- The Freddie and Fannie Boys are Back! Economy Watch Out!
ABC News Just Did a report on this:
First out of the gate were revelations about Rep. Rahm Emanuel (D-Ill.), the Obama supporter and Congressional Democratic Caucus chairman Obama has tapped to be his Chief of Staff (please see my colleague Jeff Poor’s November 6 report on this subject).
On Friday, ABC’s Brian Ross reported that Emanuel was on the Board of Directors of the failed financial institution Freddie Mac, a nice little tidbit conservatives on radio and in the blogosphere felt was important during this campaign, but for the most part mainstream media outlets didn’t care about…conveniently until now (emphasis added, photo courtesy ABCNews.com):
President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.
According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.
Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.” [...]
The actions by Freddie Mac are cited by some economists as the beginning of the country’s economic meltdown.
The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds. [...]
During the years 2000, 2001 and 2002, according to the SEC, Freddie Mac substantially misrepresented its income to “present investors with the image of a company that would continue to generate predictable and growing earnings.”
Emanuel Famously Earned The Title “Rahmbo” For His Hyper-Partisanship And Bare-Knuckle Tactics:
“Emanuel’s Reputation For Political Ruthlessness Earned Him The Nickname ‘Rahmbo,’ An Image Reinforced By A Legendary Episode When He Sent A Dead Fish To A Pollster Who Displeased Him.” (Janet Hook, “Meet The Powers Behind The Democrats’ Strategy,” Los Angeles Times, 7/5/06)
- Emanuel Calls Himself A “Vince Lombardi Democrat,” Because He Believes “Winning Isn’t Everything. It’s The Only Thing.” “Rep. Rahm Emanuel (D-Ill.), chairman of the Democratic Congressional Campaign Committee (DCCC), earlier this year called himself a ‘Vince Lombardi Democrat.’ It was Lombardi, the Hall of Fame football coach, who said, ‘Winning isn’t everything. It’s the only thing.’” (“Chairman Rahm,” The Hill, 12/14/05)
- Emanuel’s Political Style Was “Honed In Chicago” And Has A “Reputation As A Political Street Fighter.” “But his political style–honed in Chicago and on the presidential campaign trail with Clinton–isn’t gentle or uncertain. His reputation as a political street fighter inspires respect and more than a little fear.” (Naftali Bendavid, “The House That Rahm Built,” Chicago Tribune, 11/12/06)
- “[Emanuel] Was Also Zealously Partisan. He Had Once Owned A Consulting Business Devoted To Finding Skeletons In Republican Closets.” (Edward McClelland, “The Legend Of Rahm,” Salon.Com, 5/8/07)
Emanuel Told His Staff That Republicans Could “Go F— Themselves!” “‘I’ll tell you this,’ Emanuel shouted out to his staff. ‘The Republicans may have the 72-hour program. But they have not seen the 22-month program! … Since my kids are gone, I can say it: They can go —- themselves!’” (Naftali Bendavid, “The House That Rahm Built,” Chicago Tribune, 11/12/06)
Emanuel Even Told Then-British Prime Minister Tony Blair Before An Appearance With President Clinton: “This Is Important. Don’t F— It Up.” “Mr Emanuel is reputed to have walked up to Tony Blair before the prime minister’s first public appearance with Mr Clinton, during the Monica Lewinsky scandal. ‘This is important,’ he told Mr Blair. ‘Don’t f— it up.’” (“Former Ballet Dancer Turned Political Fixer,” The [London, UK] Guardian, 11/10/06)
Emanuel Attended A Meeting With Clinton Campaign Advisers Following The 1992 Campaign To Discuss Which Politicians And Members Of The Press They Would Seek Revenge Upon. “It was there that Emanuel, then Clinton’s chief fund-raiser, repaired with George Stephanopoulos, Mandy Grunwald and other aides to Doe’s, the campaign hangout. Revenge was heavy in the air as the group discussed the enemies – Democrats, Republicans, members of the press – who wronged them during the 1992 campaign. Clifford Jackson, the ex-friend of the President and peddler of the Clinton draft-dodging stories, was high on the list. So was William Donald Schaefer, then the Governor of Maryland and a D emocrat who endorsed George Bush. Nathan Landow, the fund-raiser who backed the candidacy of Paul Tsongas, made it, too.” (Elisabeth Bumiller, “The Brothers Emanuel,” The New York Times, 6/15/97)
- “Suddenly Emanuel Grabbed His Steak Knife And, As Those Who Were There Remeber [Sic] It, Shouted Out The Name Of Another Enemy, Lifted The Knife, Then Brought It Down With Full Force Into The Table. ‘Dead!’ He Screamed.” Suddenly Emanuel grabbed his steak knife and, as those who were there remeber [sic] it, shouted out the name of another enemy, lifted the knife, then brought it down with full force into the table. ‘Dead!’ he screamed. The group immediately joined in the cathartic release: ‘Nat Landow! Dead! Cliff Jackson! Dead! Bill Schaefer! Dead!’” (Elisabeth Bumiller, “The Brothers Emanuel,” The New York Times, 6/15/97)
And Emanuel Has Among The Most Partisan Voting Records:
In 2007, Emanuel Voted With The Democrats 98 Percent Of The Time. (Congressional Quarterly Website, www.cq.com, Accessed 10/31/08)
In 2006, Emanuel Voted With The Democrats 92 Percent Of The Time. (Congressional Quarterly Website, www.cq.com, Accessed 10/31/08)
