And, this trail, like the path of Fanny and Freddie, leads to....
Media Omission: Lehman CEO Contributed Heavily to Democrats
Richard Fuld gave to Democrats over Republicans nearly 5-to-1.
By
Jeff Poor
Business & Media Institute
10/7/2008 10:03:31 AM
Journalists
are trained to “follow the money” – to uncover who donates how much to
what campaign, especially in the midst of a presidential election.
When Lehman Brothers CEO Richard Fuld testified before the House Oversight Committee
Oct. 6, the media criticized his wealth and spending amidst financial
turmoil in his company and on Wall Street. But conspicuously missing
was the story of Fuld’s political contributions.
According to the Center for Responsive Politics,
Fuld has donated to Democratic candidates over Republican candidates by
a margin of almost 5-to-1 in the last 15 years. He has given $106,400
to Democratic candidates and political action committees (PACs), and
just $22,800 to Republican candidates and PACS dating back to 1993.
However,
instead of scrutinizing Fuld’s financial ties to politicians, “NBC
Nightly News” took a populist approach and focused on the embattled
former CEO’s compensation.
“But
members of Congress noted that Fuld remains a wealthy man,” NBC
correspondent Lisa Myers said on the Oct. 6 “Nightly News.” “He
collected $342 million as CEO over 14 years. He owns a $21 million
apartment in New York City, an $8 million estate in Connecticut and a $13 million estate in Florida.”
Fuld did accept some responsibility during the committee hearing, which was chaired by California Democrat Rep. Henry Waxman.
“I
want to be very clear. I take full responsibility for the decisions
that I made and for the actions that I took based on the information
that we had at the time,” Fuld said.
On the Oct. 6 CNBC “Power Lunch,”
CNBC and Vanity Fair contributor Vicki Ward confirmed Fuld was punched
in the face at the Lehman Brothers gym on Sept. 21, the Sunday
following the investment bank’s filing for bankruptcy. “I’d have done
the same, too,” Ward concluded.Coincidence? Do you think the media would have mention this 5-1 contribution ratio if the Republicans had received five times as much money from Fuld than the Democrats had?
I wonder what Fuld got for his money?... Oversight?
I wonder who punched Fuld in the Mug??
He, (Barney Frank) along with Pelosi and the democrats have been shifting the blame for our current economic crisis to the Republicans. Tell me, how is this so?
Christopher Dodd (a ranking democrat) admitts that the primary cause of this crisis is the collapse of the housing market. Could Barney, who had a love affair with a Fanny Mae executive, and , with the help of other democrats, refused to collar Fanny& Freddie for years, possibly have something to do with this?....Who are the top three dollar grabbers from F&F? .... Dodd...Obama and Kerry.....Read on..
Media Mum on Barney Frank's Fannie Mae Love Connection
Democratic House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive.
By
Jeff Poor
Business & Media Institute
9/24/2008 4:00:57 PM
Are journalists playing favorites with some of the key political figures involved with regulatory oversight of U.S. financial markets?
MSNBC’s Chris Matthews launched several vitriolic attacks on the Republican Party on his Sept. 17, 2008, show,
suggesting blame for Wall Street problems should be focused in a
partisan way. However, he and other media have failed to thoroughly
examine the Democratic side of the blame game.
Prominent
Democrats ran Fannie Mae, the same government-sponsored enterprise
(GSE) that donated campaign cash to top Democrats. And one of Fannie
Mae’s main defenders in the House – Rep. Barney Frank, D-Mass., a
recipient of more than $40,000 in campaign donations from Fannie since
1989 – was once romantically involved with a Fannie Mae executive.
The
media coverage of Frank’s coziness with Fannie Mae and his pro-Fannie
Mae stances has been lacking. Of the eight appearances Frank made on
the three broadcasts networks between Jan. 1, 2008, and Sept. 21, 2008,
none of his comments dealt with the potential conflicts of interest.
Only six of the appearances dealt with the economy in general and two
of those appearances, including an April 6, 2008 appearance on CBS’s
“60 Minutes” were about his opposition to a manned mission to Mars.
