Big Fat Story
Chief of staff earned $300K at Freddie Mac for seemingly little work.
Campaign contributions are one way politicians benefit from staying on friendly terms with big business, but the real prize often comes after they leave office, when ex-lawmakers can earn hefty payouts by taking positions on corporate boards. One such lawmaker is White House Chief of Staff Rahm Emanuel, a Clinton administration veteran whose $320,000 payout for 14 months of work at failed mortgage giant Freddie Mac is now drawing attention to the practice. Writing for The Swamp, journalists Bob Secter and Andrew Zajac noted that Emanuel's job carried seemingly few responsibilities despite its high salary. "The board met no more than six times a year," they wrote. "Unlike most fellow directors, Emanuel was not assigned to any of the board's working committees, according to company proxy statements." During Emanuel's stint, executives pushed through a plan to artificially boost their profit figures, leading to an accounting scandal that resulted in Freddie Mac paying out $585 million in fines and legal settlements.
Photo: Chip Somodevilla / Getty Images
Influential Dem looked the other way on mortgage giants' problems.
When the government was forced to rescue Fannie Mae and Freddie Mac from collapse last September, eyes quickly turned to Rep. Barney Frank, the influential Massachusetts Democrat who heads the House Financial Services Committee. Over the previous decade, Frank repeatedly opposed efforts to regulate the two mortgage giants. In 2000, he opposed a bill to reform oversight of the companies, saying "there's no federal liability there whatsoever." Two years later, during another push, he said he did not "regard Fannie Mae and Freddie Mac as problems." Even after a major multibillion-dollar accounting scandal at Freddie Mac in 2003 led to massive fines, he held his ground. "I do not think we are facing any kind of crisis," he said at the time, according to the Wall Street Journal. Later, he added that the two firms posed "no threat to the Treasury." Now Frank is taking a lead role in the House in combating the financial crisis. He has taken some $40,100 in contributions from Fannie Mae and Freddie Mac over the last 20 years, according to OpenSecrets.org.
Photo: Chip Somodevilla / Getty Images
He raked in contributions from the financial sector by the millions.
Wall Street's own senator, both in location and spirit, is Chuck Schumer, who drew renewed criticism for his years of campaign largesse from the big banks once the economic crisis began. According to the New York Times, Schumer "plays an unrivaled role in Washington as beneficiary, advocate, and overseer of an industry that is his hometown’s most important business." After speaking with dozens of finance industry executives at a breakfast fund-raiser days before the $700 billion bailout, Schumer proved so encouraging that executives at the firms sent $135,000 in campaign donations over the next week. The donations were hardly anything new for Schumer, who has over the years collected six-figure contributions from employees of Bear Stearns ($126,400), Citigroup ($111,550), Merrill Lynch ($127,00), and other top financial institutions, all while leading the charge for deregulation back in Washington.
Photo: Brendan Smialowski / Getty Images
The Enablers
Rahm Emanuel is catching heat for his payday at Freddie Mac, one of the originators of the meltdown. It's a reminder that the pols condemning bonus payouts were themselves handsomely rewarded while failing to blow the whistle on the reckless money men.
Senator Chris Dodd has long benefitted from many of the players at the center of the financial crisis, using his influential position on the Senate Banking Committee to soak up donations galore from affected companies. Dodd's epic list of contributions (just under a third of the $43 million in donations he's accepted over the last 20 years came from the finance, insurance, or real-estate industry) has made him an electoral target in Connecticut even as the region has trended toward Democrats. Recently his potential GOP opponent, Rob Simmons, bashed him for inserting language in the stimulus bill that allowed AIG to go through with its controversial bonus payments. (Dodd was asked to amend the bill by the Treasury Department.) Dodd now stands tied in one poll, a shocking result for a Senate legend.
Photo: Alex Wong / Getty Images
Sometimes a thank-you card just isn't enough when Congress sends your firm billions of dollars in bailout money. According to a report by Newsweek, political action committees representing five major TARP recipients paid out $85,300 to lawmakers in the first two months of 2009 alone. Take Bank of America, for example, which contributed to influential politicians like House Majority Leader Rep. Steny Hoyer ($1,500) as well as members of the relevant House and Senate banking panels ($15,000). Another major recipient of taxpayer funds, Citigroup, paid out $29,620, including $2,500 to House Minority Whip Eric Cantor. "This certainly appears to be a case of TARP funds being recycled into campaign contributions," Brett Kappel, a D.C. lawyer who tracks donations, told Newsweek.