In 2005, Emanuel Voted With The Democrats 95 Percent Of The Time. (Congressional Quarterly Website, www.cq.com, Accessed 10/31/08)
In 2004, Emanuel Voted With The Democrats 97 Percent Of The Time. (Congressional Quarterly Website, www.cq.com, Accessed 10/31/08)
In 2003, Emanuel Voted With The Democrats 95 Percent Of The Time. (Congressional Quarterly Website, www.cq.com, Accessed 10/31/08)
Obama Promised Greater Regulation Of Mortgage And Investment Banking Industries:
Obama Has Called For Heavier Regulation Of Investment Banks. “Mr. Obama set out his general approach to financial regulation in March, calling for regulating investment banks, mortgage brokers and hedge funds much as commercial banks are.” (Jackie Calmes, “In Candidates, 2 Approaches To Wall Street,” The New York Times, 9/16/08)
Obama Has Blamed The Sub-Prime Lending Crisis For The Housing Market Collapse. Obama: “The sub-prime lending debacle has sent the housing market into a tailspin, and caused a broader contraction in the credit markets.” (Sen. Barack Obama, Remarks At A Campaign Event, Flint, MI, 6/16/08)
But Emanuel Served On The Board Of Mortgage Giant Freddie Mac As It Expanded Subprime Lending:
Former President Clinton Appointed Emanuel To The Board Of Freddie Mac Where He Earned $231,655 In Director’s Fees In 2001 And $31,060 In 2000. “Clinton’s going-away gift to Emanuel was a seat on the quasi-governmental Freddie Mac board, which paid him $231,655 in director’s fees in 2001 and $31,060 in 2000.” (Lynn Sweet, “Too Much Money A Bad Thing?” Chicago Sun-Times, 1/3/02)
The Clinton Administration Ruled Fannie And Freddie Could Satisfy Affordable Housing Obligations By Purchasing Subprime Mortgages. ”If Sen. Obama were truly looking for a kind of deregulation that might be responsible for the current financial crisis, he need only look back to 1998, when the Clinton administration ruled that Fannie Mae and Freddie Mac could satisfy their affordable housing obligations by purchasing subprime mortgages. This ultimately made it possible for Fannie and Freddie to add a trillion dollars in junk loans to their balance sheets. This led to their own collapse, and to the development of a market in these mortgages that is the source of the financial crisis we are wrestling with today.” (Peter J. Wallison, Op-Ed, “Obama Voted ‘Present’ On Mortgage Reform,” The Wall Street Journal, 10/15/08)
And Emanuel Made Millions As An Investment Banker Off Insider Connections With High-Profile Democrat Donors Influential In The Clinton Administration:
After Leaving His Position With The Clinton White House, Emanuel Worked For Dresdner Kleinwort Wasserstein, An Investment Bank, From 1999 To 2002. “[A]fter leaving the Clinton White House, [Emanuel] had taken a position at the investment bank Dresdner Kleinwort Wasserstein in Chicago, where he worked from 1999 to 2002 and reportedly earned $18 million…” (Tony Blankley, “‘Cowboy Capitalism,’” The Washington Times, 10/1/08)
- “Congressional Disclosures Filed This Year Show Emanuel Earned $16.2 Million As An Investment Banker, Largely By Brokering High-Profile Mergers And Acquisitions.” (Mike Dorning, “Rahm Emanuel: From Clinton Aide To Money Maker,” Chicago Tribune, 11/9/03)
“Deftly Tapping The Contacts He Made As A Senior Adviser To Former President Bill Clinton, Emanuel Went To Work For One Of Clinton’s Most Active Fundraisers After Leaving The White House In Late 1998.” (Mike Dorning, “Rahm Emanuel: From Clinton Aide To Money Maker,” Chicago Tribune, 11/9/03)
- “Emanuel Owes His Investment Banking Job To Bruce Wasserstein, A High-Rolling Wall Street Dealmaker Who Was One Of Clinton’s Most Active Fundraisers In The Financial Community.” (Mike Dorning, “Rahm Emanuel: From Clinton Aide To Money Maker,” Chicago Tribune, 11/9/03)
- “He Took On A Client Base Many Of Whom Were His Party’s Most Important Financial Backers – Democratic Donors Of Such Clout That They Have Slept In The Lincoln Bedroom, Flown On Air Force One And, In One Case, Even Celebrated A Birthday In The White House With Clinton.” (Mike Dorning, “Rahm Emanuel: From Clinton Aide To Money Maker,” ChicagoTribune, 11/9/03)
“Emanuel’s Two Biggest Deals Involved Politically Connected Utilities: One Representing Commonwealth Edison’s Corporate Parent In A Merger And The Other Representing A Buyer In The Purchase Of A Home Security Business From Telecom Giant SBC Communications.” (Mike Dorning, “Rahm Emanuel: From Clinton Aide To Money Maker,” Chicago Tribune, 11/9/03)
- “Shortly Afterward, SBC Hired As Its President William Daley, The Commerce Secretary Of The Former Clinton Administration And The Brother Of Chicago’s Mayor.” (Mike Dorning, “Rahm Emanuel: From Clinton Aide To Money Maker,” Chicago Tribune, 11/9/03)
More on the Genius of Obama to Select Him
He was part of a small crew that created the CRA-the Community Reinvestment Act or some call it the Credit Redevelopment Act-and allowed applicants to secure mortgages without income verification. As the idea grew the “crew” formed the Freddie and Fannie programs as a (sort of) “job” for out of work dems. After 6 years, the CRA grew into what it is, and Emanuel was able withdraw almost 200 million dollars. This is one of the genius’s that started the program that started the demise of our economy.