Frank has argued that family life “should be fair game for campaign discussion,”
wrote the Associated Press on Sept. 2. The comment was in reference to
GOP vice presidential nominee Sarah Palin and her pregnant daughter.
“They’re the ones that made an issue of her family,” the Massachusetts
Democrat said to the AP.
The
news media have covered the relationship in the past, but there have
been no mentions since 2005, according to Nexis and despite the
collapse of Fannie Mae. The July 3, 1998, Reliable Source column in The
Washington Post reported Frank, who is openly gay, had a relationship
with Herb Moses, an executive for the now-government controlled Fannie
Mae. The column revealed the two had split up at the time but also said
Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.
Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH)
– all recently participants in government bailouts. But Frank has
derailed efforts to regulate the institution, as well as denying it
posed any financial risk. Frank’s office has been unresponsive to
efforts by the Business & Media Institute to comment on these
potential conflicts of interest.
While
the relationship reportedly ended 10 years ago, Frank was serving on
the House Banking Committee the entire 10 years they were together. The
committee is the primary House body
which along with the Office of Federal Housing Enterprise Oversight
(OFHEO) has jurisdiction over the government-sponsored enterprises.
He
has served on the committee since becoming a congressman in 1981 and
became the ranking Democrat on the committee in 2003. He became
chairman of the committee, now called the House Financial Services
Committee, in 2007.
Moses was the assistant director for product initiatives at Fannie Mae
and had been at the forefront of relaxing lending restrictions at the
company for rural customers, according to the Feb. 23, 1998, issue of
National Mortgage News (NMN).
“Herb
Moses, who helped develop many of Fannie Mae’s affordable housing and
home improvement lending programs, has left the mortgage industry,”
Darryl Hicks wrote for NMN. “Mr. Moses - whose last day was Feb. 13 - spent the past seven years at Fannie
Mae, most recently as director of housing initiatives. Over the course
of time, he played an instrumental role in developing the company’s
Title One and 203(k) home improvement lending programs.”
Hicks explained in his story how Moses orchestrated a collaborative effort between Fannie Mae and the Department of Agriculture.
“The Dartmouth grad also played a crucial role in brokering a relationship between Fannie Mae and the Department of Agriculture,” Hicks wrote. “This led to the creation of Fannie
Mae’s rural housing program where the secondary marketing agency agreed
to purchase small farm loans insured through the department.”
While
Moses served at Fannie Mae and was Frank’s partner, Frank was actively
working to support GSEs, according to several news outlets.
In
1991, Frank and former Rep. Joe Kennedy, D-Mass., lobbied for Fannie to
soften rules on multi-family home mortgages although those dwellings
showed a default rate twice that of single-family homes, according to
the Nov. 22, 1991, Boston Globe.
BusinessWeek reported in its Nov. 14, 1994, issue
that Fannie Mae called on Frank to exert his influence against a
Housing & Urban Development proposal that would force the GSE to
focus on minority and low-income buyers and police bias by lenders
regardless of their location. Fannie Mae opposed HUD on the issue
because it claimed doing so would “ignore the urban middle class.”
Moses
left Fannie in 1998 to start his own pottery business. National
Mortgage News called Moses a “mortgage guru” and said he developed
“many of Fannie
Mae's affordable housing and home improvement lending programs. Moses
ended his relationship with Frank just months after he left Fannie.
Even
after the relationship ended, however, Frank was a staunch defender of
Fannie Mae even as other experts suggested there were serious problems
building in Fannie Mae and Freddie Mac.
According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post,
Frank opposed giving the Bush administration the right to approve or
disapprove business activities that “could pose risk to the taxpayers.”
He told the Post he worried the Treasury Department “would sacrifice
activities that are good for consumers in the name of lowering the
companies’ market risks.”
Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were “exaggerated,” a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.
“These
two entities – Fannie Mae and Freddie Mac – are not facing any kind of
financial crisis,” Frank said to the Times. “The more people exaggerate
these problems, the more pressure there is on these companies, the less
we will see in terms of affordable housing.”
Frank
has also reaped campaign contribution benefits from Fannie Mae and its
counterpart Freddie Mac. According a front page story in the Sept. 19, 2008, Investor’s Business Daily by Terry Jones, Frank has received $40,100 in campaign cash over the past two decades from the GSEs.
