ACORN Secretly Wrote 1992 Law That Set Fannie, Freddie 'On the Road to the Mortgage Meltdown'

MInd Over Market ^ | August 21, 2011 | Robert England

[WashingtonSource]

The Association of Community Organizations for Reform Now (ACORN) was a key architect of a law passed in 1992 that set Fannie Mae and Freddie Mac on the road to ruin, according to a new book by Robert Stowe England to be released September 30 by Praeger.

The book, Black Box Casino, uncovers the myriad factors that led to the financial crisis of 2008, the worst financial implosion of modern times. This story is one of many threads woven into the book's narrative.

ACORN was a key leader in clandestine negotiations among housing activists to shape new legislation that would set into place the regulatory regime that governed Fannie and Freddie.

According to an affordable housing advocate familiar with what transpired at the meetings, ACORN and other housing groups were "informally deputized" (Black Box Casino, page 42) in 1992 to write key parts of new legislation by former House Banking Committee Chairman Henry Gonzalez, a Texas Democrat.

ACORN was co-founded in Arkansas in 1970 by Wade Rathke, a former member of the radical Students for a Democratic Society.

Once ACORN and other housing advocacy groups reached an agreement amongst themselves in secret negotiations in 1992, Gonzalez championed their agreement as his own in Congress, where the provisions were enacted into law.

The radical regulatory template that emerged from the housing advocates secret meetings became the centerpiece of the Federal Housing and Enterprises Safety and Soundness Act of 1992, or as it also known, the GSE Act. Fannie and Freddie are government-sponsored enterprises.

[WashingtonSource]

The radical left knew what they were doing back in 1992 -- and everyone else seemed to be clueless. They secretly wrote the rules that guaranteed Fannie and Freddie would eventually fail but in the meantime money and political power would flow to the radical left.

[icanhasbailout]

and when that was not enough to do the job they sent in folks like Rahm Emmanuel and Jaime Gorelick to finish it off.

[afraidfortherepublic]

bump to read later!

[Liz]

Fannie/Freddie are centerpieces of the criminal enterprise called the Democrat Party---where Dem cronies and collaborators loot the organization, get cushy jobs, bonuses, and the like. Fannie Mae’s political machine dispensed campaign contributions, gave jobs to friends and relatives of legislators, hired armies of lobbyists (even paying lobbyists not to lobby against it), paid academics who wrote papers validating the home ownership mania, and spread “charitable” contributions to housing advocates across the congressional map.

REFERENCE---BY MICHELLE MALKIN Fannie Mae serves as an industrial-sized patronage factory -- sharing profits with political allies, spreading taxpayer funds to voting blocs----like ethnic groups-----and doling out jobs to left-wing academics, Washington has-beens and back-scratching buddies. Obama insider Fannie Mae exec Jim Johnson got sweetheart loans from shady subprime Countrywide. Pols raked in six-figure salaries as F/F engaged in Enron-style accounting, plunged into debt and helped usher in the subprime housing meltdown through cockamamie lending practices.

Bill Clinton appointed Franklin Raines, Daley and Rahm Emanuel just as the quasi-governmental F/M engaged in rampant book-cooking so that F/M insider could help themselves to massive bonuses. The Chi/Tribune exposed how Emanuel's "profitable stint" was low-show w/ no work involved. Emanuel was not even assigned to committees, according to company proxy statements (more on Raines and Emanuel below).

Immediately upon joining the board, Emanuel and other insiders qualified for $380,000 in stock and options plus a $20,000 annual fee, public records indicate. W/ Wall Street Emanuel there, accounting tricks were used to mislead shareholders about outsize profits F/M reaped from risky investments. The goal was to cook the books to keep fraudulent earnings on the books, to make Freddie Mac look profitable on paper-----AND to fraudulently obtain humongous annual bonuses for political insiders.

========================================

Freddie and Fannie, the two big quasi-govt mortgage banks that HAVE ALREADY RECEIVED HUGE federal bailouts, had huge lobbying budgets that they used for political contributions to keep regulators off their backs.

So which politicians get Fannie and Freddie political contributions.

The top three U.S. Senators getting big Fannie and Freddie political bucks were Democrats and number two was then-Senator Barack Obama who had only been in the Senate four years but still managed to grab the number two spot ahead of John Kerry, decades in the senate, and Chris Dodd then-chairman of the powerful Senate Banking Committee.

Fannie and Freddie were creations of the Congressional Democrats and the Clinton White House, designed to make mortgages available to more people, and as it turned out, some many many who couldn’t afford them.

Fannie and Freddie have also been places for big Washington democrats to go to work in the semi-private sector and pocket millions.

