With the credit crunch and the blame game in full swing, and as a follow up to Nancy A’s new blog post here at Texas Hill Country, I decided to take a good look at the records of both McCain and Obama on the subject…
First, let’s take a look at who recognized the early warning signs, spoke out and called to action… hint: it wasn’t Obama.
In 2005, McCain entered in legislation and made the following statement:
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
Hmmm… Interesting. Looks like a prediction? Yup, yup… yeah it was.
And, by the way, guess who blocked the bill, one that would have surely stemmed the tide of the growing problem… yup, Democrats (the vote was in 2006).
And now lets take a look at lobbyist money, something that Obama is real big on, and for a guy that sure does make a lot of noise about this stuff, he sure has benefited.
Here are the numbers for contributions from different banks and financial firms currently involved in the meltdown on Wall Street…
From Open Secrets
Obama – $126,349
McCain – $21,450
Obama – $370,524
McCain – $117,500
Obama – $75,899
McCain – $36,875
Obama – $691,930
McCain – $208,395
Obama – $318,070
McCain – $233,272
Obama – $404,750
McCain – $140,165
JP Morgan Chase:
Obama – $442,919
McCain – $179,975
Obama – $448,599
McCain – $269,251
Yeah, I found that interesting too…. Obama is getting 2 to 5 times more money from the hedge funds and mortgage giants. I wonder why?
Couldn’t be that McCain was calling for reform and Obama wasn’t making a peep, could it?
Oh, and guess who has an ex CEO of Fannie Mae, and board member for Lehman Bros, Goldman Sachs and KB Homes as an advisor… and this adviser was the one that oversaw the VP pick…
Jim Johnson, ex-head cheese at Fannie (Click Here) helping to pick Obama’s VP… Yeah, that one kinda set me back a bit too.
Jim Johnson has been tapped by Obama to help choose a running mate….
Johnson served as Fannie Mae CEO from 1991 to 1998 and has a long history in both Washington politics and business. He served on the boards of numerous companies, including The Goldman Sachs Group, KB Home, and Target Corporation, and has been Vice Chairman of Perseus LLC. He also was a corporate finance managing director for Lehman Brothers. He was an executive assistant for Vice President Walter Mondale (1977-1981) and a U.S. Senate staff member. Johnson also helped screen running mates for Democratic presidential nominees Walter Mondale in 1984 and John Kerry in 2004.
Oh, my favorite part is that he also advised Mondale and Kerry…
LOLz… and that is all I have to say about that.
Speaking of advisers… let’s not forget about Franklin Rains who now serves as Obama’s Economic Advisor who was the CEO of Fannie Mae after Jim Johnson.
And, of course, we definitely can not move on without talking about Penny Pritzker, the architect of the Sub-Prime crisis and head of the failed Superior Bank of Chicago. She is now Obama’s finance chair…. nice, huh?
Both of these men made TENS OF MILLIONS and are “waist deep in the mortgage debacle.”
Soooooooo, yeah, that’s more than “change”… It’s big bucks!
Obama’s gonna reform Washington?
He is gonna help fix the economy?
The guy surrounded by advisers that he chose to help him manage the economy but are some of the worst players in the crisis we now face is gonna do an about face and save us?
My Aunt Fannie!
Filed under: Barack Obama, John McCain, Mortgage Bailout | Tagged: change, citigroun, financial, jp morgan, lehman, Lobbyist, McCain, meltdown, morgan stanley, Obama, wall street | 12 Comments »