Gingrich defends his work for Freddie Mac

Newt Gingrich did not recall exactly whathe was paid.
Newt Gingrich did not recall exactly whathe was paid.

The former speaker is said to have earned at least $1.6 million for consulting contracts.

Posted: November 17, 2011

URBANDALE, Iowa - Rising in polls and receiving greater scrutiny, Republican presidential candidate Newt Gingrich found himself on the defensive Wednesday over huge payments he received over the last decade from the federally backed mortgage giant Freddie Mac.

Gingrich, the former House speaker, said he did not remember exactly how much he was paid. A person familiar with the hiring said it was at least $1.6 million for consulting contracts stretching from 1999 to early 2008. The person spoke on condition of anonymity in order to address a personnel matter.

Freddie Mac and its larger sister institution, Fannie Mae, long unpopular among Republicans, have become targets for criticism stemming from the housing crisis that helped drive the nation deep into recession and then hampered recovery. Gingrich himself criticized Barack Obama in 2008 for accepting contributions from executives of the two companies.

Gingrich, in Iowa on Wednesday, said he provided "strategic advice for a long period of time" after he resigned as speaker following his party's losses in the 1998 elections. He defended Freddie Mac's role in housing finance and said, "Every American should be interested in expanding housing opportunities."

On Tuesday, a House committee voted to strip top executives of Freddie Mac and Fannie Mae of huge salaries and bonuses and to put them on the same pay scale as federal employees.

After disastrous losses, both companies were taken over by the government in 2008, and since then a federal regulator has controlled their financial decisions.

During the 2008 campaign, Gingrich suggested in a Fox News interview that presidential candidate Obama should return contributions he had received from executives of the two companies.

Gingrich sought Wednesday to portray his history with Freddie Mac as a sign of valuable experience, saying: "It reminds people that I know a great deal about Washington. We just tried four years of amateur ignorance, and it didn't work very well."

At least one of his rivals assailed him over the matter.

"It doesn't matter if it's $300,000 or $2 million, the point is the money that was taken by Newt Gingrich was taken to influence Republicans in Congress to be in support of Fannie and Freddie," Minnesota Rep. Michele Bachmann said in an interview.

Fannie Mae and Freddie Mac buy home loans from banks and other lenders, package them into bonds with a guarantee against default, then sell them to investors around the world. The two own or guarantee about half of all U.S. mortgages and nearly all new mortgage loans.

Gingrich was hired in 1999 by Freddie Mac's top lobbyist, Mitchell Delk. He was brought in for strategic consulting, primarily on legislative and regulatory issues, the company said at the time. That job, which paid about $30,000 a month, lasted until sometime in 2002.

In 2006, he was hired again on a two-year contract that paid him $300,000 annually, again to provide strategic advice while the company fended off attacks from the right wing of the Republican Party.

Freddie Mac and Fannie Mae for years had been under scrutiny from Republicans on Capitol Hill who opposed government involvement in the mortgage business.

In the Nov. 9 Republican debate, Gingrich sought to explain his role at Freddie Mac as that of a "historian" sounding dire warnings about its future. Former executives dispute his description of his role.

Four people close to Freddie Mac say he was hired to strategize with it about identifying political friends on Capitol Hill who would help the company through a very difficult legislative environment. All four spoke on condition of anonymity to discuss the personnel matter freely.

SEIU Boosts Obama Efforts

The Service Employees International Union endorsed President Obama's reelection bid Wednesday, saying it would deploy its formidable political machine earlier and on a wider scale than in 2008.

SEIU president Mary Kay Henry said the union planned to reach out to all 2.1 million members by Labor Day and focus on getting more Hispanic and black voters to the polls.

"We're trying to do it on a scale that we've never done before," she said.

The politically powerful union is the latest labor organization to jump in with an early endorsement of the president, following the United Food and Commercial Workers Union and the National Education Association. It could signal even broader campaign spending by labor groups, which poured out about $400 million to help elect Obama in 2008.

One of Obama's earliest backers in 2008, the SEIU spent about $60 million to help him win election. That led it to become an influential voice in forming administration policy, particularly on Obama's health-care overhaul plan.

- Associated Press


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