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Posts Tagged ‘Barney’

Barney Frank and Chuck Schumer’s Role in the Fannie Mae Failure

Below is an editorial that appeared in the New Hampshire Union Leader that talks about Barney Frank and Chuck Schumer and their roles in the failure of Fannie Mae and Freddie Mac.
Here is the editorial in it’s entirely:
One month from tomorrow, U.S. Rep. Barney Frank, D-Mass., will be the keynote speaker at the New Hampshire Democratic Party’s annual Jefferson-Jackson dinner. It is a coveted and high-profile role previously filled by such notables as Hillary Clinton and Al Gore. The Democrats’ choice of House Financial Services Committee Chairman Barney Frank is, therefore, very revealing.
The party announced Frank as the keynote speaker on Sept. 11 — three days after the U.S. government took control of Fannie Mae and Freddie Mac, costing taxpayers untold billions. That takeover probably could have been prevented had Frank not worked to thwart every attempt to limit the risks taken on by the two government-sponsored mortgage giants.
For 16 years reformers in Congress have tried to improve oversight of Fannie Mae and Freddie Mac and prevent the government-chartered companies from putting the housing market and the whole economy at risk. All that time, Frank was involved in efforts to block those attempts, and in the last eight years he was a leader of those efforts.
In 2002, shortly before accounting irregularities were exposed at both companies, Frank said, “I do not regard Fannie Mae and Freddie Mac as problems,” The Wall Street Journal reported. After the Freddie Mac accounting scandal in 2003, Frank said, “I do not think we are facing any kind of a crisis.”
But there was a crisis, thanks in large part to Frank, Sen. Charles Schumer and others on the leash of these companies. In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies’ mortgage-backed-securities portfolios, among other changes.
(All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.)
In fact, Frank & Co. made matters worse by pushing Fannie Mae and Freddie Mac to take on greater risk. They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.”
Even now, after the government took the companies over (which Frank repeatedly said over the years was not a possibility), Frank opposes limits on the amount of money they can risk on mortgage backed securities — the one reform that might have done the most to prevent the current meltdown and probably would do the most to keep it from happening again.
Barney Frank is the very symbol of Washington’s deliberate refusal to prevent the collapse — the predicted collapse — of Fannie Mae and Freddie Mac. And this is the guy the New Hampshire Democratic Party showcases at its most prestigious annual event. That ought to tell you a lot right there.
Besides their total ignorance about the troubles that Fannie Mae and Freddie Mac were headed towards is the fact that these two men, and other Democrats, helped to make the problem worse.
In fact, Frank & Co. made matters worse by pushing Fannie Mae and Freddie Mac to take on greater risk. They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements
These companies were forced to loan money to people who couldn’t afford it in the interest of “being fair.” Rules were relaxed and money was loaned and predictably low income families defaulted on loans that they never had any business getting in the first place and now you and I have to pay for it.
Another liberal policy and another liberal failure. And now we must all pay for it. But hell, they meant well.

Barney Frank To File Bill Legalizing Marijuana

By Nicole Belle
Rep. Barney Frank said he plans to file a bill to legalize “small amounts” of marijuana.
Frank announced his plans late Friday on the HBO show “Real Time,” hosted by Bill Maher.
“I’m going to file a bill as soon as we go back to remove all federal penalties for the possession or use of small amounts of marijuana,” Frank, a Massachusetts Democrat, told Maher.
Frank didn’t define “small amounts.” Efforts to reach Frank on Saturday were not immediately successful.
Frank said he’d filed a similar bill in the Massachusetts Legislature in the 1970s, but hasn’t tried since he was elected to Congress.
“I finally got to the point where I think I can get away with it,” he said.
Frank said he thinks “its time for the politicians in this one to catch up to the public. The notion that you lock people up for smoking marijuana is pretty silly.”
I am totally for legalization of marijuana, but I have to differ with Frank on this: to think that at this time with this administration that you could get away with a bill legalizing pot actually is what sounds silly.

Barney Frank supports ACORN’s freakin’ fraud

Naturally. Of course. Not surprised. Wouldn’t have expected anything less.
The same guy who led us down the primrose path on Fannie Mae and Freddie Mac is now out there as ACORN’s loudest supporter.
ACORN, the Association of Community Organizations for Reform Now, may have pulled off the most widespread voter fraud in American history last year. They’re being investigated or have already been convicted in 14 states.
In response, Minnesota Congresswoman Michelle Bachman proposed an entirely reasonable amendment that would have barred any organization under federal indictment from receiving funds from the mortgage reform bill.
But blatantly Barney Frank, ACORN’s congressional sugar daddy, saw to it that the amendment was removed, defeated, condemned to the ash heap of history. Remarkably, ACORN will now have access to up to $8.5 billion (with a “b”) from President Obama’s various “stimulus” schemes.

