Emanuel tied to Freddie Mac collapse - The Firearms Forum

Don Buckbee · 11-09-2008, 05:10 AM

Emanuel tied to Freddie Mac collapse;
Update: The numbers for Emanuel
by Ed Morrissey

During the campaign, Barack Obama had to fight off assertions that Freddie Mac and Fannie Mae had him in their pocket while the two GSEs committed fraud and declined to their collapse. Obama didn’t help that perception when he chose Jim Johnson, Fannie Mae’s former CEO and chair, as the leader of his VP search committee, a position Johnson resigned shortly afterwards.

Now ABC reports that Obama’s new chief of staff, Rahm Emanuel, sat on the board of Freddie Mac during the critical period:
President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.”

Emanuel’s action, or lack of it, came during a time when the SEC says Freddie Mac misrepresented its income to investors in order to maintain its price. In other words, they committed fraud. The SEC specifically notes that Freddie did this in 2000, 2001, and 2002, and Emanuel sat on the board in 2000-2001.

This is no small matter. Had this happened when Sarbanes-Oxley was in effect, Emanuel would have had to sign off on those numbers under penalty of perjury. He could be liable for criminal prosecution. As it is, his actions and omissions as a board member may still result in civil and criminal liability, if the SEC discovers that he had a hand in the fraud committed at Freddie Mac, or if Emanuel knew about it and failed to act to stop it.

For an incoming administration that ran on cleaning up the greed on Wall Street, the selection of Emanuel speaks a lot louder than any campaign promises. One might think that anyone who sat on the boards of Fannie Mae and Freddie Mac while the two GSEs cooked the books and set the stage for global financial collapse should at least be considered political poison for any appointment, let alone one as significant as White House Chief of Staff — if nothing else, then at least on the basis of competence. Instead, it looks like Obama is bringing the Chicago Way to Pennsylvania Avenue.

Hope and change, indeed.

“Clinton’s going-away gift to Emanuel was a seat on the quasi-governmental Freddie Mac board, which paid him $231,655 in director’s fees in 2001 and $31,060 in 2000,” Lynn Sweet wrote for the Chicago Sun-Times on Jan. 3, 2002.

During the time Emanuel spent on the board, Freddie Mac was plagued with scandal involving campaign contributions and accounting irregularities. Freddie Mac and its sister organization Fannie Mae were taken over by the federal government in September 2008 after years of mismanagement and scandal.

Treasury Secretary Henry Paulson put the two beleaguered GSEs into a conservatorship, stripping common stock shareholders of their rights to govern the companies.

“Freddie Mac was accused of illegally using corporate resources between 2000 and 2003 for 85 fundraisers that collected about $1.7 million for federal candidates,” an Associated Press story from April 18, 2006 said. “Much of the fundraising benefited members of the House Financial Services Committee, a panel whose decisions can affect Freddie Mac.”

And, since his successful run for the House of Representatives in 2002, Emanuel has been the beneficiary of campaign cash from Freddie Mac and its sister organization Fannie Mae – $51,750 according to the Center for Responsive Politics Web site OpenSecrets.org.

That’s certainly something to keep in mind while recalling the promises by Barack Obama to change the way business gets conducted in Washington.

dcd_enterprises · 11-09-2008, 08:36 AM

Don, do you have a link for this article?

Don Buckbee · 11-09-2008, 08:47 AM

It came from Hot air.com.

Don

ponycar17 · 11-09-2008, 08:55 AM

The link to the story...

http://hotair.com/archives/2008/11/0...-mac-collapse/

The body and link to the ABC News finding...

Quote:

Emanuel Was Director Of Freddie Mac During Scandal
New Obama Chief of Staff, Others on Board, Missed "Red Flags" of Alleged Fraud Scheme
By BRIAN ROSS and RHONDA SCHWARTZ
November 7, 2008

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having "failed in its duty to follow up on matters brought to its attention."
Related
CEO Salaries Weather Mortgage Crisis
WATCH: Emanuel Accepts Chief of Staff Job
More from Brian Ross and the Investigative Team

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for "13 months-a relatively short period of time."

The spokesperson said that while on the board, Emanuel "believed that Freddie Mac needed to address concerns raised by Congressional critics."

Freddie Mac agreed to pay a $50 million penalty in 2007 to settle the SEC complaint and four top executives of the Federal Home Loan Mortgage Corporation were charged with negligent conduct and, like the company, agreed to settle the case without admitting or denying the allegations.

The actions by Freddie Mac are cited by some economists as the beginning of the country's economic meltdown.

The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds.

Freddie Mac records have been subpoenaed by the Justice Department as part of its investigation of the suspect accounting procedures.

Emanuel was named to the Freddie Mac board by President Bill Clinton in 2000 and resigned his position when he ran for Congress in May, 2001.

Freddie Mac Misrepresented Income, Says SEC

During the years 2000, 2001 and 2002, according to the SEC, Freddie Mac substantially misrepresented its income to "present investors with the image of a company that would continue to generate predictable and growing earnings."

The role of the 18-member board of directors, including Emanuel, was not addressed in the SEC's public action but was heavily criticized by the oversight group (OFHEO) in 2003.

The oversight report said the board had been apprised of the suspect accounting tactics but "failed to make reasonable inquiries of management."

