From the Desk of Judicial Watch President Tom Fitton:
Rahm Emanuel’s High-Paying, Do-Nothing Tenure at Freddie Mac
Obama’s Chief of Staff Rahm Emanuel is not known as a shrinking violet. He’s been described as rude, crude, aggressive, mean-spirited, dogmatic and loquacious. Passive, quiet, inconspicuous? Not so much.
So how is it that Emanuel served on the Board of mortgage lending giant Freddie Mac for 14 months without making any noticeable mark, while at the same time reaping huge financial rewards? And why did the normally obtrusive Emanuel keep his lips zipped when presented with an illegal accounting scheme designed to defraud Freddie Mac investors?
These are questions The Chicago Tribune has been asking lately. And here’s what The Tribune found out:
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.
One of those allegedly asleep-at-the-switch board members was Chicago’s Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.
"Little effort" may be an understatement. The Freddie Mac board does most of its work in committees. According to the Tribune, there is no documented evidence Emanuel even served on a committee.
But it gets worse.
On Emanuel’s watch, Freddie Mac hatched an accounting scheme – reviewed by the board –to defraud investors by artificially inflating the value of the company in order to pay out big bonuses to executives. The company was also slapped with a $3.8 million fine by the Federal Election Commission for using corporate funds to bankroll political fundraisers. In fact, after Emanuel finished his 14-month stint at Freddie, the company held one of these illegal fundraisers on his behalf!
And this is the man we’re supposed to trust operating the levers of power at the Obama White House?
Of course, Judicial Watch is trying to dig up as much information as possible on the political corruption that enabled Fannie and Freddie (and their congressional co-conspirators) to operate above the law.
In fact, one Judicial Watch Freedom of Information Act (FOIA) request relates directly to the political fundraising scheme that resulted in the FEC fine referenced above. On December 18, 2008, Judicial Watch filed a FOIA request with the Treasury Department regarding political contributions and political contribution policies at Fannie and Freddie.
We are looking into the deliberate campaign by these two agencies to buy political protection on Capitol Hill (mostly from liberals) so that they could continue on their reckless programs to hustle "subprime" mortgages to unqualified homebuyers.
I’ll continue to keep you posted on further developments.
The Obama Administration’s Schizophrenic Approach to Border Security
The Obama administration announced this week a plan to send a few hundred federal agents to the U.S. border with Mexico to "battle the increasing level of guns, money and drugs trafficked across the border." (The administration made no comment, of course, on the flood of people coming across the border with the guns, money and drugs.)
Meanwhile on Capitol Hill, Janet Napolitano, Secretary of Homeland Security, said "thanks but no thanks" to an offer by the U.S. Senate for more money (about $380 million) to address the problem, despite repeated pleas by members of the Senate Committee on Homeland Defense to use the funds to fix the problem. And the administration also rejected an appeal from Texas Governor Rick Perry and Arizona Governor Jan Brewer to deploy 1,000 National Guard troops to quell the violence.
So which is it? Is the administration really interested in dealing with the chaos and violence on the border? Or are they merely interested in publicity stunts that give the appearance that they want to address the problem? My guess is it’s more of the latter. Let’s face it, sending 300 or 400 federal agents to the border by itself is not going to make much of a difference. Especially since I hear that these agents won’t be there more than a few months. And then Secretary of State Hillary Clinton was down in Mexico this week attacking America and suggesting our Second Amendment is responsible for their civil war.
Unlike seizing large stakes in private companies, border protection is actually a fundamental responsibility of the federal government. Judicial Watch investigators have repeatedly visited the border area and report that the dangers and lawlessness there cannot be overstated.
As Senator Lieberman told Napolitano after she refused the money, "I think you’re going to need more resources to get the job done…I mean, this is a kind of war."
Yes, it most certainly is a kind of war. As Judicial Watch has uncovered through the Freedom of Information Act, U.S. Border Patrol officers have been involved in dangerous confrontations with Mexican government officials in U.S. territory, including members of the Mexican military. You can check out what we discovered by clicking here.
We’re now in a legal battle with the Obama administration to obtain more recent reports on Mexican incursions.
Yet Another Screwed Up Obama Nomination
Back in February, Barack Obama admitted that he had "screwed up" on a couple of his presidential appointments. Looks like the president screwed up again. Earlier this week, yet another of Obama’s appointments resigned due to corruption problems. This time, it’s Jon Cannon, who was slated to be second in command at the Environmental Protection Agency.
President Obama’s nominee for U.S. EPA’s second highest post abruptly pulled out of the Senate confirmation process today because of an investigation into the nonprofit group where he once served on the board of directors.
Jon Cannon, a former top EPA lawyer, withdrew from consideration as deputy administrator after learning America’s Clean Water Foundation "has become the subject of scrutiny."
In 2007, the EPA inspector general published a report regarding the mismanagement $25 million in grants awarded to the now defunct America’s Clean Water Foundation. The report concluded that the foundation violated conflict of interest provisions by awarding a large contract to a member of its board of directors. The report also found that the organization cheated in its accounting, could not support costs, and submitted incorrect proposals to the government.
Cannon said he withdrew because he didn’t want to become a "distraction."
Earlier this year, several other high profile Obama appointments, among them former Senator Tom Daschle (Health and Human Services) and former New Mexico Governor Bill Richardson (Secretary of Commerce) withdrew their names from consideration as well.
Daschle stepped down after news broke that he failed to pay nearly $150,000 in back taxes. Richardson was forced to remove his name from consideration as Secretary of Commerce due to a pending grand jury investigation involving influence peddling. Another appointee to be the first federal "performance" officer, Nancy Killefer, also withdrew because of an old tax lien.
And those are just the ones who have resigned. A partial list of others with corruption problems in the Obama administration include Obama himself, Hillary Clinton (Secretary of State), Eric Holder (Attorney General), Timothy Geithner (Secretary of Treasury), Greg Craig (White House Counsel), Leon Panetta (CIA), and Rahm Emanuel (WH Chief of Staff).
Judicial Watch, as part of its anti-corruption mission, will be busier than ever monitoring this Obama crowd.
The Obama administration seems dysfunctional in terms of ethical standards. An old tax lien that is probably irrelevant to public service will you keep out. Not paying tens of thousands of dollars in taxes and dissemble about it? You get to be Treasury Secretary.
Until next week…
Tom Fitton President
Judicial Watch is a non-partisan, educational foundation organized under Section 501(c)(3) of the Internal Revenue code. Judicial Watch is dedicated to fighting government and judicial corruption and promoting a return to ethics and morality in our nation’s public life. To make a tax-deductible contribution in support of our efforts, click here.