Obama’s and Schumer’s Connections to Fannie Mae

Flopping Aces ^ | 06-30-11 | Warren Beatty

[Starman417]

I am currently reading Reckless Endangerment by Gretchen Morgenson and Josh Rosner. I highly recommend it. This book names names, exposes policies and schemes, and will make you very mad with all of politics of the current economic mess. It documents the role of James Johnson and his tenure at the head of FNMA (Fannie Mae) in the 1990s, and his role in the housing price collapse/financial crisis of 2008. It focuses on James Johnson, Senator Chris Dodd (D-CT), and Representative Barney Frank (D-MA).

The book does an excellent job of explaining their roles, but does not elaborately discuss the role of Senator Charles Schumer (D-NY), nor the connection between Barack Obama and James Johnson, Fannie Mae, and Freddie Mac. So let's look at the roles of Obama and Schumer.

Prime versus Subprime

We need a concise definition of a prime loan and a subprime loan. I personally never knew that subprime loans referred to loan recipients rather than the loan itself, having heard all my life of the "prime rate." Hopefully, these definitions will help.

How Did We Get Here?

Being familiar with how we got into this housing price and economic crisis can help explain the politics of the crisis. An article in the February, 2009, issue of The American Spectator, by Peter J. Wallison, does a good job of recapping the current economic crisis. In his article he had two very interesting observations: "The New York Times itself reported in 1999 that Fannie Mae and Freddie Mac were under pressure from the Clinton administration to increase lending to minorities and low-income home buyers - a policy that necessarily entailed higher risks." and "The fact is that neither political party, and no administration, is blameless; the honest answer, as outlined below, is that government policy over many years caused this problem." This article, though quite long, does a good job of summarizing the causes of this economic crisis.

Obama's Connection to Fannie Mae

To understand Obama's connection to Fannie Mae, we first need to meet James Johnson, head of Fannie Mae during the 1990s. As Morgenson and Rosner state, Johnson was an operator. Johnson (as David Brooks points out), through Fannie Mae, co-opted relevant activist groups, handing out money to ACORN, the Congressional Black Caucus, the Congressional Hispanic Caucus and other groups that it might need on its side. As Jerome R. Corsi writes, during his tenure at Fannie Mae, Johnson personally made $21 million in his last year. Fannie Mae made $100 million while supposedly helping the poor. So he and Fannie Mae had plenty of money to throw around. Couple that with the fact that Franklin Raines, Johnson's successor at Fannie Mae, received a severance package of $19 million and a payment settlement of $2.6 million, and there is quite a bit of money to throw around.

So, having met James Johnson (and Franklin Raines), let's explore the connection with Barack Obama, who promised us the most transparent administration in history. Let's examine Johnson's role in Obama's campaign. Johnson was a member of "Friends of Hillary" (Clinton), but soon became a member of presidential campaign of Barack Obama. It's likely that then senator Obama met Johnson through the Daley political machine in Chicago. Johnson and Chicago Mayor Richard Daley are said to be close. Regardless of how they met, the selection of Johnson to be a part of the inner circle seems to run contrary to Obama's campaign theme of "change.'' It's also reported that Hillary Rodham Clinton and Obama have met at Johnson's elegant home to discuss what lies ahead after Clinton quits. Clinton has denied such meetings took place, and Obama isn't talking. Johnson represents Washington power. He's the consummate insider - very rich, very connected, and very much behind the scenes.

[opentalk]

They will not allow Fannie or Freddie to be audited, similar to the FED.

[SERKIT]

Franklin Raines, Jamie Gorelick and Fannie Mae

[SERKIT]

Add Rahm Emanuel to the list of Dems who were paid handsomely

[NOVACPA]

Fannie and Freddie are audited every year, by D&T and PwC, respectively.

[opentalk]

I was referring more to an investigation and FOIA, -

Obama Administration Tells Court Government-Run Fannie Mae and Freddie Mac Not Subject to Open Records FOIA Law link

[opentalk]

More from Judicial Watch , Fannie and Freddie lack of transparency

“The Obama administration has taken over the mortgage market through Fannie and Freddie. And not one document from these two monstrosities is subject to disclosure under our open records law?

We hope the appellate court puts a stop to the Obama administration’s unprecedented secrecy,” said Judicial Watch President Tom Fitton. “Fannie and Freddie used political contributions to protect themselves from being held accountable as the housing market was set up for collapse.

Now, as a result, taxpayers are on the hook to Fannie and Freddie for at least $400 billion —and $5 trillion in mortgage liabilities. The American people deserve to know the full truth about the partnership between Fannie and Freddie and their allies on Capitol Hill.”

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