Obama Chief of Staff Tied to Key Player in Financial Meltdown
After President Clinton named Rahm Emanuel to the board of Freddie Mac in 2000, the current White House Chief of Staff sat on a board of directors deemed “so pliant” by Armando Falcon Jr,. , head of a federal oversight agency for the government-sponsored mortgage giant,
that Freddie Mac’s managers easily were able to massage company ledgers. They manipulated bookkeeping to smooth out volatility, perpetuating Freddie Mac’s industry reputation as “Steady Freddie,” a reliable producer of earnings growth. Wall Street liked what it saw, Freddie Mac’s stock value soared and top executives collected their bonuses.
“The scandal forced Freddie Mac to restate $5 billion in earnings and pay $585 million in fines and legal settlements. It also foreshadowed even harder times at the firm.“Â Not just that, “Freddie Mac reported recently that it lost $50 billion in 2008. It so far has tapped $14 billion of the government’s guarantee and said it soon will need an additional $30 billion to keep operating.”
As Freddie Mac crumbled, putting taxpayers on the hook for $44 billion, not to mention the losses suffered by stockholders, Emanuel pocketed a hefty sum, making “at least $320,000 from his time at Freddie Mac. Two years after leaving the firm, Emanuel reported an additional sale of Freddie Mac stock worth between $100,001 and $250,000.”
In short, Emanuel “benefited from the kind of cozy ties between Washington and Wall Street that have fueled the nation’s current economic mess.â€
It would be nice to know if the aide to the president now trying to find a means to fix the mess created in large part by mismanagement at the Government-Sponsored Enterprises, including Freddie, had done anything to alert the board to the accounting gimmickry of the management, or if he helped further its demise by endorsing their schemes, but
The Obama administration rejected a Tribune [the paper breaking the story] request under the Freedom of Information Act to review Freddie Mac board minutes and correspondence during Emanuel’s time as a director.
So much for the Administration’s much vaunted promise of transparency.
As Jonathan Adler puts it, “he was paid a handsome sum and turned a blind eye to accounting and political shenanigans.”
I wonder if he’ll give any of that money back, given what its failure has cost the economy, you know, kind of like some people are suggesting AIG Execs do with their bonuses.
Even after he stepped down from Freddie’s board, Rahm kept taking. As a Congressman, he was the thirteenth largest “recipient of Fannie Mae and Freddie Mac Campaign Contributions from 1989 to 2008,” ahead even of Barney Frank, then a ranking Democrat on the House Banking Committee (later chairman of the House Financial Services Committee).
Kudos to the Chicago Tribune for breaking this story. I wonder if other organs of the MSM will pick up on this and demand access to those Board minutes, as they surely would if there were an (R) after Rahm’s name (or that of his boss).
Not only is the president’s Chief of Staff a hard-charging partisan, but he’s been on the take from a corrupt government institution. That combination has put Republicans in hot water for lesser offenses. And so should it for Rahm Emanuel.
18 Comments
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
I still can’t believe that anyone with a speck of gray matter seriously thought “Barack” would keep even 1/4 of his promises, would be a fiscal moderate, would govern transparently as promised, would be responsible, competent, etc.
But it is the sad duty of the opposition to keep tallying and re-tallying his failures and broken promises… to not let them become “the new normal”, accepted numbly and/or blindly by the American people.
Comment by ILoveCapitalism — March 26, 2009 @ 9:32 pm - March 26, 2009
Off Topic–but related–I don’t understand why no ire has been directed at the overseers of AIG–its board of directors. They get paid serious dough to offer some business judgment, but they seem to have been AWOL.
And more to the point of this post, why isn’t anyone grilling Obama about the reality that his envoy Richard Holbrooke was an AIG director from 2001 through July 2008.
Each of these directors should be facing shareholder derivative suits–brought by the DOJ. And yet Obama has this clown jetting around the Mideast.
WTF?
Comment by SAM — March 26, 2009 @ 9:54 pm - March 26, 2009
So most of the AIG guys have given back their bonuses. Left wingnutt congressmen and women have berated them. Leftwingnutts have harassed the AIG families at their homes. Could we ask, could the media ask if Obamateleprompters Chief of Staff would give back the tainted salaries and bonuses form his dark days with Freddie Mac??Think how many hungry people, how many homeless, the children, that could be helped with that tainted money.
Comment by Gene in Pennsylvania — March 26, 2009 @ 10:22 pm - March 26, 2009
Gene. Do not dignify the left by calling them wingnuts. Wingnuts keep the Earth on its axis. Just look at a globe.
“Moonbat” or “hippie” will do nicely for the left.
Comment by V the K — March 26, 2009 @ 10:27 pm - March 26, 2009
Rahm in an orange jumpsuit: nothing less will satisfy me. His boss too.
Comment by bear1909 — March 26, 2009 @ 11:07 pm - March 26, 2009
Obama strikes again…out. The man can speak out of both sides of his mouth. Transparency, openness, honesty, trustworthiness. Unfortunately, everything he boasts about, his personal choice of friends and staffers ignore. The man’s mouth is moving and the lies keep coming out. He is The Man now and has out “whited” the white man that preceded him.
Comment by Duffy - Native Intelligence — March 26, 2009 @ 11:08 pm - March 26, 2009
I hate to be the “smartest” guy in the room, because I went to The University of Wisconsin at Whitewater, and my credentials pale in comparison to the MASSIVE FU@#-UPS who run the Media.