The Clinton Administration’s White House budget director Franklin Raines was appointed by Clinton to run Fannie........ and collected $50 million dollars. Jamie Gurilli Gorelick (now BP's attorney), a Clinton Justice Apartment Official, worked for Fannie and took home $26 million dollars in mfg bonuses.

Big Democrat Jim Johnson, recently on Obama’s VP search committee hauled in millions from his Fannie Mae CEO job. Now remember, Obama’s ads and stump speeches attacked McCain and Republican policies for the financial turmoil. It is demonstrably not Republican policy and worse, it appears the man attacking McCain, Senator Obama, was at the head of the line when the piggy’s lined up at the Fannie and Freddie trough for campaign bucks...." - FoxNews, Sept. 2008

The Office of Federal Housing Enterprise Oversight’s report reported that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives.

===================================

Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets (by cooking the books).

Ex-Fannie CEO Franklin Raines (Clinton appointee) is a parasitic crook of the first order. This thief cooked the FM books precipitating losses of $9BILLION (that we know of) for the single purpose of creating $50 million fraudulent bonuses for himself (and millions for other F/M insiders). The SEC said Raines broke accounting rules by playing with risky derivatives.

The US Government filed suit against Franklin Raines when the depth of the F/M accounting scandal became clear. READ IT HERE http://housingdoom.com/2006/12/18/fannie-charges/

The Government noted, "The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public.....explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner." These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the misstated Fannie Mae profits. (Soon going to trial.)

On top of the $50M he looted from the govt (for which he was fired), Raines also walked away with a tax-paid exit package worth $90 million.

[GOPJ]

ping

[WashingtonSource]

Gorelick was one of many Democrats who got rich at Fannie and Freddie. The ones caught with the hands in the cookie jar manipulating the books — Franklin Raines and Leland Brendsel — walked away with barely a slap on the wrist and kept their millions.

[Liz]

December 3, 2009

Attorney General of the United States of America
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Dear Attorney General Holder:

We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel.

We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out.

The purpose of this letter is to connect the dots to establish both the conduct of Mr. Emanuel and those working with him to thwart inquiry, and to support your acting speedily so that the statute of limitations does not run out before the Justice Department is able to empanel a grand jury.

The New York Times reports that the administration is negotiating to double the commitments to Fannie and Freddie for a total of $800 billion by December 31, in order to avoid the congressional approval that would be needed after that date. But there currently is no Inspector General exercising independent oversight of these entities.

Acting Inspector General Ed Kelly was stripped of his authority earlier this year by the Justice Department, relying on a loophole in a bill Mr. Emanuel cosponsored and pushed through Congress shortly before he left for the White House.

This effectively ended Mr. Kelly’s investigation into what happened at Fannie and Freddie. Since that time, despite multiple warnings by Congress that having no independent Inspector General for a federal agency that oversees $6 trillion in mortgages is a serious oversight, the White House has not appointed one.

We recognize that these are extremely serious accusations, but the stonewalling by Mr. Emanuel and the White House has left us with no other redress. A 2003 report by Freddie Mac’s regulator indicated that Freddie Mac executives had informed the board of their intention to misstate the earnings to insure their own bonuses during the time Mr. Emanuel was a director.

But the White House refused to comply with a Freedom of Information Act request from the Chicago Tribune for those board minutes on the grounds that Freddie Mac was a “commercial” entity, even though it was wholly owned by the government at the time the request was made.

If the Treasury approves the $800 billion commitment to Fannie and Freddie by the end of the year, it will mean that under the influence of Rahm Emanuel, the White House is moving a trillion-dollar slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval.

Before the White House commits any more money to Fannie and Freddie, we call on the Public Integrity Section in the Justice Department to begin an investigation into the cause of Fannie and Freddie’s conservatorship, into Rahm Emanuel’s activities on the board of Freddie Mac (including any violations of his fiduciary duties to shareholders), into the decision-making behind the continued vacancy of Fannie and Freddie’s Inspector General post, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the White House, and on the board of Freddie Mac.

We also call for the immediate appointment of an Inspector General with a complete remit to go after this information.
We both come from differing political ideologies. One of us is the conservative head of a transparency foundation, and the other is the publisher of a liberal political blog. But we make common cause today out of grave concern for the future of our country in the wake of corruption-riddled bailouts.

These bailouts continue to rob Main Street to benefit Wall Street, and, because of that, we together demand the resignation of Mr. Emanuel, a man who has steadfastly worked to obstruct both oversight and inquiry into the matter. Rahm Emanuel’s conflicts of interest render him far too compromised to serve as gatekeeper to the President of the United States.

We are available at your earliest convenience to meet with you directly.

Sincerely,

Jane Hamsher
Grover Norquist

[BunnySlippers]

Blog pimp.