Frank claims ACORN isn’t eligible for any of the moneyOf course, this is the same guy who defended Fannie Mae and Freddie Mac and had a prostitution ring operating out of his condo.
Apparently the prostitution ring is still operating, but has moved its headquarters to Washington, DC.

Media Mum on Barney Frank’s Fannie Mae Love Connection

Democratic House Financial Services Committee Chair promoted GSEs while former ‘spouse’ was Fannie Mae executive.

By Jeff Poor
Business & Media Institute

Are journalists playing favorites with some of the key political figures involved with regulatory oversight of U.S. financial markets?

MSNBC’s Chris Matthews launched several vitriolic attacks on the Republican Party on his Sept. 17, 2008, show, suggesting blame for Wall Street problems should be focused in a partisan way. However, he and other media have failed to thoroughly examine the Democratic side of the blame game.

Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. And one of Fannie Mae’s main defenders in the House – Rep. Barney Frank, D-Mass., a recipient of more than $40,000 in campaign donations from Fannie since 1989 – was once romantically involved with a Fannie Mae executive.

The media coverage of Frank’s coziness with Fannie Mae and his pro-Fannie Mae stances has been lacking. Of the eight appearances Frank made on the three broadcasts networks between Jan. 1, 2008, and Sept. 21, 2008, none of his comments dealt with the potential conflicts of interest. Only six of the appearances dealt with the economy in general and two of those appearances, including an April 6, 2008 appearance on CBS’s “60 Minutes” were about his opposition to a manned mission to Mars.

Frank has argued that family life “should be fair game for campaign discussion,” wrote the Associated Press on Sept. 2. The comment was in reference to GOP vice presidential nominee Sarah Palin and her pregnant daughter. “They’re the ones that made an issue of her family,” the Massachusetts Democrat said to the AP.

The news media have covered the relationship in the past, but there have been no mentions since 2005, according to Nexis and despite the collapse of Fannie Mae. The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.

Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) – all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk. Frank’s office has been unresponsive to efforts by the Business & Media Institute to comment on these potential conflicts of interest.

While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.

He has served on the committee since becoming a congressman in 1981 and became the ranking Democrat on the committee in 2003. He became chairman of the committee, now called the House Financial Services Committee, in 2007.

Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).

“Herb Moses, who helped develop many of Fannie Mae’s affordable housing and home improvement lending programs, has left the mortgage industry,” Darryl Hicks wrote for NMN. “Mr. Moses – whose last day was Feb. 13 – spent the past seven years at Fannie Mae, most recently as director of housing initiatives. Over the course of time, he played an instrumental role in developing the company’s Title One and 203(k) home improvement lending programs.”

Hicks explained in his story how Moses orchestrated a collaborative effort between Fannie Mae and the Department of Agriculture.

“The Dartmouth grad also played a crucial role in brokering a relationship between Fannie Mae and the Department of Agriculture,” Hicks wrote. “This led to the creation of Fannie Mae’s rural housing program where the secondary marketing agency agreed to purchase small farm loans insured through the department.”

While Moses served at Fannie Mae and was Frank’s partner, Frank was actively working to support GSEs, according to several news outlets.

In 1991, Frank and former Rep. Joe Kennedy, D-Mass., lobbied for Fannie to soften rules on multi-family home mortgages although those dwellings showed a default rate twice that of single-family homes, according to the Nov. 22, 1991, Boston Globe.

BusinessWeek reported in its Nov. 14, 1994, issue that Fannie Mae called on Frank to exert his influence against a Housing & Urban Development proposal that would force the GSE to focus on minority and low-income buyers and police bias by lenders regardless of their location. Fannie Mae opposed HUD on the issue because it claimed doing so would “ignore the urban middle class.”

Moses left Fannie in 1998 to start his own pottery business. National Mortgage News called Moses a “mortgage guru” and said he developed “many of Fannie Mae’s affordable housing and home improvement lending programs. Moses ended his relationship with Frank just months after he left Fannie.

Even after the relationship ended, however, Frank was a staunch defender of Fannie Mae even as other experts suggested there were serious problems building in Fannie Mae and Freddie Mac.

According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that “could pose risk to the taxpayers.” He told the Post he worried the Treasury Department “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks.”

Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were “exaggerated,” a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.

