The Fannie/Freddie Talking Points Presentation

Republicans are now heavily invested in blaming the Democrats' coddling of Fannie Mae and Freddie Mac for the subprime mortgage crisis. Here's Majority Leader John Boehner at a GOP fundraiser in Georgia: "It's not a failure of the free market what's going on in the economy today. The excesses of Fannie Mae and Freddie Mac, and those who blocked the reforms that we wanted to make, really are the issue. ...This was a failure of government, not a failure of the free market. President Bush, Senator McCain, and many other Republicans tried over the last ten-to-fifteen years to fix this problem but to no avail."

Judy Black is a policy director (read: lead lobbyist) for Brownstein Hyatt Farber Schreck's DC arm. (Merrill Lynch was a client this year...) Black is also the wife of McCain strategist Charlie Black.

On Monday, Black forwarded to GOP lobbyists a Power Point presentation -- SHOTINTHEFANNIEMAE.PPS -- on the collapse of Fannie and Freddie, and, in particular, the campaign contributions that Fannie and Freddie provided to leading Democratic members of Congress.

2004 Video: Democrats Defend Fannie/Freddie from Regulation:
"We've been through nearly a dozen hearings where frankly we were trying to fix something that wasn't broke. Mr. Chairman we do not have a crisis at Freddie Mac and in particular at Fannie Mae under the outstanding leadership of Mr. Frank Raines."-Rep. Maxine Waters, 2004
http://www.youtube.com/watch?v=YL36nwCSYUM
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Guilty Party: ACORN, Obama, and the mortgage mess
Mona Charen, September 30, 2008
http://article.nationalreview.com/?q=Mzk4MmVkNzA1NGQ2NGRkZjQ2YjNmYjdlODZkMmQ4N2I=
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An ACORN Falls from the Tree: A congressional outrage
Ken Blackwell, September 29, 2008
http://article.nationalreview.com/?q=N2Y5MTc0ZTAyMmE1Mjk3NGE3OWRiY2FkMjZlN2YxYzc=
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Inside Obama’s Acorn:
By their fruits ye shall know them
Stanley Kurtz, May 29, 2008

"What if Barack Obama’s most important radical connection has been hiding in plain sight all along? Obama has had an intimate and long-term association with the Association of Community Organizations for Reform Now (Acorn), the largest radical group in America. If I told you Obama had close ties with MoveOn.org or Code Pink, you’d know what I was talking about. Acorn is at least as radical as these better-known groups, arguably more so. Yet because Acorn works locally, in carefully selected urban areas, its national profile is lower. Acorn likes it that way. And so, I’d wager, does Barack Obama."
http://article.nationalreview.com/?q=NDZiMjkwMDczZWI5ODdjOWYxZTIzZGIyNzEyMjE0ODI
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History of Fannie Mae scandal
Associated Press, December 7, 2006
"Fannie Mae announces its long-awaited restatement, erasing $6.3 billion in profit from 2001 through June 30, 2004."
http://www.boston.com/business/articles/2006/12/07/history_of_fannie_mae_scandal/?page=1
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Bailout Politics: The Congressional Dems who enabled this crisis are now being trusted to fix it?
Thomas Sowell, September 30, 2008
http://article.nationalreview.com/?q=OWE3OWU3OTExYzNlNTUzMzY2YmJmOWZjMzcwN2M1NjU=

Gee, nothing like striking while the iron is... cold. Where were the Reps with this two weeks ago!? A day late and a dollar short - more like two weeks late and $700 Billion dollars short.

