McCain’s Warnings on Fannie Mae and Freddie Mac, in 2005
Posted on September 17, 2008
Filed Under Banking, Barak Obama, Democratic Party, Fannie Mae, Freddie Mac, Government Sponsored Entities, International, Library of Congress, McCain, Obamabots, Obamafada, Obamaniacs, Obaminates, Obammunists, Real Estate, Republican Party, Senator Dodd, US Elections, US President, US Senate, US Senate Banking Committee, US economy, democrats, economics, economy, elections, financial markets, housing market, investors, morality, mortgage loans, political corruption, political hypocrisy, politicians, politics, presidential candidates, republicans | 8 Comments
The Library of Congress (THOMAS) has the following record for May 25, 2006:
FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005 — (Senate – May 25, 2006)
[Page: S5217] GPO's PDF ---Mr. McCAIN. 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.
In January 26, 2005, Senator McCain cosponsored legislation that had it been passed might have averted the current debacle of mortgage loans. It might have saved the taxpayer billions and the fall of venerable financial institutions would not have happened.
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. This warning was given just over two years ago. What happened to the legislation? It lingered in the Senate’s Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably – on July 28th, 2005. Then… it died!
Senators Elizabeth Dole, John McCain and John Sununu had cosponsored it with Charles Hagel as the Sponsor, all Republicans!
Lest anyone think that the Republicans are solely responsible for killing this resolution let us remember that the committee was not made up by far of only Republicans. One of the most prominent members of the Committee (and its current Chairman) was Senator Dodd (Democrat, from Connecticut). As we learned over the last couple of weeks, Senators Dodd and Obama turned out to be the biggest recipients of Fannie’s and Freddie’s gifts. It is obvious to anyone not ruled by emotions, it is obvious to anyone using logic and intellect, anyone capable of reading, understanding and sifting through all the boring details, that the economic policies revealed so far by the good Senator from Illinois are a harbinger of unmitigated disaster, if implemented.
Senator McCain with four of his colleagues, foresaw the financial crisis which, over the last two weeks, has sent shockwaves throughout the financial markets around the world. Senator Obama, though he only served the Senate for a mere total of 143 days and voted “present” 139 times, greatly benefited from that which Senator McCain has warned us against. It is obvious that Senator Obama’s run for the Presidency, instead of far more experienced non-corrupt Democrats, is nothing less than an insult, an affront to the intelligence of the average American voter. In fact, the underhanded tactics, the disregard for any decorum, the venom, the hatred displayed by the good Senator’s campaign and especially by his devoted followers amounts to an OBAMAFADA on our country as a whole.
Chaim
Comments
8 Responses to “McCain’s Warnings on Fannie Mae and Freddie Mac, in 2005”
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Nice find, Chaim!! Good post too!!
Jan 2005. Weren’t the Republicans in control of both houses of Congress and the Presidency? Interesting how you state “just over two years ago”, when in fact it was over THREE years ago. Are we trying to somehow tie that is the Democrats fault? The only true Republican who saw this coming was Ron Paul, honestly I’m more afraid of Paul’s policy ideals, but he was right anyway. (Give credit where credit is TRULY due.)
Jason,
How about partially tracing the state of the economy to the FRE/FNM lobbying to Barney Frank, and Barack Obama? Who didnt believe these institutions needed reform like Sen McCain did back in 2003… yet was stuffed by Schumer and Frank… High level Democrats have their hands all over this.
#2 yes the republicans are also at fault her but that is not the point, the point is Mccain had the forsight and that is what we need
Hi there,
It seems the link you posted is broken. I’d appreciate a working link directly to the document.
Kind regards,
VirtualFlavius
I think your analysis is absolutely correct.
I think your statements are misleading. How did Obama receiving contributions benefit Fannie Mae? Is there a piece of regulation legislation that he blocked? In the time you pointed out that McCain introduced this legislation regarding Fannie Mae, Obama wasn’t even a US Senator. And when you also call out his voting “present”, that was also when he served on the State Senate. If you compare absentee voting records, I believe McCain has a higher percentage.
Good analysis. And Jason, to get anything through the Senate you need a filibuster-proof super-majority of 60, not 51. The Republicans certainly did not have that many.
Janine,
Are you that naive as to believe that Fannie and Freddie were just doling out gifts out of the sheer goodness of their hearts, without any ulterior motives?!?!?
Senator Dodd in the US Senate and Barney Franks in the House were very instrumental in both blocking any legislation that might have brought Fannie and Freddie under closer Congressional scrutiny and in passing measures favorable to the management of both institutions. However, one US Senator and one US Representative are not enough! Hence, the lobbying arms of both institutions had to give out gifts to Senators and Representatives of both parties (but overwhelmingly to Democrats). The fact that Senator Obama in his total of 143 days in the Senate managed to get as much as he did, only tells you how easily he can be bought!
As for attendance:
Barack Obama has missed 290 votes (45.5%) during the current Congress. See a list of his missed votes since 1991 or see a full list of vote missers. Of the 348 votes he did attend he voted “present” 139 times. His actual votes (pro or con) amount to a total of 209.
John McCain has missed 407 votes (63.8%) during the current Congress. See a list of his missed votes since 1991 or see a full list of vote missers.
In conclusion, Obama was physically present 18.3% more than McCain. His vote, however, counted only 209 times whereas McCain’s vote counted 231 times!
Not a great record for a brand new Senator trying to gain experience!