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Contributed by Sam Minervino 2009-03-26

Portland — While there is unilateral outrage about the AIG bonuses (which I don’t share), very little is heard about president Obama’s chief of staff Rahm Emanuel who served a short stint on the board of Freddie Mac and enriched himself by deception. He was appointed by Bill Clinton and was there when Freddie Mac was found to be “cooking the books” to make them appear more profitable than they really were thus enabling the members of the board of directors to pay themselves huge bonuses. Not only were they caught and fined hundreds of millions of dollars for their illegal activities, but the illegalities performed by Emanuel and his comrades led to the financial fiasco Freddie Mac now finds itself in and indirectly to the devastation our economy has suffered.

According to the Chicagotribune.com, “Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator”. The article goes on to say, “Rahm Emanuel—now chief of staff to President Barack Obama—… made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.”

The chicagotribune.com tells how Emanuel made $16 million in three years as an investment banker. The Tribune goes on to say;

“He (Emanuel) was named to the Freddie Mac board in February 2000 by Clinton, whom Emanuel had served as White House political director… The board met no more than six times a year. Unlike most fellow directors, Emanuel was not assigned to any of the board's working committees, according to company proxy statements. Immediately upon joining the board, Emanuel and other new directors qualified for $380,000 in stock and options plus a $20,000 annual fee, records indicate.”

He didn’t do much for those evil corporate bonuses our President now wants to regulate. But on his watch, it was discovered he was busy;

“…the board of directors on which Emanuel sat was so pliant that Freddie Mac's managers easily were able to massage company ledgers. They manipulated bookkeeping to smooth out volatility, perpetuating Freddie Mac's industry reputation as "Steady Freddie," a reliable producer of earnings growth. Wall Street liked what it saw, Freddie Mac's stock value soared and top executives collected their bonuses….

On Emanuel's watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass.”- http://www.chicagotribune.com/news/politics/obama/chi-rahm-emanuel-profit-26-mar26,0,5682373.story

But that’s not all. While Emanuel was serving his time on the board, illegal political activities were also transpiring;

“the company (Freddie Mac) hatched a plan to enhance its political muscle. That scheme, also reviewed by the board, led to a record $3.8 million fine from the Federal Election Commission for illegally using corporate resources to host fundraisers for politicians. Emanuel was the beneficiary of one of those parties after he left the board and ran in 2002 for a seat in Congress from the North Side of Chicago.”

The scandals cost Freddie Mac billions of dollars in paybacks and hundreds of millions in fines;

According to the Tribune, “The board was throttled for its acquiescence to the accounting manipulation in a 2003 report by Armando Falcon Jr., head of a federal oversight agency for Freddie Mac. The scandal forced Freddie Mac to restate $5 billion in earnings and pay $585 million in fines and legal settlements.”

These illegalities pushed the Bush administration to seize the troubled firm and then inject $100 billion to “keep the firm afloat” according to the Tribune. President Obama has pledged another $200 billion for Freddie Mac.

When the Tribune delved into the meetings attended by Emanuel while he was on the board to find out what he knew and when did he know it, “The Obama administration rejected a Tribune request under the Freedom of Information Act to review Freddie Mac board minutes and correspondence during Emanuel's time as a director”, according to the Tribune.

President Obama is attempting to acquire more control of banks and the banking industry. This is contrary to what Emanuel was doing while he served his stint at Freddie Mac;

“…midway through Emanuel's 14-month term—Freddie Mac lobbyist R. Mitchell Delk laid out a strategy titled "Political Risk Management" aimed at influencing lawmakers and blunting pressure in Congress for more regulation. Through Delk's initiative, Freddie Mac sponsored more than 80 fundraisers that raised at least $1.7 million for congressional candidates despite a federal law that bans corporations from direct political activity.

Emanuel spokeswoman Sarah Feinberg said Emanuel "can't remember the meeting or topic" but might have been in attendance when Delk outlined his plans”- http://www.chicagotribune.com/news/politics/obama/chi-rahm-emanuel-profit-26-mar26,0,5682373.story?page=2

It appears the weeks wasted by the US House of Representatives in trying to confiscate the legally negotiated and contractually obligated bonuses paid to executives of AIG, have been a smoke screen to cover up the real crimes committed by members of the Democratic party and President Obama’s own chief of staff. Pay attention America, time is running out.