Fannie-Mae Talking Points:

* Throughout the 1990s, the Clinton Adminstration and Democrat-controlled Congress pressured FannieMae to start offering more sub-prime loans to people with poor credit who couldn't normally afford or qualify for home loans (including many minorities). "Fannie Mae has agreed to buy more loans with very low down payments-or with mortgage payments that represent an unusually high percentage of a buyer's income. That's made banks willing to lend to lower-income families they once might have rejected."
(Source: LA Times, 1999)

* Warnings were raised as early as 1999 that this program could come back to devastate Fannie Mae.
(Source: NYTimes, Sept. 1999)

* Starting in 2001, President Bush has been publicly calling for Congressional reform of FannieMae/FreddieMac - including 17 times in 2008 alone.
(Source: WhiteHouse, Sept 2008.)

* In 2003, President Bush recommended a new agency to oversee FannieMae/Freddie Mac which was even then known to be broken. Democrats not only blocked this effort - they DENIED there was even a problem: ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.
(Source: NYTimes, Sept. 2003)

* Barney Frank, who is openly gay, was actually involved in a long-time romantic relationship with a FannieMae executive Herb Moses for ten years throughout most of the 1990s. Frank had in the past been called upon to use his influence on the House Financial Services Committee to support FannieMae.
(Source: Business & Media Institute)

* In 2004, House Democrats continued to vehemently deny there were any problems with FannieMae/FreddieMac and viciously attacked those who suggested that they were heading into trouble and needing reform.
(Source: Video of House Democrats)

* In 2005, Republicans in Congress did create legislation to regulate and reform FannieMae/FreddieMac and to try to avert this coming disaster. John McCain supported and was a co-sponsor of that bill. McCain did what he could to stop this disaster years ago.
(Source: Congressional Record)

* Democrats in the Senate killed that Republican Bill to regulate and reform Fannie/Freddie right before the 2006 election. After that Democrats took control of the House and Senate in 2006, there were no more serious attempts made to avert the coming meltdown of FannieMae/FreddieMac by the Democrat-controlled Congress.

* Since 2006, Barack Obama has received $125,000 in campaign contributions from FannieMae/FreddieMac employees and PACs - more per year than any other member of Congress.
(Source: 1989-2008)

* Obama is the second largest recipient of total campaign contributions from Fannie/Freddie PACs - fellow Democratic Senator Chris Dodd is #1. Dodd also oversees the Senate Committee on Banking, Housing and Urban Development - and he made sure that no one did anything to address the long-standing problems with FannieMae.

* In the 1990s, Jim Johnson was Chairman and CEO of FannieMae. In 2004, a Federal Investigation found that during Johnson's tenure, FannieMae had improperly deferred $200 million in expenses, over-reported its value and later found that FannieMae substantially under-reported Johnson's compensation to the tune of almost $20 million.

* After Johnson's tenure, Franklin D. Raines was Fannie Mae Chairman/CEO until 2004 and he also supported these risky, sub-prime loan programs. In 2004, Raines was forced to take an "early retirement" from Fannie Mae while under investigation by the Securities & Exchange Commission and lawsuits over "accounting irregularities". Raines settled those lawsuits this year by paying millions in penalities.

* Franklin Raines has been tapped as an economic advisor to Barack Obama's Presidential campaign and Jim Johnson worked on Barack Obama vice-presidential search committee.
(Sources: Wash. Post July 2008, Wash. Post Aug 2008)

BOTTOMLINE:
- The FannieMae "subprime" problem began with the Clinton Administration and the Democrat-controlled Congress in the early 90s.
- Warnings were sounded in the late '90s of a coming financial disaster.
- President Bush tried repeatedly to fix this problem since 2001 - but Democrats denied the problem it even existed.
- Republicans in Congress tried to fix this problem - but Democrats effectively blocked them.
- Proposals for bipartisan solutions stopped when Democrats took control of Congress.
- Democrats even viciously attacked people who tried to alert Congress of the growing FannieMae problem.
- Democrats who are NOW claiming they can fix the problem (like Frank, Dodd, Obama, etc.) are the exact same ones who ignored the problem, who denied the problem, who are tained by FannieMae contributions and obvious conflicts of interest and who are still associated and entwined with failed and discredited FannieMae CEOs.

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