Gingrich Credits Freddie/Fannie For Liquid, Stable Housing Finance System
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Weeks after a global news agency revealed Newt Gingrich made upwards of $1.5 million as a Freddie Mac consultant, interesting information continues to surface exposing the former House Speaker’s tight relationship with the scandal-plagued, government-sponsored mortgage giant that triggered the nation’s financial crisis.
Gingrich, a Republican presidential candidate, made between $1.6 million and $1.8 million in consulting fees from two Freddie Mac contracts, according to inside sources quoted by the news service that broke the story earlier this month. His job was to “build bridges” and essentially sell the disastrous Freddie Mac public-private structure to conservative lawmakers seeking to dismantle it.
Political corruption undoubtedly played a huge role in the collapse of Freddie Mac and its counterpart Fannie Mae, which has left U.S. taxpayers potentially on the hook for trillions of dollars. In 2009 Judicial Watch obtained internal government documents proving that members of Congress (such as the disgraceful Barney Frank) were well aware that Fannie and Freddie were in deep trouble due to corruption and incompetence and yet they did nothing to stop it. JW continues pursuing Freddie and Fannie records but the Obama Administration (the most transparent in history?) engaged in a legal battle to keep each and every one them secret. Ironically, President Obama, the man who Gingrich is seeking to oust from office, is keeping secret public documents that could shed light on Gingrich’s relationship with Freddie.
Now that Gingrich has White House aspirations and is no longer on Freddie’s payroll, he criticizes the mortgage giant as a “thoroughly politicized” enterprise that practices “irresponsible lending policies.” It was not that long ago that Gingrich touted the Freddie and Fannie government-sponsored enterprise (GSE) model during a “policy talk” on transforming government into a 21st century organization.
A California-based news blog managed to dig up the speech from the Freddie Mac archives this week. Gingrich actually says the housing GSEs have made an “important contribution to homeownership and the housing finance system” and that they are responsible for a more “liquid and stable housing finance system than we would have without the GSEs.”
He adds that making home ownership more accessible and affordable is a policy goal that conservatives should embrace and says that these are “examples of government bringing about desired public purpose without creating massive, taxpayer-funded bureaucracies.” This is a “pragmatic and effective conservative approach,” according to Gingrich. That was 2007. In 2008, under pressure from the collapse of the subprime mortgage market that was largely created by Fannie and Freddie – the two “GSEs” were placed in conservatorship by the federal government. Since then, taxpayers have spent nearly $95 billion propping up Fannie Mae and over $57 billion propping up Freddie Mac.