So far the legal tab has run north of $200 million and it will only keep growing, according to the government agency (Federal Housing Finance Agency—FHFA) that oversees Fannie and Freddie. In a report released this week, the FHFA’s inspector general reveals that the unscrupulous officers responsible for Fannie and Freddie’s collapse have mounting legal bills and taxpayers will continue picking up the exorbitant tab.  

They are charged with a variety of crimes, including securities and accounting fraud, and the cases are expected to drag on right along with their already-bloated defense funds. In fact, the inspector general suggests the government only work to “limit” (not stop) legal expenses “to the extent possible and reasonable.” Another brilliant suggestion from the FHFA’s watchdog, which supposedly is looking out for taxpayers, is to “control costs of legal expenses.” 

It’s like there’s no end to the Freddie and Fannie madness. Political corruption of epic proportions is at the heart of the scandal. The lenders collapsed because those who operated them played fast and loose with accounting, risk assessment and executive compensation issues while Congress looked the other way and protected them from much-needed regulation. For years Freddie and Fannie backed risky mortgages and implemented a policy of lending to high-risk individuals with poor credit.

Lawmakers, including then-Senator Barack Obama, protected Fannie and Freddie from proper oversight because they got political contributions from the mortgage giants. In fact, Judicial Watch uncovered records that show for more than six years members of Congress were aware of the massive problems at Fannie and Freddie yet they did nothing. As a result taxpayers are on the hook for at least $400 billion and $5 trillion in mortgage liabilities.

Not surprisingly, the Obama Administration has worked diligently to keep secret all records related to Freddie and Fannie’s political contributions. In 2009 JW sued to obtain them and the FHFA admitted it might possess the documents but said it’s not obligated to release them to the public. Because Freddie and Fannie are wholly operated by the federal government, JW maintains that the records are subject to the Freedom of Information Act (FOIA). The case is still active in the U.S. Court of Appeals for the District of Columbia Circuit.

Overall, members of Congress have received nearly $5 million in political contributions from Fannie Mae and Freddie Mac in the last decade, according to a reputable nonprofit that tracks money in U.S. politics. Among the top recipients of Fannie and Freddie’s political largess: Former Connecticut Senator Chris Dodd, then-Illinois Senator Obama, Massachusetts Senator John Kerry, former Utah Senator Bob Bennett and Alabama Congressman Spencer Bachus.  

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 21^st 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.