Evidence Suggests Gingrich Was Right – Freddie Mac Refused His Advice

by Ulsterman

Documents obtained via a Congressional investigation into both Freddie Mac and Fannie Mae point to a possible rift between Former House Speaker Newt Gingrich and Freddie Mac during Gingrich’s eight years as a consultant for the home mortgage giant.



In a recent GOP debate, presidential hopeful Newt Gingrich admitted to working as a consultant for Freddie Mac, an institution now mired in debt and in need of continued taxpayer bailout funds in order to survive. A recently released report by Bloomberg shows that while Speaker Gingrich was acting as an off again on again consultant up until 2008, no lobbying was done by Gingrich on behalf of Freddie Mac.

Last week Gingrich declared he was providing input to Freddie Mac, and warning them of what he termed “insane lending practices” and that he “offered them advice on precisely what they didn’t do.” In the early years of his associating with Freddie Mac, Gingrich provided them a number of written scenarios by which they could improve their relations with Congress – particularly Republicans who wanted to dismantle the government supported mortgage institution. Over time, it appears Gingrich offered less and less information to Freddie Mac – or perhaps as the housing bubble continued to grow, grew frustrated with Freddie Mac’s unwillingness to take his advice.

The Bloomberg report indicates no written material was provided from Gingrich to Freddie Mac between 2006 – 2008, the very time the lending markets began to buckle and eventually collapse.

While Mr. Gingrich certainly was paid well for his consulting work, it also appears, at least to this point, he was being quite honest in his description regarding both his role as a consultant, and Freddie Mac’s repeated unwillingness to follow the advice Gingrich offered regarding their “insane lending practices”.

Will these facts be enough to have the relationship between Gingrich and Freddie Mac dismissed in favor of more important and pressing issues as the GOP race for the White House continues?

Perhaps…

Romney Aides Tied to Freddie Mac

Here we go. This was inevitable.
Now the Daily Caller is reporting here that Mitt Romney's top advisers lobbied for… yes… Freddie Mac. Which in turn raises the obvious since Romney has been firing away at Gingrich on the issue. Will Romney a) fire the aides -- lobbyists Susan Molinari and Vin Weber? – or, b) demand that they return the money.
Now what does this little episode really demonstrate?
The Romney campaign has violated one of the primary laws from that rascally old strategist Sun Tzu… know the enemy and know yourself. The Romney campaign is a bit shaky on knowing Newt and, disturbingly, positively weak on knowing itself. Did no one at Romney HQ not understand that if they were to attack Newt on Freddie Mac… any Romney-Freddie ties would quickly surface? No? Really? Why not?
What Romney has done here is hire Washington Establishment Republicans. Smart people, nice people, good people… but nonetheless people whose very existence depends on keeping the status quo. This says -- yet again -- everything about the Romney mindset when it comes to bringing serious change to Washington. This is exactly why he is having trouble.
And he seems clueless about how to deal with the problem.  Newsflash: attacking Newt for Freddie Mac ties while hiring aides who did the same thing was only going to backfire. Which it has now done!

Mitt Romney's Personal Investment in Fannie Mae and Freddie Mac

WASHINGTON (AP) - Republican presidential candidate Mitt Romney has criticized rival Newt Gingrich for earning more than $1.6 million in consulting fees from Freddie Mac even though he had invested as much as $500,000 in the U.S.-backed lender and its sister entity, Fannie Mae.

Romney's latest financial disclosure report listed several investments in the mortgage giants that he, Gingrich and other GOP critics have repeatedly singled out as prime villains in the housing crisis that played a central role in the nation's long and deep recession.

The disclosure report came a day before Romney was to release his tax return from 2010 and an estimate of his 2011 taxes.

While continuing to hammer Gingrich for his consulting work for Freddie Mac, the Romney campaign sought to deflect questions about the former Massachusetts governor's investments. They include a mutual fund worth up to $500,000 that includes assets from both lenders among other government income, and separate investments in each of the lenders in Romney's individual retirement account, each worth between $100,000 and $250,000.

Romney campaign officials said Monday that a trustee handles the investments and that Romney had no role in choosing or managing them.

The dimensions and the sources of Romney's wealth, which he has estimated to be as much as $250 million, have become a central issue in the roiling GOP primary campaign.

For months, Romney dismissed calls to release his personal income tax records. But after mounting criticism from his rivals and others, coupled with his stinging weekend loss to Gingrich in the South Carolina primary, Romney agreed to release his 2010 return and 2011 estimate on Tuesday. Both sets of records could provide new details about his investments and his annual take as founder of the Bain Capital private equity firm. Read More

2008 Video: Bachman "Gushes" Over Newt, Newt: "No Fannie/Freddie Bailout"

Newt Gingrich at a September 3, 2008 event with Michele Bachmann entitled Governing and Political Change, explains his position on Fannie and Freddie. He also details that he did consulting work for them.

FACT SHEET: THE GINGRICH GROUP AND FREDDIE MAC

Atlanta, GA - ln response to a Bloomberg News story today about Freddie Mac's hiring of the consulting firm, The Gingrich Group, over the course of an eight year period, Newt 2012 released the following fact sheet:

Newt Gingrich welcomes scrutiny of his record in public office and as a small businessman. Gingrich believes that properly vetting the potential next president is absolutely necessary in a free society and that a properly vetted nominee for the Republican Party will better be able to defeat President Obama and lead our country in rebuilding the America we love.
Gingrich has never lobbied for Freddie Mac, or any client, nor has anyone in any of the organizations he founded after leaving office as part of their work with them. Gingrich made a decision after resigning that he would never be a lobbyist so that nobody would ever question the genuine nature of his advice and perspectives. This prohibition against lobbying was made very clear to all Gingrich Group clients and strict internal protocols were developed to prevent lobbying. Today’s Bloomberg article confirms that Gingrich and his firm did no lobbying for Freddie Mac.
Nor did Gingrich, as part of his contract, advocate against pending legislation affecting Freddie Mac, as Gingrich was accused of doing by the moderator at the CNBC debate in Michigan. This, too, was confirmed by the Bloomberg News article this morning.
Freddie Mac was a small part of the client and revenue base of The Gingrich Group and Gingrich’s various small businesses. The Gingrich Group offered strategic advice to a wide variety of clients about a wide variety of issues, including IBM, Microsoft, The US Chamber of Commerce and more. Gingrich Group fees were comparable to that of many consulting firms.
Gingrich is broadly favorable of the concept of Government Sponsored Enterprises (GSE) but believes the financial crisis shows that Fannie Mae and Freddie Mac should be broken up and their smaller successors be moved off of government guarantees and into the free market.
Gingrich also is in favor of efforts to increase home ownership in America but as a conservative believes it has to be within a context of learning how to budget and save in a responsible way, the opposite of the lending practices that led to the financial crisis.

http://www.newt.org/news/fact-sheet-gingrich-group-and-freddie-mac