BARNRY FRANK’S LOVER WAS HEAD OF FANNIE MAE

Taken from…

Media Mum on Barney Frank's Fannie Mae Love Connection

Democratic House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive.

By Jeff Poor

Business & Media Institute

http://www.businessandmedia.org/printer/2008/20080924145932.aspx

(In 1991, Frank and former Rep. Joe Kennedy, D-Mass., lobbied for Fannie to soften rules on multi-family home mortgages although those dwellings showed a default rate twice that of single-family homes, according to the Nov. 22, 1991, Boston Globe.)

Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. And one of Fannie Mae’s main defenders in the House – Rep. Barney Frank, D-Mass., a recipient of more than $40,000 in campaign donations from Fannie since 1989 – was once romantically involved with a Fannie Mae executive.

The news media have covered the relationship in the past, but there have been no mentions since 2005, according to Nexis and despite the collapse of Fannie Mae. The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.”

While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.

Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).

BusinessWeek reported in its Nov. 14, 1994, issue that Fannie Mae called on Frank to exert his influence against a Housing & Urban Development proposal that would force the GSE to focus on minority and low-income buyers and police bias by lenders regardless of their location. Fannie Mae opposed HUD on the issue because it claimed doing so would “ignore the urban middle class.”

According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that “could pose risk to the taxpayers.”

Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were “exaggerated,” a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.

“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis,” Frank said to the Times. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Frank has also reaped campaign contribution benefits from Fannie Mae and its counterpart Freddie Mac. According a front page story in the Sept. 19, 2008, Investor’s Business Daily by Terry Jones, Frank has received $40,100 in campaign cash

Frank is ranked 16th on a list that includes both houses of Congress and fifth among his colleagues in the House. According to data from the Center for Responsive Politics’ OpenSecrets.org, political action committees financed by both Freddie and Fannie have contributed $3,017,797 to members of Congress since 1989. And according to the July 16 issue of Politico, the two entities have spent a whopping $200 million to buy influence – including not only campaign donations to members of Congress, but also presidential campaigns and lobbying efforts.

In a July 23 op-ed, Wall Street Journal Editorial Page Editor Paul Gigot put the blame for the GSEs’ collapse firmly on the members of the liberal establishment who took money from Freddie and Fannie. “Fan and Fred also couldn't prosper for as long as they have without the support of the political left... This includes Mr. Frank and Sen. Chuck Schumer (D., N.Y.) on Capitol Hill, as well as Mr. [Paul] Krugman and the Washington Post's Steven Pearlstein in the press.”

Frank was asked by CNN’s John Roberts on the Sept. 22, 2008 “American Morning” about this and his opposition to reform Fannie Mae and Freddie Mac…. he claimed he didn’t think the two GSEs were facing any problems…

I did not think we were facing a crisis in 2003, but that didn't mean we didn't have to have reform,” an animated Frank said when confronted with the question. “Here’s the deal, the Republicans controlled Congress from 1995 through 2006. They did zero to reform Fannie Mae and Freddie Mac.”

However, on Sept. 17, 2008, former Bush administration Deputy Chief of Staff Karl Rove elaborated on the Bush administration’s efforts to curb abuses at the two GSEs in 2003. He told Fox News’ “Hannity & Colmes” that Frank was among the most aggressive opponents of White House attempts to reform Fannie Mae and Freddie Mac.

“All of this bad stuff on Wall Street happened because people got greedy and the greed started at Fannie Mae and Freddie Mac,” Rove said. “And I know this because five years ago, the administration was alerted by the regulator, James Lockhart, that there was insufficient authority and that these institutions – particularly Fannie – were out of control.”

(The) Bush administration’s efforts to reform Fannie and Freddie were opposed by congressional Democrats – specifically Frank and Senate Banking Committee Chairman Christopher Dodd, D-Conn.

“And I got to tell you, for five years, I was part of an effort at the White House to fight this and our biggest opponents on the Hill who blocked this every step of the way were people like Chris Dodd and Barney Frank. And Fannie and Freddie are the $200 billion contagion at the center of this.”-Karl Rove