While presidential hopeful Newt Gingrich was forced to defend his lucrative former role with Freddie Mac this week, the mortgage giant and its larger cousin Fannie Mae had a roster of Washington heavyweights on their payroll for years, many of them Democrats.
While presidential hopeful Newt Gingrich was forced to defend his lucrative former role with Freddie Mac this week, the mortgage giant and its larger cousin Fannie Mae had a roster of Washington heavyweights on their payroll for years, many of them Democrats.
The two entities spent over $170 million on political and lobbying operations in a 10-year period leading up to the financial crisis of 2008 when both were seized by the government as they teetered on the brink of failure, according to the Center for Responsive Politics.
Fannie and Freddie hired figures such as Tom Donilon, now President Barack Obama’s national security adviser, and Rahm Emanuel, Obama’s former White House chief of staff, as part of a campaign aimed at protecting government ties that allowed them to borrow money cheaply from financial markets.
“It was a mob-like operation,” said a senior congressional official who over the years dealt with the political and lobbying operations at the firms, the two biggest sources of U.S. mortgage finance. “They had tentacles everywhere.”
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