Financial Crisis: Dems Try to Rewrite History – Again

17 Sep, 2008 by McQ

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As I pointed out previously, Nancy Pelosi is clueless. Apparently history, at least for her, started after at least 2005.

As Ed Morrissey points out, 2005 would be the year John McCain made this speech:

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

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. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

Hot Air has the gist of the legislation he was supporting. The bill never made it out of the Senate committee. And remember, in 2005, the Senate was essentially an even body in terms of Dems and Reps.

Chris Dodd, then the ranking member of the Banking Committee and now its chair, was in the middle of receiving preferential loan treatment from Countrywide Mortgage, one of the companies gaming the system in the credit crisis.

Barack Obama? Well he hadn’t shown up on the scene yet. But when he did, boy did he make up for lost time. Fox’s John Gibson notes:

A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. Senators getting big Fannie and Freddie political bucks were Democrats and number two is Senator Barack Obama.

Now, remember, he has only been in the Senate four years but still managed to grab the number two spot ahead of John Kerry, decades in the senate, and Chris Dodd who is chairman of the Senate Banking Committee. Fannie and Freddie have been creations of the congressional democrats and the Clinton white house, designed to make mortgages available to more people, and as it turned out, some people who couldn’t afford them. Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration’s White House budget director Franklin Raines ran Fannie and collected 50 million dollars. Jamie Gurilli, Clinton Justice Apartment Official, worked for Fannie and took home 26 million dollars. Big Democrat Jim Johnson, recently on Obama’s VP search committee has hauled in millions from his Fannie Mae C.E.O. job.

Now remember, Obama’s ads and stump speeches attack McCain and Republican policies for the current financial turmoil. It is demonstrably not Republican policy and worse, it appears the man attacking McCain, Senator Obama, was at the head of the line when the piggy’s lined up at the Fannie and Freddie trough for campaign bucks.

And, as I’ve cited twice, in 2003, two years earlier than the McCain speech, we have the Bush Administration pushing for reform and the Democrats saying the problems are an “exaggeration” and that there is no problem with Freddie and Fanny.

So the next time your hear Obama claim he doesn’t take money from lobbyists, you know what to say (and cite). And the next time you hear Obama try to lay this exclusively at the feet of Republicans, you can pretty much point to the same information to refute that obvious bit of nonsense.

I know I keep going over this and stressing it, but this is important. It points to some major league dissembling on the part of the Democrats as they try to frame this as exclusively a Republican and administration failure when it fact, the blame lays mostly at their feet. The “great reformers”, the “we don’t deal with lobbyists” bunch, the group who claims to understand the economy, demand more regulation and have the best interests of Americans at heart simply don’t have the facts, in this case, to support their assertions.

[Crossposted at QandO]