[Liz]

FINANCING THE DEMOCRAT VOTE-RIGGING MACHINE--ACORN
The Tax-exempt Clinton Foundation donated $250,000 to ACORN.

Clinton pictured above with ACORN founder Wade Rathke.

The tax-exempt Clinton Foundation had just donated $250,000 to ACORN.

The tax-exempt Clinton Foundation supposedly provided $275,000 in grants for ACORNS’S "Katrina Benefits Access project" and ACORN'S "Operation Hope Project; Restore Hope."

The tax-exempt Clinton Foundation also helped secure "private sector" commitments for ACORN.

=============================

Senate Finance Committee Study ACORN comprises a mind-boggling 94 different affiliates, that amounts to "a big shell game," a biting Senate Finance Committee study shows. The study, by the staff of Iowa Republican Charles Grassley, reveals four ACORN charity groups give more than half their revenue to taxable entities that engage in "impermissible lobbying and political activity."

ACORN and it’s subsidiaries for decades have moved taxpayer money into their own pockets and into the left-wing Marxist machine.

Sen Charles Grassley's documents show leaders of ACORN community groups transferred several million dollars in charitable and government money-----meant for the poor---- to parts of the group that have political (and sometimes profit-making) missions.

Sen Grassley's documents indicate that ACORN's tax-exempt groups----along with its tangled web of allied organizations---- used more than half their charitable and public money in 2006 to pay other ACORN affiliates.

===============================================

REFERENCE The IRS has pinpointed tax-exempt "foundations" as the locus classicus for tax evasion and money laundering. The BIGGEST tax-exempt fraud --- a tax-exempt foundation writing checks to another tax-exempt (crooks look "altruistic" as they siphon off tax-free money for personal/political uses).

[RushIsMyTeddyBear]

BFLR

[freekitty]

We weren’t clueless; we were lied to.

[tired&retired]

And who was the attorney for Acorn that wrote the law?

[WashingtonSource]

The source does not identify the name of the ACORN attorney. ACORN was one of several left-wing housing groups called together to draft the legislation. ACORN’s views prevailed on key points, especially requiring Fannie and Freddie to meet a new housing goal for very low income households and other key factors that guaranteed a steady decline in lending standards. The source for the story was a leftist housing attorney.

Here’s what’s written on the participants in the meeting:

“The Center for Community Change called on the National Low Income Housing Coalition to convene a working group of affordable housing advocates, which included ACORN and Consumers Union, as well as other participants from state governments and nonprofits involved in community development.”

[cricket]

So much of this comes out and like a magic act, the truth disappears. (Of course, the plate is only so big; and with scandal virtually embedded in everything that these people do; the total overload factor, comes into play.)

Meantime; have been waiting for the movie...you know, the one that tells the 'whole' truth. Waiting....waiting...

Maybe this book will take it there. Look forward to reading it, in any case. Pathetic that the Left always owns the lie, that becomes the self-serving narrative which becomes the de facto myth per 'public mind'. More pathetic that we let it happen.

[B4Ranch]

With Obama in office we should all keep the Bacitracin or Neosporin real handy. The truth, while good for you, like sunlight too much all at once can really hurt.

[WashingtonSource]

We were lied to in that the Democrats concealed the authors of the legislation. It was a lie by omission. The GOP was clueless. No idea they were being rolled.

[cricket]

With Obama in office we should all keep the Bacitracin or Neosporin real handy. The truth, while good for you, like sunlight too much all at once can really hurt.

LOL. . . Anesthesia, however; might be the better order of the day.

And speaking of 'order'; am listening to Fox News announcement re Obama's latest per our Military 'draw down" in Iraq.

Can only assume that the Forces of Evil' are truly on on a most powerful role.

[cricket]

With Obama in office we should all keep the Bacitracin or Neosporin real handy. The truth, while good for you, like sunlight too much all at once can really hurt.

LOL. . . Anesthesia, however; might be the better order of the day.

And speaking of 'order'; am listening to Fox News announcement re Obama's latest per our Military 'draw down" in Iraq.

Can only assume that the Forces of Evil' are truly on on a most powerful role.

[ForGod'sSake]

I may have lost count but isn't the number of convicted felons from the DC cabal doing hard time for these atrocities up to what now -- ZERO? Why is that? Where is the outrage? Who's sounding the alarm?

I have long argued the media in this country is primarily responsible for this continuing train wreck. Their illegitimate claim, bought into by lazy, distracted Americans, as government watchdogs has led us down a path towards complete collapse of the republic. Would anyone argue this point?

[Just mythoughts]

http://www.freerepublic.com/focus/f-news/2773695/posts

ACORNs were planted country-wide.