Mortgage Giant Fraud

Fannie and Freddie Expose the Corruption Culture in Washington
Democrat Senator Christopher John Dodd, the chairman of the Senate Committee on Banking, Housing and Urban Affairs Received the most lobbyist money from Freddie Mac and Fannie Mae...Democrat Senator Barack Hussein Obama was the second largest beneficiary of what now we know was "slush hush" money. Dodd also got a "special mortgage rate" News Here

The federal government seized control of mortgage giants Fannie Mae and Freddie Mac in a $200 billion corporate bailout, the largest in the nation's history. The shock waves are being felt not only in the financial markets, but also inside the Beltway as the two companies face allegations of corruption and cronyism.

The whole bailout (and other federal actions) seems very socialist. The one thing that is certain is that the collapse was avoidable, but oversight was lax because of the casual culture of corruption that pervades.

Overall, Fannie and Freddie have spent more than $180 million over the last 10 years to lobby their friends in Congress, making sure that nothing happened in Washington they didn't want to happen. According to Politico.com, "The two government-chartered companies run a highly sophisticated lobbying operation, with deep-pocketed lobbyists in Washington and scores of local Fannie- and Freddie-sponsored homeowner groups ready to pressure lawmakers back home." (Fannie Mae was also nabbed in an all-too-familiar accounting scheme where the company's profits were overstated so that top executives could reap huge cash bonuses.)

Of course, with the bailout, that has all changed -- for now anyway.

The tentacles of the Fannie and Freddie debacle reach deep into Washington and both political parties. Again, from Politico.com

Franklin D. Raines, a former budget director in the Clinton White House, was paid $90 million in the five years he served as Fannie's CEO. He resigned amid an accounting scandal in 2004 with a $19 million severance package, though it was later whittled down after court challenges.

Freddie's foundation has its own list of heavy hitters. Among its former board members are Rep. Rahm Emanuel (D-Ill.), a confidant of Democratic nominee Barack Obama, and Harold Ickes, a senior adviser to both President Clinton and Sen. Hillary Rodham Clinton (D-N.Y.). From the Republican side, David Gribbin, an aide to Vice President Cheney, once sat on the board, and Robert Glauber, a former Treasury undersecretary, is on the board.

Another so-called "confidant" of Barack Obama, by the way, was none other than James Johnson, the former Fannie Mae CEO who was forced to resign from Obama's Vice Presidential vetting committee after the press reported Johnson had received preferable mortgage interest terms. (Johnson was also linked to shady fundraising practices when he was the head of the company.)

Former Clinton FBI Director Louis Freeh sits on Fannie's board today. Bush White House veteran Stephen Friedman was once a board member, and former Bush trade representative and State Department official Robert Zoellick did a tour as a Fannie executive vice president.

The fact is big government leads to more corruption. And it doesn't get much bigger than Fannie Mae and Freddie Mac, which dominated the $12 trillion home loan market, especially now that the federal government is running the whole show. The companies took care of both political parties, took more risks with the urging of their allies in Congress, and taxpayers are left holding the bag.

Arguably, this is the biggest government corruption scandal in our nation's history. But because "everyone" in Washington is involved, you won't hear a peep about it from our nation's Establishment.

Judicial Watch, has more than a few leads to investigate.

Corruption Issue Makes a Comeback in Presidential Campaign?

As you know, Judicial Watch neither supports nor opposes candidates for political office, but I can't help but notice a welcome change that has occurred in the race for President of the United States. Have you noticed the renewed focus on the issue of corruption following the Republican National Convention?

It came roaring back when John McCain decided to tap Sarah Palin as his vice presidential running mate, touting the Alaska governor's record in tackling government corruption in her own state and in her own party. Then, during his convention speech, McCain devoted a significant amount of attention to discussing the Republican Party's willingness to countenance corruption in its own ranks (an unusual move for a partisan event).

"We were elected to change Washington, and we let Washington change us," McCain said. "We lost the trust of the American people when some Republicans gave in to the temptations of corruption."

(Some honest Democrats say this about the Clinton years - and that's why Hillary is not the nominee of their party.)

Ironically, I first took serious notice of Senator Obama because Democrats put him in front of an ethics bill that passed the Senate in early 2007. I remember thinking that he made a smart move as a freshman Senator by taking on this important issue. And now with Palin, who has a notable record in the area of government ethics, I pray Washington's "culture of corruption" will receive a serious discussion in next few weeks. Who knows, maybe the candidates will be forced to make good on promises they've made after they're elected!

The seventh anniversary of the September 11, 2001 terrorist attacks on the United States reminds us why it is so important to have honest and ethical people in public office. We face threats to our nation from terrorists and international outlaw nations and we expect our elected officials to be on the ball and watchful. If corrupt politicians are engaging in shady fundraising practices, extorting money, or accepting bribes, they are necessarily distracted from fulfilling their duty to make sure we are protected from terrorist threats. So it is not a stretch to say that it is a matter of national security that our government and its leaders be free from corruption.

Of course, our thoughts and prayers are with the victims of the murderous attacks and their families. We also express our gratitude to the multitudes of firemen, policemen and other responders who gave and risked their lives to save the lives of their fellow Americans, and to the members of the U.S. military fighting every day against the scourge of Islamic terrorism.

From the Desk of Judicial Watch President Tom Fitton:
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

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