Photo: Spencer Platt / Getty Images
Critics are bashing Treasury Secretary Timothy Geithner as a Wall Street insider, but the career Treasury official is nothing compared to his predecessors in this regard. President Clinton's Treasury Secretary, Robert Rubin, left his White House job for a position as chairman of Citigroup in 1999, where he raked in $17 million as of 2008, even while the company sowed the seeds for financial meltdown with its risky investments. Critics also contend that his policies helped contribute to the economic collapse. Economist Dean Baker recently called Rubin a member of the "high priesthood of the bubble economy," and wrote that his "policy of one-sided financial deregulation is responsible for the current economic catastrophe." Rubin, an outside adviser to Obama, also has extensive ties to other members of the administration—Geithner, along with White House adviser Lawrence Summers and budget director Peter Orszag, are all Rubin proteges.
Photo: Koichi Kamoshida / Getty Images
neverlate
How are we going to get out of this mess if all the key players in the rescue effort are complicit in creating it? Why couldn't Obama reach out to someone with clean hands instead of the usual Wall Street suspects?
W3Research
Washington Mutual - WaMu Investors Demand Hearing, Investigation & Reversal of Washington Mutual Seizure.
WAMUQ: Shareholder Information.
http://www.wamu-shareholders-resources.com
http://www.wamurape.org
http://www.wamustory.com
http://www.wamuqd.com
W3Research
Washington Mutual - WaMu Investors Demand Hearing, Investigation & Reversal of Washington Mutual Seizure.
WAMUQ: Shareholder Information.
http://www.wamu-shareholders-resources.com
http://www.wamurape.org
http://www.wamustory.com
http://www.wamuqd.com
sonofloud
Where is Obama in your list?
He raked in millions of dollars in campaign contributions from Goldman Sachs, Merrill Lynch, and many other Wall Street corporations.
Hawnzz
This seems to be rather one sided. Where is the rest of the political spectrum in this analysis? Picking out a few individuals from the current administration, and then not looking at the bigger picture doesn't make this relevant. Where is the analysis of the Bush administration? (Of Congress and the Senate?) Or is the point of this simply to ruffle feathers.... aaahhh... gotcha.
FNYGY1
This illustrates why campaign finance is STILL the number one problem we have - if we truly want a representative democracy, that is. I understand there is legislation being introduced that would have federal elections follow the Arizona Clean Election model - the best in the nation, as I see it.
When will we, the people get it? Whoever buys Congress, owns Congress! Right now, it's the plutocrats. Publicly financed elections are in the public's interest.
susanai
To 'Hawnzz'. Yes I agree, this conversation is very one-sided. I am beginning to think that the previous 8 years including Bush never existed. Who was the last president back then??? and which party has been in power for most of these previos 12 years??? By reading this article it must have been the Democratic party.
Gary2012
I think it's fair to say that Bush contributed to the mess by pushing home ownership as part of his "compassionate conservative" agenda. But the real pros and originators of this game appear to be mostly in the other party, and somehow I think this kind of thing needs a little more gestation time than 6 or 7 years. From the Village Voice, no right-wing source to be sure:
"There are as many starting points for the mortgage meltdown as there are fears about how far it has yet to go, but one decisive point of departure is the final years of the Clinton administration, when a kid from Queens without any real banking or real-estate experience was the only man in Washington with the power to regulate the giants of home finance, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac.
Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that-in combination with many other factors-helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why."
http://tinyurl.com/5krq3l
There's plenty of blame to go around for this current financial turbulence, but most agree that one of the root causes was sub-prime mortgages. And I think we all know which party tends to do the most to help poorer people get things. Sounds admirable, but seemingly ignorant of one of the most basic and sometimes painful truths of life: There is no free lunch.
YARROW
I AM AFRAID, OBAMA CHOSE TOO MANY WALL STRRET , ENABLERS, FOR HIS CABINET, EMANUEL< SUMMERS< GEITHNER, WE NEEDED NEW FACES
Truthseeker
The POTUS is a corrupt agent of Wall Street, a grand marketer to the American people, his mission to confuse the electorate and forestalling the coming revolution. Even money the United States collapses like the Soviet Union, within 2 years.
steff47
Look around honey their's not many here who didn't take the money when they could. back in the day it was all for the money. thank god the day is gone and like my father use to say their no reformer like a new reformer who use to take the money and run he knows all the tricks
amapola101
Sickening feeling,for those that had a glimmer of hope.We have been ripped apart and add Chaney and Bush for not taking care of the welfare of their people.As I said in another site, the sky might not fall, but it is surely cracked. and so many people devastated and raped. And for Buyer Beware,if all the brilliant people in charge of huge companies, are allowed to fail and be bailed out so should the individual persons.1,000,000 dollars for all american citizens, and get all the mortgages of their hands...,no its going to Hamas, and now millions, to Afghanistan, and everyone is devastated here.
purpleme
It would have been nice to know some of these cozy "relationships" BEFORE THE ELECTION.
Thank you.
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