The report also said board members appointed by the President, such as Emanuel, serve terms that are far too short "for them to play a meaningful role on the Board."

As a Congressman, Emanuel recused himself from any votes dealing with Freddie Mac until just this year.

In dealing with the nation's economic crisis, the new White House chief of staff will almost certainly be involved in discussions about the house and mortgage markets.

Emanuel's spokesperson said, "As White House chief of staff he will work with President-elect Obama and his economic advisers to help ensure we protect taxpayers and homeowners."

http://www.abcnews.go.com/Blotter/st...6201900&page=1

noslolo · 11-10-2008, 02:25 AM

Does this surprise anyone?

358 winchester · 11-10-2008, 02:53 AM

Quote:

Originally Posted by noslolo

Does this surprise anyone?

Nope

11-09-2008, 05:10 AM	#1
Don Buckbee Senior Member Join Date: May 2004 Location: Grayling, MI Posts: 712	Emanuel tied to Freddie Mac collapse Emanuel tied to Freddie Mac collapse; Update: The numbers for Emanuel by Ed Morrissey During the campaign, Barack Obama had to fight off assertions that Freddie Mac and Fannie Mae had him in their pocket while the two GSEs committed fraud and declined to their collapse. Obama didn’t help that perception when he chose Jim Johnson, Fannie Mae’s former CEO and chair, as the leader of his VP search committee, a position Johnson resigned shortly afterwards. Now ABC reports that Obama’s new chief of staff, Rahm Emanuel, sat on the board of Freddie Mac during the critical period: President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com. According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002. Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.” Emanuel’s action, or lack of it, came during a time when the SEC says Freddie Mac misrepresented its income to investors in order to maintain its price. In other words, they committed fraud. The SEC specifically notes that Freddie did this in 2000, 2001, and 2002, and Emanuel sat on the board in 2000-2001. This is no small matter. Had this happened when Sarbanes-Oxley was in effect, Emanuel would have had to sign off on those numbers under penalty of perjury. He could be liable for criminal prosecution. As it is, his actions and omissions as a board member may still result in civil and criminal liability, if the SEC discovers that he had a hand in the fraud committed at Freddie Mac, or if Emanuel knew about it and failed to act to stop it. For an incoming administration that ran on cleaning up the greed on Wall Street, the selection of Emanuel speaks a lot louder than any campaign promises. One might think that anyone who sat on the boards of Fannie Mae and Freddie Mac while the two GSEs cooked the books and set the stage for global financial collapse should at least be considered political poison for any appointment, let alone one as significant as White House Chief of Staff — if nothing else, then at least on the basis of competence. Instead, it looks like Obama is bringing the Chicago Way to Pennsylvania Avenue. Hope and change, indeed. “Clinton’s going-away gift to Emanuel was a seat on the quasi-governmental Freddie Mac board, which paid him $231,655 in director’s fees in 2001 and $31,060 in 2000,” Lynn Sweet wrote for the Chicago Sun-Times on Jan. 3, 2002. During the time Emanuel spent on the board, Freddie Mac was plagued with scandal involving campaign contributions and accounting irregularities. Freddie Mac and its sister organization Fannie Mae were taken over by the federal government in September 2008 after years of mismanagement and scandal. Treasury Secretary Henry Paulson put the two beleaguered GSEs into a conservatorship, stripping common stock shareholders of their rights to govern the companies. “Freddie Mac was accused of illegally using corporate resources between 2000 and 2003 for 85 fundraisers that collected about $1.7 million for federal candidates,” an Associated Press story from April 18, 2006 said. “Much of the fundraising benefited members of the House Financial Services Committee, a panel whose decisions can affect Freddie Mac.” And, since his successful run for the House of Representatives in 2002, Emanuel has been the beneficiary of campaign cash from Freddie Mac and its sister organization Fannie Mae – $51,750 according to the Center for Responsive Politics Web site OpenSecrets.org. That’s certainly something to keep in mind while recalling the promises by Barack Obama to change the way business gets conducted in Washington. __________________ Don JPFO NRA Benefactor Member NSSA Life Member -->

11-09-2008, 08:36 AM	#2
dcd_enterprises Advanced Senior Member Join Date: Oct 2007 Location: Wheatland, Iowa Posts: 1,313	Re: Emanuel tied to Freddie Mac collapse Don, do you have a link for this article? __________________ A veteran - whether active duty, retired, National Guard or Reserve - is someone who, at one point in his or her life, wrote a blank check made payable to "The United States of America" for an amount of "up to and including my life." That is honor, and there are way too many people in this country who no longer understand that - Author unknown

11-09-2008, 08:47 AM	#3
Don Buckbee Senior Member Join Date: May 2004 Location: Grayling, MI Posts: 712	Re: Emanuel tied to Freddie Mac collapse It came from Hot air.com. Don __________________ Don JPFO NRA Benefactor Member NSSA Life Member

11-10-2008, 02:25 AM	#5
noslolo Advanced Senior Member Join Date: Oct 2004 Location: Johnstown PA Posts: 1,558	Re: Emanuel tied to Freddie Mac collapse Does this surprise anyone? __________________ I'm a heck of a "obesito illegitimo"