But. Bill Clinton placed the obvious political HACK, Rahm Emanuel on Freddie Mac’s board. Or as the esteemed GAY Congressperson, Bawney Fwank is known to say…FWEDDDIE MAC, is handsome!!!!!
Here’s the MONEY SHOT. What did Emanuel actually DO or SAY to earn his graft?????
What did Emanuel provide to Fweddie, and what information was Emanuel privvy too, yet looked the other way?????
It’s quite simple COLUMBIA grads!!!
Why was Emanuel compensated for PRESIDING OVER MASSIVE FAILURE?
AND.
What did Emanuel know and SAY on the record???
Next up…..Emanuel and the FITZGERALD TRANCRIPTS vis a vis BLAGOJEVICH and BURRIS.
The guy is complete and utter SLEAZE.
In what UNIVERSE did Emanuel EARN $320,000 PLUS, yet we CANNOT examine how he specifically EARNED it???
Comment by libocrat — March 26, 2009 @ 11:25 pm - March 26, 2009
Ummm, guys… he wasn’t the only corrupt politico at the Fannie/Freddie feeding trough.
Newt baby was in that line for about $300k and he was specifically hired to defend Freddie from potential regulation.
D’Amato had his shirtsleeves rolled up for $240k.
Our old soc-con buddy and prez-hopeful Vinnie Weber was in it for $370k.
Susan Molinari nearly clipped Rahm’s take at $301k.
TommieDelay, the king of the soc-cons, helped his COS get a $241k handout.
Now that was just in ’06.
I agree that RE has some ‘xplainin to do, Luucy ’cause he was a director… and those Boards were famously large groups of 30-40-50 folks. Heck, at Fannie they had to build a new Board table to accomodate them all in 2005… yeah, it was all first growth chesnut at about $400/sq ft raw materials and then finished and installed it came in at $711k… no chairs in the price, tho.
Comment by Michigan-Matt — March 27, 2009 @ 12:46 am - March 27, 2009
MM, but were these guys on the Board at the time? And are any of them Chief of Staff to the president now responsible for cleaning up the mess.
But, DeLay having his hand in the till doesn’t surprise me. Principle never mattered to that Texan.
Comment by GayPatriotWest — March 27, 2009 @ 12:54 am - March 27, 2009
Things start to make sense why Chris Dodd fell on his sword:
“Right now, you get the feeling this is all about protecting [White House Chief of Staff] Rahm Emanuel,†says a former Treasury Department lawyer, who worked in that department’s counsel’s office on the Troubled Asset Relief Program (TARP) before joining a D.C.-based law firm in February. “At the time, we were led to believe there were basically three or four people from the Administration at the table when the final deals were cut and one of them was Emanuel.”
http://spectator.org/archives/2009/03/23/plenty-of-rahm-at-the-aig-tabl
Comment by PGI_FL — March 27, 2009 @ 1:26 am - March 27, 2009
I hope you all will accept a lesbian/gay woman on the board. I just found this place and feel like I’ve found home.
I’ve been reading the comments and these are the most astute evaluations I have found anywhere on the state of the union under Obama.
Thank you to the people who started this blog. I’ll be reading often.
Comment by Libby — March 27, 2009 @ 1:32 am - March 27, 2009
Welcome, Libby!
Comment by North Dallas Thirty — March 27, 2009 @ 2:34 am - March 27, 2009
Welcome aboard Libby,
IF this site can put up with me, you’re more than welcome
Comment by The_Livewire — March 27, 2009 @ 7:13 am - March 27, 2009
#11 – Greetings, Libby! Enjoy your stay with us.
(Hey guys, maybe we can introduce her to Julie The Jarhead?)
Regards,
Peter H.
Comment by Peter Hughes — March 27, 2009 @ 10:25 am - March 27, 2009
Hi there Libby and welcome also!
Dan, nope they weren’t on the Board. Those contracts were consulting fees and in Newt’s case it was to specifically blunt the WH’s call for regulation of Freddie… his white paper was an endorsement of Freddie’s use of derivatives to leverage private sector investment.
It sounds so innocent now… but those derivitaves and the leveraging are central to the problems we have today. Both groups, as you know, were bipartisan in their willingness to spread the graft and peddle some influence in Congress.
RE has a lot to explain. I hope some OReilly producer can catch him getting into his car in the WH Exec parking lot E and hammer the weasel. I hear he still drives to work.
Comment by Michigan-Matt — March 27, 2009 @ 1:28 pm - March 27, 2009
Welcome Libby.. if this site can put up with ME, it can put up with anyone!
Comment by Bruce (GayPatriot) — March 27, 2009 @ 3:33 pm - March 27, 2009
MMatt the problem with blaming Delay, Newt, D’Amato, etc is that most all of them are gone from the scene. If Newt runs for higher office, I say hammer him on this. I’m also for term limits on Republicans as well as Dems. But the current CoS is hip deep in this dung and the American public needs to be informed about it. Frank/ Dodd as well need to be painted with this scandal and crisis every time they raise their heads up in public.
Comment by Gene in Pennsylvania — March 27, 2009 @ 5:36 pm - March 27, 2009
Amen.
Comment by Vanessa — March 29, 2009 @ 11:25 am - March 29, 2009