COMMENTARY | Former Speaker of the House Newt Gingrich has surged in the national presidential preference polls of late and eve topped the latest Public Policy Polling poll, but he has hit a stumbling block with regard to his condemnations of Fannie Mae and Freddie Mac. Before he could take a complete tumble, however, his campaign has decided to go silent on the exact nature of the relationship and how much money the federal loan agency paid Gingrich while he worked for them during the Bush administration. According to CNN, Gingrich has issued his "last word" on the Freddie Mac issue.
That "last word" came as a six-point statement on the "Newt 2012" website that maintained that the former ranking politician in the House of Representatives had never lobbied for the federal loan agency. The "Fact Sheet" does not address compensation, now reportedly between $1.6 million and $1.8 million. Speaking in generalities, the statement also denies any advocacy by Gingrich or his consulting organization against attempts by the Bush administration to regulate the Fannie Mae and Freddie Mac agencies.
Gingrich has also continued to insist that his job with Freddie Mac had been one of an advisory or consulting capacity and what he could provide the agency in his role as an historian.
CNN reported that a Freddie Mac source confirmed that Gingrich was not a lobbyist and had been hired as a consultant. He worked two stints for the agency, the first of which involved dealing with the Bush administration and Republican congressman with regard to pro-minority housing initiatives. The second period saw Gingrich hired to write "white papers" designed to make attractive the Fannie Mae and Freddie Mac "model" of business, a model Republicans tended to dislike. The source told CNN that Freddie Mac officials became frustrated with Gingrich because of the paucity of material he supplied.
That Gingrich was in any way an "historian" associated with agency was denied.
The Gingrich campaign has been under fire since the CNBC Republican Presidential Debate on Nov. 9, when moderator John Harwood confronted the candidate with his remarks and past dealings with Freddie Mac, one of the two federal agencies Gingrich often denigrates for its contribution to the home mortgage crisis, blaming Democrats and their close ties to the agencies. Gingrich continues to insist that he did not defend Freddie Mac against the Bush administration.
There seems to be a war over words involved in this controversy. Gingrich and his campaign do not wish to be seen as lobbyists -- and rightly so, considering that lobbyists may even have worse social standing than lawyers (which many of them are). Still, Gingrich was hired to promote the benefits of Freddie Mac during the time when it was facing regulation by the Bush agency. Furthermore, his company was hired to produce "white papers" to enhance the model of the federal loan agency and its business model.
One party (the media) says it was lobbying. One party says it was consulting (Gingrich). And another party says it was consulting and promoting (Freddie Mac).
Some might say that promoting is a subtle form of lobbying, especially when that promotion is being directed at government officials...
And now that Newt Gingrich is running for president, he understandably wants to garner as many votes as possible, so he attacks the institutions that have been promoted by Democrats and are now held in general disfavor by the electorate due to their involvement in the home mortgage meltdown. However, Gingrich had a business relationship promoting the agencies he now wants to dissolve. Perhaps it would be interesting to note how many times Gingrich promoted dissolution of the federal agencies in his "white papers" for hire -- which could be why there has been a "last word" issued on the subject by the Gingrich campaign.
Because the bottom line is this: The agencies seemed to have benefits within their business model worth promoting when Gingrich and company were on the Freddie Mac payroll in 2006 -- just a year before the meltdown that nearly destroyed the American (and world) housing market and contributed enormously to the economic collapse that generated the Great Recession.
Regardless of what the Gingrich campaign says, it is doubtful that this will be the "last word" on the subject.
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