Newt Gingrich’s Freddie Mac Fib
During last night’s debate, Newt Gingrich was asked by John Harwood about his ties to Freddie Mac, and whether he had ever engaged in lobbying on behalf of the entity. Gingrich responded that he was paid $300,000 to be a “history adviser:”
HARWOOD: Since — since you mentioned Fannie and Freddie, Speaker Gingrich, 30 seconds to you, your firm was paid $300,000 by Freddie Mac in 2006. What did you do for that money?
GINGRICH: Were you asking me?
GINGRICH: I offer them advice on precisely what they didn’t do.
Look — look, this is not — this is not…
HARWOOD: Were you not trying to help Freddie Mac fend off the effort by the Bush administration…
GINGRICH: No. No, I do — I have never…
HARWOOD: … and the — to curb Freddie Mac.
GINGRICH: I have — I assume I get a second question. I have never done any lobbying. Every contract was written during the period when I was out of the office, specifically said I would do no lobbying, and I offered advice.
And my advice as a historian, when they walked in and said to me, “We are now making loans to people who have no credit history and have no record of paying back anything, but that’s what the government wants us to do,” as I said to them at the time, this is a bubble. This is insane. This is impossible.
GINGRICH: It turned out, unfortunately, I was right and the people who were doing exactly what Congresswoman Bachmann talked about were wrong. And I think it’s a good case for breaking up Fannie Mae and Freddie Mac and getting much smaller institutions back into the private sector to be competitive and to be responsible for their behavior.
However, as this report from the Associated Press back in 2008 shows, that wasn’t entirely true, and Gingrich’s services for Freddie Mac involved more than giving history lectures:
The records obtained by the AP reflect growing concern within Freddie Mac over a chorus of criticism from Republicans worried that Freddie Mac and Fannie Mae had grown too big. The two companies owned or guaranteed over $5 trillion in mortgages.
The Bush administration and Federal Reserve Chairman Alan Greenspan were sounding the alarm about the potential threat to the nation’s financial health if the fortunes of the two mammoth companies turned sour. They did eventually, when they took on $1 trillion worth of sub-prime mortgages and when their traditional guarantee business deteriorated. Commercial banks regarded Freddie Mac and Fannie Mae as competitors and were anxious to pick up business that would result from scaling back the two companies.
Pushing back, Freddie Mac enlisted prominent conservatives, including Gingrich and former Justice Department official Viet Dinh, paying each $300,000 in 2006, according to internal records.
Gingrich talked and wrote about what he saw as the benefits of the Freddie Mac business model.
Dinh wrote a legal analysis of private property rights that viewed a hypothetical government-enforced sale of Freddie Mac assets as constitutionally suspect.
That’s a lot more than “history,” it sounds to me like Gingrich was paid to promote Freddie Mac’s interests in the face of Republican pressure. He may not have directly lobbied Members of Congress, although that’s worth looking into I would think, but he most certainly was part of their PR campaign designed to fend off additional government regulation. The idea that he was sitting there telling them what was wrong with their business model is totally fanciful.