When the Bush administration tried to reform Fannie and Freddie, Rahm Emanuel Opposed Legislation as well as Barack Obama.
It isn’t just Fannie Mae where Obama has a problem. Another close political adviser, in fact the one man responsible for rallying support for Obama early on among Congressional Democrats, is Rep. Rahm Emanuel, who served on the Board of Directors for Freddie Mac after leaving the Clinton White House. According to Freddie Mac insiders, Emanuel during his time on the board opposed every reform proposed by the Bush Administration that would have impacted Freddie and Fannie Mae.
Emanuel claimed to be neutral in the primary race between the wife of his old boss and his longtime Chicago acquaintance, Obama. But the chairman of the House Democratic Caucus, who would be first in line for the vacated Senate seat of Obama should he win the presidency, quickly dumped Clinton when it was clear Obama had a head of steam for the nomination.
“We ought to be able to — rightly — hang the Fannie and Freddie scandal around the neck of Obama, if they can get out in front,” says a House Republican. “Middle-class folks’ mortgages are probably safe, but the American taxpayer will also be paying for this scandal for years to come.”
There’s over 1 million homeowners having there homes foreclosed in our country right now. President Obama promised things would get better, and hiring this idiot into your cabinet goes against everything you said.
From the Nation:
Unfortunately, Emanuel is a militant advocate for free-trade policies; he was a point man in the White House in the fight to pass the North American Free Trade Agreement and similar deals that have been passionately opposed by the very labor, environmental and farm groups that were essential players in electing Obama. When he ran for Congress in 2002, major unions supported his Democratic primary opponent, former Illinois State Representative Nancy Kaszak.
Picking Emanuel would reassure Wall Street, but it won’t give much comfort to Main Street.
It will also cause some head-scratching among Democrats who thought they were making a break not just with the Bush administration but with the compromises of the Clinton era.
Emanuel, a fearsome fund raiser, is closely aligned with the corporate-sponsored Democratic Leadership Council, the most “insider” of Washington-insider groups.
And, while Obama established his credentials with progressive Democrats by opposing the 2002 congressional resolution authorizing President Bush to go to war with Iraq, Emanuel supported it.
Excerpt from Emanuel and Reed’s The Plan/Big Ideas for America:
(Or the NANNY State).
America has plenty of unfinished business, and all of the reforms we’d like to see — some of which appear in this book — would make for a very long list. But if we’re going to turn the country around, we need a bold agenda that can be counted off on one hand:
1. A new social contract — universal citizen service, universal college access, universal retirement savings, and universal children’s health care — that makes clear what you can do for your country and what your country can do for you.
2. A return to fiscal responsibility and an end to corporate welfare as we know it.
3. Tax reform to help those who aren’t wealthy build wealth.
4. A new strategy to use all America’s strengths to win the war on terror.
5. A Hybrid Economy that cuts America’s gasoline consumption in half over the next decade.
THE PLAN
A new social contract, or what you can do for your country and what your country can do for you
The economy of the twenty-first century demands new skills and will require all of us to live up to new responsibilities. We believe that four mutual obligations that follow should represent the first terms of a new contract between the people and their country.
Universal Citizen Service
If you forget everything else you read in these pages, please remember this: The Plan starts with you. If your leaders aren’t challenging you to do your part, they aren’t doing theirs. We need a real Patriot Act that brings out the patriot in all of us by establishing, for the first time, an ethic of universal citizen service.
Universal College Access
We must make a college degree as universal as a high school diploma. More than ever, America’s success depends on what we can learn. We have an education system built in the last century, with a school year left over from the century before that. In this new era, college will be the greatest engine of opportunity for our society and our economy. Just as Abraham Lincoln gave land grants to endow our great public universities, we will give the states tuition grants to make college free for those willing to work, serve, and excel.
Universal Retirement Savings
From now on, every job ought to come with a 401(k). An aging society cannot afford to keep saving less and risking more. We need new means to create wealth, based on the needs and responsibilities of twenty-first-century employees and employers. Employers should be required to offer 401(k)s, and workers will be enrolled unless they choose otherwise. If they switch jobs, they can take these accounts with them. When their paycheck goes up, so will their savings. Instead of a work force in which only half the workers have retirement savings plans, every American will have one.
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