''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''  - Representative Barney Frank of Massachusetts as quoted in the New York Times September 11, 2003, at the time the ranking Democrat on the Financial Services Committee.

Congressman Frank was responding to President Bush who earlier on that day recommended the largest regulatory overhaul in the housing finance history only to have the Democrats spearheaded by Rep. Frank, stop the revamping of the failing mega giant quasi-government lender.

As for the jr. senator (senior citizen) from Massachusetts a question remains. Did Senator John Kerry abet AIG in fleecing the taxpayers of nearly $200M? We know the motivation was well documented by the favors they had been doing for him on more than a regular basis. According to  a report in 2004, Kerry was allowing his pockets to be stuffed hand over fist:


A Senate colleague (AZ (R) John McCain) was trying to close a loophole that allowed a major insurer to divert millions of federal dollars from the nation's most expensive construction project. John Kerry stepped in and blocked the legislation.

During the next two years, the insurer, American International Group, paid Kerry's way on a trip to Vermont and donated at least $30,000 to a tax-exempt group Kerry used to set up his presidential campaign. Company executives donated $18,000 to his Senate and presidential campaigns.

Were the two connected? Kerry says they were not.
But to some government watchdogs, the tale of the Massachusetts senator's 2000 intervention, detailed in documents obtained by the Associated Press, is a textbook case of the special-interest politicking that Kerry rails against on the presidential trail.

"The idea that Kerry has not helped or benefited from a specific special interest, which he has said, is utterly absurd," said Charles Lewis, head of the Center for Public Integrity that just published a book on political donations to the presidential candidates.

"Anyone who gets millions of dollars over time, and thousands of dollars from specific donors, knows there's a symbiotic relationship. He needs the donors' money. The donors need favors. Welcome to Washington. That is how it works."

 

In September 2001, Kerry disclosed to the Senate ethics office that AIG had paid an estimated $540 in travel expenses to cover his costs for a speech in Burlington, Vt.

A few months later in December, several AIG executives gave maximum $1,000 donations to Kerry's Senate campaign on the same day. The donations totaled $9,700 and were followed by several thousand dollars more during the next two years.

The next spring, AIG donated $10,000 to a new tax-exempt group Kerry formed, the Citizen Soldier Fund, to lay groundwork for his presidential campaign. Later in 2002, AIG gave two more donations of $10,000 each to the same group, making it one of the largest corporate donors to Kerry's group.

The insurer wasn't the only company connected to the Big Dig to donate to Kerry's new group. Two construction companies on the project -- Modern Continental Group and Jay Cashman Construction -- each donated $25,000, IRS records show.


As for the Democrats nominee for president in 2008, Only Connecticut Senator (D)Chris Dodd got more and  and Massachusetts Senator (D)John Kerry received just a bit less money from Freddie Mac and Fannie Mae lobbyists compared to Barack Obama the Illinois Senator who has climbed the recipient chart at a meteoric pace. The figures in the link cited refer to funding since 1989. Barack Obama has climbed to #2 on their favorites list in just under 3 years! Let's not forget who Senator Obama's top advisors are in his bid for the White House; former Fannie Mae CEO Franklin Raines and former managing director for Lehman Bros. and Fannie Mae vice-chair Jim Johnson. 

Johnson was implicated in the sub-prime mortgage crisis taking loans directly from Countrywide Financial's Angelo Mazilo .
Johnson was chair of Obama's VP search committee but stepped down to avoid controversy.

While there is indeed plenty of blame to go around, including within the Republican Party, there can be no denial that Senators Kerry and Obama as well as Congressmen Frank should hold themselves as accountable as those their fingers are pointing to. They will soon realize that there are thousands of fingers pointing directly toward them for failing to act when the opportunities presented themselves, in the very least for not showing proper integrity preventing any debts owed in terms of favors. Poor Judgement? I'd say from here in New Bedford, Massachusetts; absolutely.

Meanwhile, the real reformer Senator (R)John McCain tried to stave off the financial crisis in 2005 when he introduced TheFederal Housing Enterprise Regulatory Reform Act of 2005 which attempted to do the following:

 - Amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish: (1) in lieu of the Office of Federal Housing Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which would have had authority over the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac); and (2) the Federal Housing Enterprise Board. It would have set forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting: (1) assessment authority; (2) authority to limit nonmission-related assets; (3) minimum and critical capital levels; (4) risk-based capital test; (5) capital classifications and undercapitalized enterprises; (6) enforcement actions and penalties; (7) golden parachutes; and (8) reporting. It would have amended the Federal Home Loan Bank Act and established the Federal Home Loan Bank Finance Corporation. It would have transferred the functions of the Office of Finance of the Federal Home Loan Banks to such Corporation and would have excluded the Federal Home Loan Banks from certain securities reporting requirements. Also this bill would have abolished the Federal Housing Finance Board. 

The bill was fended off also by the Democrats along with some scattered GOP votes.
 


Top Recipients of Fannie Mae and Freddie Mac
Campaign Contributions, 1989-2008

 

Name
 Office
 Party/State
 Total
 
1. Dodd, Christopher J
 S
 D-CT
 $133,900
 
2. Kerry, John
 S
 D-MA
 $111,000
 
3. Obama, Barack
 S
 D-IL
 $105,849
 
4. Clinton, Hillary
 S
 D-NY
 $75,550
 

 
16. Frank, Barney
 H
 D-MA
 $40,100