Allegations of political lobbying are now investigated.
If you think Congress hasn’t done anything to regulate Freddie Mac, think again. The Associated Press released a report revealing that the government sponsored enterprise is currently investigated over allegations that it hired a stealth lobbyist to block legislation that would sell its toxic mortgages and probe into the financial benefits of its top management.
The report states, “Lawyers hired by mortgage finance giant Freddie Mac are quietly investigating the firm’s own $2 million lobbying campaign, The Associated Press has learned. The lobbying effort helped quash proposed new regulations on the company before the housing market collapsed. One of Washington’s leading law firms, Covington & Burling LLP, has spent more than a month interviewing current and former Freddie Mac employees and executives, according to three people familiar with the matter.”
How could they vote against the tightening of rules over Freddie? Back then, there were no speculations over a housing bubble that confounded the market. More so, the Securities and Exchange Commission has not exercised its oversight responsibilities too well. Freddie Mac officials have hired lobbyist DCI of Washington to block any legislation that would trim down the GSE’s finances and misdealings.
But only Freddie Mac was mentioned. We found out that Sen. Hagel, as early as June 2003 (two years before the passing), was already planning a legislation that would investigate the Office of the Federal Housing Oversight regarding the undisclosed earnings of Freddie Mac officials reportedly worth over $4 million amassed in a period of three short years. The plan also involved investigations over Fannie Mae and the Federal Home Loan Bank. The legislation included giving the regulator the authority to close down a failing GSE and protect against a taxpayer bailout.
Well, it seems pretty obvious that this bill wasn’t passed at all for Freddie Mac and Fannie Mae are suffering a combined loss of $54 billion. They’re not closed own plus the government has placed them under conservatorship. We’re awaiting the probing of this issue and we can’t wait to see Freddie Mac officials getting grilled over their excessive compensation. Same old story, new characters.