“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis,” Frank said to the Times. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Frank has also reaped campaign contribution benefits from Fannie Mae and its counterpart Freddie Mac. According a front page story in the Sept. 19, 2008, Investor’s Business Daily by Terry Jones, Frank has received $40,100 in campaign cash over the past two decades from the GSEs.

Frank is ranked 16th on a list that includes both houses of Congress and fifth among his colleagues in the House. According to data from the Center for Responsive Politics’ OpenSecrets.org, political action committees financed by both Freddie and Fannie have contributed $3,017,797 to members of Congress since 1989. And according to the July 16 issue of Politico, the two entities have spent a whopping $200 million to buy influence – including not only campaign donations to members of Congress, but also presidential campaigns and lobbying efforts.

In a July 23 op-ed, Wall Street Journal Editorial Page Editor Paul Gigot put the blame for the GSEs’ collapse firmly on the members of the liberal establishment who took money from Freddie and Fannie. “Fan and Fred also couldn’t prosper for as long as they have without the support of the political left… This includes Mr. Frank and Sen. Chuck Schumer (D., N.Y.) on Capitol Hill, as well as Mr. [Paul] Krugman and the Washington Post’s Steven Pearlstein in the press.”

Frank was asked by CNN’s John Roberts on the Sept. 22, 2008 “American Morning” about this and his opposition to reform Fannie Mae and Freddie Mac. Originally, he claimed he didn’t think the two GSEs were facing any problems when the issue first surfaced in 2003. He instead blamed the Republican-controlled Congress for their ultimate fall, failing to mention his friendly relationship with Fannie Mae and the contributions it had made to his campaign over the years.

“Yes, I did not think we were facing a crisis in 2003, but that didn’t mean we didn’t have to have reform,” an animated Frank said when confronted with the question. “Here’s the deal, the Republicans controlled Congress from 1995 through 2006. They did zero to reform Fannie Mae and Freddie Mac.”

However, on Sept. 17, 2008, former Bush administration Deputy Chief of Staff Karl Rove elaborated on the Bush administration’s efforts to curb abuses at the two GSEs in 2003. He told Fox News’ “Hannity & Colmes” that Frank was among the most aggressive opponents of White House attempts to reform Fannie Mae and Freddie Mac.

“All of this bad stuff on Wall Street happened because people got greedy and the greed started at Fannie Mae and Freddie Mac,” Rove said. “And I know this because five years ago, the administration was alerted by the regulator, James Lockhart, that there was insufficient authority and that these institutions – particularly Fannie – were out of control.”

Rove said the Bush administration’s efforts to reform Fannie and Freddie were opposed by congressional Democrats – specifically Frank and Senate Banking Committee Chairman Christopher Dodd, D-Conn.

“And I got to tell you, for five years, I was part of an effort at the White House to fight this and our biggest opponents on the Hill who blocked this every step of the way were people like Chris Dodd and Barney Frank. And Fannie and Freddie are the $200 billion contagion at the center of this.”

Frank has been quick to blame deregulation for some of the problems in the financial environment, as he did on Bloomberg television’s Sept. 19 “Political Capital with Al Hunt.” However, as earmark crusader Rep. Jeff Flake, R-Ariz. pointed out – it’s not deregulation, but it was the structure of Fannie Mae and Freddie Mac that had been guarded by Frank and other members of Congress.

“Some people point at deregulation,” Flake said to the Business & Media Institute on Sept. 23. “It’s not deregulation at all. We have for far too long shielded Fannie and Freddie for example, with the implicit and now explicit guarantee. I just found it humorous.”

Flake specifically named Frank as one of the members behind letting allegations of transgressions at the two GSEs for slipping by without oversight from Congress.

“Just a few minutes ago, a reporter was asking me about this and saying, ‘Barney Frank is saying that’s just – because there were allegations,’ correct ones – ‘that Fannie and Freddie have been the playground for politicians for years and now the other side is saying Fannie and Freddie were just a small part of this and this goes far beyond.’ It does, but these same people a couple of weeks ago said, ‘You got to bail out Fannie and Freddie because they touch everything out there. They touch nearly every mortgage out there.’ And because of that explicit guarantee – that we would come and bail them out, nobody has been subject to market discipline.”

Frank claims differently, according to a letter to the editor published in the Sept. 17, 2008 Wall Street Journal. Frank noted that in 2005 he supported regulating compensation for Fannie and Freddie executives.

“In fact, my reform efforts had begun when we were still in the minority. In 2005, I joined Michael Oxley, then chairman of the House Financial Services Committee, in supporting legislation to increase the regulation of Fannie and Freddie that passed the House by a vote of 330 to 90,” Frank wrote. “When former Congressman Richard Baker proposed to examine the compensation structure of Fannie and Freddie’s top executives, and some members of Congress tried to block him, I explicitly spoke out in support of his right to do that and our right, as a Congress, to examine the GSE’s compensation practices.”

