Fannie Mae and Freddie Mac expose the corruption culture in Washington, DC

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From: Judicial Watch

Fannie and Freddie Expose the Corruption Culture in Washington

The federal government announced earlier this week that it has 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 and dirigiste to me. But I'll leave the free market to critique our economic conservative friends. 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 this city.

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.

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.

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.)

(And don't worry, the mortgage expert Charlie Rangel will continue to help oversee the mortgage companies in Congress.)

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, on the other hand, has more than a few leads to investigate and I'll keep you informed as to what we find.

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U.S. Rep. John Murtha is 2007 Porker of the Year

Well, it's been voted on by you, the citizens at Citizens Against Government Waste-- U.S. Representative John Murtha (Dem.-PA) is the "coveted" (by Murtha) 2007 Porker of the Year!

You saw him throw a temper tantrum and threaten fellow appropriations committee members where his earmarks are often made last May, and voted him Porker of the Month.

But he didn't stop there. Rep. Jack Murtha has long been known inside the Beltway for using threats, power plays, and backroom deals to control spending decisions. There is an area of the House floor known as “Murtha’s Corner,” where the legendary appropriator dispenses earmarks.

Get more of the sordid details of this legendary porkmeister at a webpage devoted just for this "coveted" prize at Swine Line blog.

UPDATE: Judicial Watch's Corruption Chronicles blog shares with us the annual appreciation dinner for Rep. Murtha by the same contractors that enjoy the free federal money known as earmarks:

" To show their appreciation, the contractors hold an annual payback dinner for Murtha at a fancy Washington-area venue. This year’s event (“an evening with Jack and Joyce Murtha”) is scheduled for February 27 at the Ritz-Carlton Pentagon City in Virginia, across the Potomac from Washington. Diners (earmark recipients) will pay $1,500 a person to eat with Murtha and his wife.

Of interesting note is that the invitations to the costly dinner were sent out right before the annual deadline for earmark applications. Murtha ended up getting more earmark dollars than any other legislator in the massive 2008 military spending bill. He secured 48 earmarks for a total $150.5 million. "

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Sunshine Week is March 16- 22, 2008

As Judicial Watch says, open government is honest government. The American citizen, through the FOIA (Freedom of Information Act), has rights to request information, except homeland security-sensitive info, from the federal government; all states have laws regulating public information requests, too.

SunshineWeek.org has myriad materials for use free during Sunshine Week, March 16-22, by any participant. Some resources are themed specifically to the Sunshine Campaign initiative. Others are the general Sunshine Week items offered each year, such as editorial cartoons, logos and opinion columns.

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Incumbent protection scheme degrades democracy

The Corruption Chronicles blog, a favorite of mine from Judicial Watch, writes that legislators in the Pennsylvania House use taxpayer funds to pay their staff for re-election campaign work. This includes House Majority Leader Bill DeWeese.

On the federal level, many of our representatives employ at least one full-time staff person for nothing but campaign work; but most presumably use their campaign funds. Judicial Watch's story pertains to the state of Pennsylvania legislature; who knows how many other state officeholders around our country employ the same tactic?

Using public funds to pay campaign workers is illegal; PA's state attorney general has launched an investigation into the taxpayer abuse. State legislators have a great responsibility to conduct themselves in an ethical manner, for thousands of voters entrust them with their leadership every two years. Incumbent protection schemes such as this degrade our democracy, and the fairness of our electoral system.

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