to explain his role at Freddie Mac as that of an “historian” sounding dire warnings about the company’s future. He said Freddie Mac officials told him “we are now making loans to people that have no credit history and have no record of paying back anything, but that’s what the government wants us to do.” He said his advice was to tell them, “this is insane.”

Now there are a couple things worth commenting here.

  1. You don’t employ a former Speaker of the House for his expertise in history.  You employ him to lobby.  Great historians are in fact available at a small fraction of what was paid Mr. Gingrich.  See historians don’t make a whole lot of money, mostly they are historians for the joy (which is considerable) of being historians.  So if Freddie wanted a historian, they could have gotten a real one for a fraction of what they paid Mr. Gingrich.

  1. You don’t employ a person with Mr. Gingrich’s background in housing finance for strategic advice, because Mr. Gingrich has no background in housing finance.

Barney Frank, Master Of Disguise

Thanks to Paul Krugman!

Who knew he could manage
 to look like this?

  1. Once again there is confirmation that if there was any pressure put on agencies like Freddie Mac to make loans to low income people, that pressure came from the Bush administration, not from Democrats, contrary to what Republicans and Conservatives continue to promote as truth.

But wait, there’s more.    Mr. Gingrich did not receive just $300,000, he received millions.  How much, well Mr. Gingrich won’t say.

Gingrich said he didn’t remember exactly how much he was paid, but a former Freddie Mac official said it was at least $1.5 million for consulting contracts stretching from 1999 to 2007. The official spoke on condition of anonymity to discuss a personnel matter.

And it is surprising that a person who has such great expertise in finance that he was paid millions for advice cannot know even how much he was paid.

As for Mr. Gingrich’s claim that he was not hired to lobby

Former Freddie Mac executives dispute Gingrich’s description of his role. 

Four people close to Freddie Mac say he was hired to strategize with his employer about identifying political friends on Capitol Hill who would help the company through a very difficult legislative environment. All four people spoke on condition of anonymity to be able to discuss the personnel matter freely.

And Freddie Mac was certainly doing a lot of spending on lobbying

Before Gingrich was hired, Freddie Mac paid $2 million to a Republican consulting firm to kill legislation that would have regulated and trimmed both companies.

The $2 million was money well spent. The legislation died without ever coming to a vote on the Senate floor. But the danger of regulation wasn’t dead, so Freddie Mac hired more consultants, Gingrich among them.

Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006, all of them former Republican lawmakers and ex-GOP staffers. Besides Gingrich, the hires included former Sen. Alfonse D’Amato of New York, former Rep. Vin Weber of Minnesota and Susan Hirschmann, the former chief of staff to ex-House Majority Leader Tom DeLay, R-Texas.

So, sorry Mr. Gingrich, as far as scrutiny of your personal history is concerned this is just the beginning.  And your words about this, which were

“If three or four weeks from now, I have confronted the scrutiny, as you put it, in an even-keeled way, then they’ll be able to relax and go, ‘Oh, he was certainly even-keeled,’” Mr. Gingrich said. “If I blow up and do something utterly stupid, they’ll be able to say, ‘Gee, I wonder who the
next candidate is?’”

say maybe Mr. Gingrich is not off to a good start.  In fact Mr. Gingrich, try to avoid that scrutiny thing.  You won’t like it.

And as far as the proper role for a Presidential aspirant receiving money from Freddie Mac and Fannie Mae Mr. Gingrich has said this

In 2008, Gingrich suggested in a Fox News interview that then-presidential candidate Barack Obama should have to return campaign contributions he had received from executives of Freddie Mac and Fannie Mae. He said that in a debate with Obama, GOP presidential nominee John McCain “should have turned and said, ‘Senator Obama, are you prepared to give back all the money that Freddie Mac and Fannie Mae gave you?’”

So the next time we see Mr. Gingrich we will ask him if he is prepared to give back all the money those two companies gave him.  Actually we won’t because everyone already knows the answer to that question, don’t they.

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