Frank is ranked 16th on a list that includes both houses of Congress and fifth among his colleagues in the House. According to data from the Center for Responsive Politics’ OpenSecrets.org,
political action committees financed by both Freddie and Fannie have
contributed $3,017,797 to members of Congress since 1989. And according
to the July 16 issue of Politico, the two entities have spent a
whopping $200 million to buy influence – including not only campaign
donations to members of Congress, but also presidential campaigns and
lobbying efforts.
In a July 23 op-ed,
Wall Street Journal Editorial Page Editor Paul Gigot put the blame for
the GSEs’ collapse firmly on the members of the liberal establishment
who took money from Freddie and Fannie. “Fan and Fred also couldn't
prosper for as long as they have without the support of the political
left... This includes Mr. Frank and Sen. Chuck Schumer (D., N.Y.) on
Capitol Hill, as well as Mr. [Paul] Krugman and the Washington Post's
Steven Pearlstein in the press.”
Frank
was asked by CNN’s John Roberts on the Sept. 22, 2008 “American
Morning” about this and his opposition to reform Fannie Mae and Freddie
Mac. Originally, he claimed he didn’t think the two GSEs were facing
any problems when the issue first surfaced in 2003. He instead blamed
the Republican-controlled Congress for their ultimate fall, failing to
mention his friendly relationship with Fannie Mae and the contributions
it had made to his campaign over the years.
“Yes,
I did not think we were facing a crisis in 2003, but that didn't mean
we didn't have to have reform,” an animated Frank said when confronted
with the question. “Here’s the deal, the Republicans controlled
Congress from 1995 through 2006. They did zero to reform Fannie Mae and
Freddie Mac.”
However,
on Sept. 17, 2008, former Bush administration Deputy Chief of Staff
Karl Rove elaborated on the Bush administration’s efforts to curb
abuses at the two GSEs in 2003. He told Fox News’ “Hannity &
Colmes” that Frank was among the most aggressive opponents of White
House attempts to reform Fannie Mae and Freddie Mac.
“All
of this bad stuff on Wall Street happened because people got greedy and
the greed started at Fannie Mae and Freddie Mac,” Rove said. “And I
know this because five years ago, the administration was alerted by the
regulator, James Lockhart, that there was insufficient authority and
that these institutions – particularly Fannie – were out of control.”
Rove
said the Bush administration’s efforts to reform Fannie and Freddie
were opposed by congressional Democrats – specifically Frank and Senate
Banking Committee Chairman Christopher Dodd, D-Conn.
“And
I got to tell you, for five years, I was part of an effort at the White
House to fight this and our biggest opponents on the Hill who blocked
this every step of the way were people like Chris Dodd and Barney
Frank. And Fannie and Freddie are the $200 billion contagion at the
center of this.”
Frank has been quick to blame deregulation for some of the problems in the financial environment, as he did on Bloomberg television’s Sept. 19 “Political Capital with Al Hunt.” However, as earmark crusader Rep. Jeff Flake, R-Ariz.
pointed out – it’s not deregulation, but it was the structure of Fannie
Mae and Freddie Mac that had been guarded by Frank and other members of
Congress.
“Some
people point at deregulation,” Flake said to the Business & Media
Institute on Sept. 23. “It’s not deregulation at all. We have for far
too long shielded Fannie and Freddie for example, with the implicit and
now explicit guarantee. I just found it humorous.”
Flake
specifically named Frank as one of the members behind letting
allegations of transgressions at the two GSEs for slipping by without
oversight from Congress.
“Just
a few minutes ago, a reporter was asking me about this and saying,
‘Barney Frank is saying that’s just – because there were allegations,’
correct ones – ‘that Fannie and Freddie have been the playground for
politicians for years and now the other side is saying Fannie and
Freddie were just a small part of this and this goes far beyond.’ It
does, but these same people a couple of weeks ago said, ‘You got to
bail out Fannie and Freddie because they touch everything out there.
They touch nearly every mortgage out there.’ And because of that
explicit guarantee – that we would come and bail them out, nobody has
been subject to market discipline.”
