Old Campaign Contributions Haunting Obama in Latest Financial Crisis
About the Author: I also write under the names Rudi Stettner and Magdeburger Joe. My home websites are rudistettner.com and magdeburgerjoe.com. Through my writing I like to promote a "labour conservative " social outlook as well as my eclectic tastes and interests Read more from this authorAccording to a story in World Net Daily today “A review of Federal Election Commission records back to 1989 reveals Obama in his three complete years in the Senate is the second largest recipient of Freddie Mac and Fannie Mae campaign contributions, behind only Sen. Christopher Dodd, D-Conn., the powerful chairman of the Senate banking committee. Dodd was first elected to the Senate in 1980.”
The implications of this breaking story are particularly dire for the Obama campaign. The most important factor in the Lehman Brothers bankruptcy and other crises on Wall Street is the huge amount of bad real estate debts. A bank counts on payment of the debts it has assumed so it can in turn pay its debts. Far too many loans were offered without credit checks or any of the normal safeguards that would minimise bank risks. Also, home owners were subsidising a life style beyond their actual means by taking loans out on the appraised value of their homes. When real estate prices started going down, the supply of easy money dried up and debts became due. Obama may not have been a co conspirator, but the facts seem to point towards his role as a legislative “enabler” for his well heeled friends
Fannie Mae, the Federal National Mortgage Association and Freddie Mac , the Federal Home Loan Mortgage Corporation have been household terms for decades. Though chartered by the government, they are private corporations that arrange loans for home buyers. With the backing of Fannie Mae and Freddie Mac, primary lenders are more willing to lend to low income borrowers and those whose credit ratings might be low. Just as a bank pays a home seller and then collects regular payment from a new home owner, Freddie Mac and Fannie Mae in turn buy these debts from the banks that extended the loans.
Although Fannie Mae and Freddie Mac were founded upon the ideal of extending the dream of home ownership corporate greed found a comfortable home in these two corporations. Politically connected individuals earned obscenely high corporate salaries that often exceeded in one year exceeded the lifetime earnings of a well paid worker. The World Net Daily cites three individuals who served under Walter Mondale and in the Clinton administration who have been implicated in scandals. The article states as follows.
“In the aftermath of the U.S. government takeover, attention has focused on three Democrats with close ties to Obama who served as Fannie Mae executives: Franklin Raines, former Clinton administration budget director; James Johnson, former aide to Democratic Vice President Walter Mondale; and Jamie Gorelick, former Clinton administration deputy attorney general.
All three Obama-related executives earned millions in compensation from Fannie Mae.
Johnson earned $21 million in just his last year serving as Fannie Mae CEO from 1991 to 1998; Raines earned $90 million in his five years as Fannie Mae CEO, from 1999 to 2004; and Gorelick earned an estimated $26 million serving as vice chair of Fannie Mae from 1998 to 2003, according to author David Frum, a fellow at the American Enterprise Institute.
All three have been involved in mortgage-related financial scandals.”
The scandals involved forging signatures on documents to create appearances of having reached earning targets as well as “cooking the books” so profits on the books would justify massive bonuses.
The article continues to detail instances in which restitution and penalties were levied because of obsecenely high bonuses obtained through deception. The article in WND states as follows.
“According to the Associated Press, Raines and several other Fannie Mae top executives were ordered in a civil lawsuit to pay nearly $31.4 million for manipulating Fannie Mae earnings over a period of six years to trigger their massive bonuses.
Raines was also forced in the settlement to give up Fannie Mae stock options valued at $15.6 million.
Last year, the Securities and Exchange Commission alleged Freddie Mac had engaged in accounting fraud from 2000 to 2002, imposing a $50 million fine on the company and on four executives fines for amounts ranging from $65,000 to $250,000.”
This is not new information or unproven allegations. Fines were levied and restitution made. These individuals saw fit to “invest” in Barack Obama’s political career. What was the return on their “investment”?
What was McCain doing in the Senate about these same problems? World Net Daily cites a radically different picture.
According to World Net Daily “In contrast, McCain warned of the coming mortgage crisis as he pressed in 2005 for regulatory reform of Fannie Mae and Freddie Mac.”
The article continues by detailing McCain’s prophetic warnings three years ago “For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac – known as government-sponsored entities or GSEs – and the sheer magnitude of these companies and the role they play in the housing market,” McCain said on the floor of the Senate in 2005, speaking in favor of the Federal Housing Enterprise Regulatory Reform Act of 2005.”
Unfortunately, the Democrats were more interested in maintaining the status quo than making substantive changes. According to the article, the fined executives are now policy advisers to the Obama campaign.
What repurcussions did years of mismanagement have on the crisis we are in today? Should the books of Fannie Mae and Freddie Mac be reopened?
Fingers are pointing at John McCain, who was actually a lonely voice in the wilderness against this waste and corruption. We need to look at Freddie Mac and Fannie Mae, and their corrupt mismanagement. A doctor who sickens a patient must implicate himself to save his patient. It appears that Freddie Mac and Fannie Mae might have sickened the U.S. economy. They need to speak up for the correct remedies to be prescribed.
It is a matter of record that these disgraced individuals were before and remain today Obama’s benefactors. What is the price of their kindness ?
Obama has been talking very tough on the campaign trail about the crisis on Wall Street. For the good of the country, he needs to sit down and listen with the rest of America as the sordid yet healing truth is brought to light.
World Net Daily Article about Obama and the Banking Crisis
Al Jazeera background article about Fannie Mae and Freddie Mac (written for laymen)
- Financial Crisis: Obama Democrats Have Red Ink All Over Them
- Barack Obama 2nd On List Of 345 Fannie Mae and Freddie Mac Recipients
- Democrats Refused To Regulate GSEs, Created Financial Tsunami
- How ‘Failed Policies’ Of Democrats Were Responsible For Financial Crisis
- Most Wanted: BARNEY “Not Me!” FRANK