The red flags were raised long before the government bailed out the two GSEs in August 2008. The first egregious scandal involving Fannie Mae occurred in 2004. A 2004 Wall Street Journal editorial was first to point out claims in an OFHEO report that showed accounting malpractices by the GSE.
“For years, mortgage giant Fannie Mae has produced smoothly growing earnings. And for years, observers have wondered how Fannie could manage its inherently risky portfolio without a whiff of volatility, the Oct. 4, 2004, editorial, “Fannie Mae Enron?” said. “Now, thanks to Fannie’s regulator, we know the answer. The company was cooking the books. Big time.”

Barney Frank calls John Fund a ‘liar’ and a ‘coward’ and explains how the Right Wing Noise machine operates

By John Amato
Barney Frank took the gloves off on the floor and called John Fund out for making up a story about a phony bill and then he outlined how the right wing noise machine works as a propaganda arm of the republicans to push that narrative into the mainstream.
Frank: You are entirely wrong about me and in the absence of your being able to show any basis which you made such a statement to ask you to acknowledge that fact. He’s not only a liar, he’s a coward. He wouldn’t do it. My staff member asked him, called him up and said, what was this based on? Well, I made a mistake. Well, have you made a retraction? Oh, yeah, he said. Can we see it? “I told a couple of people.” Mr. Fund makes it up. It’s a lie, it’s a myth. There was nothing there and it’s to discredit all democrats.
His right-wing cohorts echo it and echo it. The next thing is it will be on the floor in the next two weeks. This is the democrat disregard for the electoral process. And when we call Mr. Fund’s attention to the fact that this was a lie, what does he say? Whoops. but he’s not going to tell anybody about it. Mr. Speaker, this is not the only case of this and I know this has happened before. But because I was directly involved here, I was in position to document this. It begins with a lie from this editorial writer from “the Wall street journal.” it is then a lie repeated by his right-ring colleagues. He refuses to do anything about.
It doesn’t get any clearer than that. Frank posted the entire story on the web.
Frank responded to fabricated accounts of his supposed plans to introduce a bill on “universal voter registration.” The story began in November at the conservative Restoration Weekend conference in Palm Beach, Florida, where for $1,700 per person activists were able to hear talks by conservative opinion leaders on the theme, “Defending our Country and Culture.” At one session, John Fund, a writer for the editorial pages of the Wall Street Journal, claimed that Congressman Barney Frank and Senator Chuck Schumer had hatched a plan to game the election system by registering felons, illegal aliens and others to vote:
Democrats were very rattled by the November 3rd election results. What do liberals do when they lose elections? They change the rules. In January, Chuck Schumer and Barney Frank will propose universal voter registration.
What is universal voter registration? It means all of the state laws on elections will be overridden by a federal mandate. The feds will tell the states, “Take everyone on every list of welfare recipients you have, take everyone on every list of unemployed you have, take everyone on every list of property owners, take everyone on every list of driver’s license holders, and register them to vote regardless of whether they want to be.”
The allegation against Congressman Frank is absolutely false and has no basis in reality. The Congressman in fact heard about it for the first time after the story was launched in the conservative media.
On January 5th, Glenn Beck of Fox News, which like the Wall Street Journal is owned by Rupert Murdoch, repeated the same fallacious story, specifically citing John Fund as his source. The next day, Rush Limbaugh retold the story on nationwide radio, also quoting Fund. On January 7th, the Washington Times, owned by Reverend Sun Yung Moon’s Unification Church, ran an editorial titled “Letting Crooks and Illegals Vote.” None of the outlets called Frank’s office to verify the story.
In addition, right-wing web sites have also posted the story online, often embedding video of Mr. Fund’s talk, giving the fictitious story an even longer life-span.
Congressman Frank addressed a letter to John Fund on January 13th, asking the writer to either corroborate or publicly repudiate his statement. When called by a staffer who was seeking a fax number for Mr. Fund, Fund claimed that he had issued a retraction. When asked for a copy of the retraction, he stated that he had not actually issued a written correction, but that he had simply told a few inquiring bloggers that he had made a mistake. To date, Mr. Fund has still not issued a public retraction.
Fund’s idea of a retraction was to tell a few people. The Wall Street Journal should suspend him from their pages if they had any real integrity. Fund did his job well. Promote a lie and then watch it take off because he knows that once the story is out there—then it’s out there.

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