Frank claims differently, according to a letter to the editor published in the Sept. 17, 2008 Wall Street Journal. Frank noted that in 2005 he supported regulating compensation for Fannie and Freddie executives.
“In
fact, my reform efforts had begun when we were still in the minority.
In 2005, I joined Michael Oxley, then chairman of the House Financial
Services Committee, in supporting legislation to increase the
regulation of Fannie and Freddie that passed the House by a vote of 330
to 90,” Frank wrote. “When former Congressman Richard Baker proposed to
examine the compensation structure of Fannie and Freddie's top
executives, and some members of Congress tried to block him, I
explicitly spoke out in support of his right to do that and our right,
as a Congress, to examine the GSE’s compensation practices.”
The
red flags were raised long before the government bailed out the two
GSEs in August 2008. The first egregious scandal involving Fannie Mae
occurred in 2004. A 2004 Wall Street Journal editorial was first to
point out claims in an OFHEO report that showed accounting malpractices
by the GSE.
“For
years, mortgage giant Fannie Mae has produced smoothly growing
earnings. And for years, observers have wondered how Fannie could
manage its inherently risky portfolio without a whiff of volatility, the Oct. 4, 2004, editorial,
“Fannie Mae Enron?” said. “Now, thanks to Fannie’s regulator, we know
the answer. The company was cooking the books. Big time.”
Well??? You won't hear about this in the main stream media. That, I can gaurentee you.
Senator Biden has done it again! In a recent speech in Greensburg Pennsylvania, Joe misrepresented John McCain's health care plan so badly, that even the Washington Post has taken him to task. Biden claims the McCain plan to be the "Largest increase on middle Americacan taxpayers in history"
Here's the truth From the Washington Posts Fact Checker.....
Democratic vice presidential hopeful Joe Biden claims that middle
class Americans will be slapped with the "largest tax increase in
American history" as a result of the McCain health care plan. It is
true that McCain has proposed taxing the health-care benefits that
Americans receive through their employers. However, Biden conveniently
overlooks the fact that the Republican nominee is offering tax-payers a
credit that should cover the cost of going out and buying insurance.
The Facts
John McCain wants to drastically overhaul
the health insurance system in order to encourage Americans to go out
and buy their own health care plans rather than relying on
employer-based plans. To achieve this, he plans to tax
employer-provided health benefits and provide a $2,500 tax credit
($5,000 for families) toward the cost of health insurance.
By most independent calculations, the McCain plan will leave most
taxpayers better off in strictly financial terms, at least until 2013.
After 2013, the benefits will begin to diminish. By 2018, taxpayers in
the top quintile will be slightly worse off, but middle-income
taxpayers will either break even or be slightly ahead. According to the
non-partisan Tax Policy Center,
the McCain proposals will result in a net benefit of $1,241 to the
average tax payer in 2009, $895 in 2013, and $386 in 2018.
"It is not fair to pull out just one part of the McCain proposal,"
said Eric Toder, a TPC analyst. "It is a package. They are giving back
more than they are taking away."
Jason Furman, director of economic policy for the Obama campaign, pointed out that the McCain campaign
skips over the tax increase side of the health plan on its website and
focuses instead on the tax credit. He also notes that, according to the
McCain website, the credit will be paid directly to insurance companies
to cover the cost of health insurance rather than to individuals.
This is true, but it is still a tax credit, in whatever manner it is
paid. If you are able to buy insurance for less than the cost of the
credit, you will be able to deposit the balance in a health savings
account, according to the McCain plan.
So how did Biden arrive at the $1 trillion price tag for "middle class" tax payers? Probably from the Office of the Management and Budget
which estimates the cost of excluding employer-provided health benefits
from tax revenues at $1.05 trillion between 2009 and 2013. Note that
this is all taxpayers, not just the "middle class."
Both campaigns have stretched the truth to the breaking point in
describing each other's tax plans. In this particular case, Joe Biden
has looked at only the negative side of the balance sheet--and ignored
the positive. It is simply not true that the McCain health plan
represents the largest "tax increase" in American history.
Remember, Obama selected Biden for his experience!
