2004 Footage Shows Democrats Defending Fannie/Freddie Illegal Book Keeping While Republicans Call for Oversight

Thanks to Naked Emperor News, this incredibly incriminating footage on C-Span from 2004 shows a Congressional hearing on oversight of Fannie Mae and Freddie Mac, investigating illegal book keeping of the government backed banking companies.

You’ll notice Democrats like Barney Frank, Maxine Waters, Gregory Meeks and Artur Davis saying Fannie Mae and Freddie Mac were doing just fine, didn’t need to be investigated and beating up on regulators trying to keep Fannie and Freddie honest.

Meanwhile, Republicans like Richard Baker, Ed Royce, Christopher Shays and Don Manzullo predict trouble ahead at Frannie and Freddie, call for more oversight and condemn the incredible profits of the CEOs of these government sponsored financial companies.

A couple weeks ago, I wrote that Barack Obama ranks #2 on the list of Senators receiving funds from Fannie Mae and Freddie Mac lobbyists and campaign contributions. The contributions span 20 years, yet in Obama’s 4 short years in the Senate he has received more contributions than any other Senator but Democrat Christopher Dodd, who has been in the Senate for several decades.

The lobbyist money and political contributions from Fannie and Freddie were an effort to dissuade the federal government via these Senators from looking too closely into their corrupt financial practices.

Now, WHO’S FAULT IS IT THAT WE’RE IN THIS ECONOMIC CRISIS?????

(Hat Tip: Ms. Underestimated)

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Comments

[Johnny]

And Dingy Harry had the temerity to stand in front of God and everybody and say "the Republicans caused this" while slobbering on about bipartisanship.

Anytime the government tries to 'help' people , look out. Fannie May and Freddy Mac = cheap, easy credit for people to buy homes they can't afford to make the mortgage payments on.

Democrats are caught red-handed on this one. Great catch, Amy, here's to hoping this makes the MSM, at least FOX. Bteer yet, let the blogosphere take the lead on this story.

[Bob S]

We will probably slide by this time on this crisis, but just barely. Unfortunately, we are facing two more crises that are just as bad if not worse than this one - energy and Social Security.

And therein lies two very sad facts. First, the same people who were hollering there were no problems with Fannie Mae and Freddie Mac, and who have led us into this mess, are the same ones hollering that there are no problems with energy and Social Security and refuse to do anything about it. Second, these same "leaders" manage to hide their malfeasance and incompetence and instead get the blame pinned on others, with the help of the propaganda media. Ill-informed and uninformed Americans who don't know the truth then buy right into their lies. All you need for proof of this is the rise of Obama in the polls.

If people don't get informed, and removes these failures from office, then we are doomed to far worse things in the future.

[Johnny]

Great post, Bob.

[mudkitty]

Amy, Amy, Amy...why don't you show the republicans who defended Fred and Fannie? They are in a much greater abundance.

[Amy Proctor]

The record and video evidence shows the opposite, that it is DEMOCRATS who defended Freddie and Fannie.

There's a reason why the majority of money given by Freddie/Fannie lobbyists and political donations were givin to Democrats and far less Republicans.

Here's the chart.

That doesn't mean Republicans weren't culpable as well. There were some, but the majority were Democrats and they are the ones, like Harry Reid and Barney Frank, who sit on their high horses and blame Republicans for their own incompetence.

Please produce some evidence that more Republicans defended Freddie/Fannie than Democrats.

No comment on the video? Did you watch it?

[Gawfer]

OF course Mudkitty will argue with the video; it impugns one of her heroines Maxine Waters and dismisses the legitimacy of Democrat Integrity.

[Amy Proctor]

In 2005, D-Sen Chuck Schumer at the Senate Banking Committee Hearing on oversight for Freddie and Fannie disputed any looming problems saying:

“I think Fannie and Freddie over the years have done an incredibly good job and are an intrinsic part of making America the best housed people in the world…if you look over the last 20 or whatever years, they’ve done a very, very good job.” –Chuck Schumer, April 6, 2006

Senator John McCain on the floor of the Senate May 25, 2006:

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac… and the sheer magnitude of these companies and the role they play in the housing market… the GSE’s need to be reformed without delay.”

From the White House:

President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs

2001

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

Should I go on?

[IHateMayoSandwiches]

Youre right Amy its ALL the democrats fault.

Democrats killed the glass-steagall act

Democrats passed the Gramm-Leach-Bliley Act allowing financial institutions to consolidate and take advantage of loop holes FDR had closed.

Democrats LOVE Deregulation.

A Democrat was at the helm when he got us into an ILLEGAL and IMMORAL occupation in the middle east based on half truths and outright lies.

A Democratic advisor responsible for deregulation called the public at large a "bunch of whiners"

The Democrat Alan Greenspan cut interest rates encouraging
AMERICANS to borrow because their standard of living had remained stagnant due to DEMOCRATIC president Reagans theory of trickle down economics.

Democrats had control of congress for the last 8 years.

How limited/myopic is your knowledge of history Amy?

[Gawfer]

Hey Mayo,
you forgot Democrats flew the planes into the twin towers and the Pentagon.

[Michael Ejercito]

Democrats passed the Gramm-Leach-Bliley Act allowing financial institutions to consolidate and take advantage of loop holes FDR had closed.

A Democrat signed it.

[redhawk]

With this evidence , time has come to bring these Idiots in front of a public hearing just like they did to the equally inept Auto CEO's and demand these Moron's resignations starting with Frank.. Dodd.. Waters.. and Company..