October 06, 2008

Barney Frank Loves Fannie

Last week, I wrote at length on the “strange bedfellows” of the housing crisis, Barney Frank and Treasury Secretary “Hank” Paulson, the pinko and the Wall Street banker, those seeming ideological opponents who got along just swimmingly in foisting upon the tax payer a 700 billion bailout bill (and generally aggrandized their political positions in the process.) 

Maybe instead of making all these extended metaphors about “strange bedfellows,” I should have researched Frank’s actual strange bedfellows—that is, the people he’s screwing—and how this affects policy. There’s a lot of material out there. 

There’s this from the Business and Media Institute

The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his ?spouse.? Another Washington Post report said Frank called Moses his ?lover? and that the two were ?still friends? after the breakup.

Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) ? all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk. Frank?s office has been unresponsive to efforts by the Business & Media Institute to comment on these potential conflicts of interest.

While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.

He has served on the committee since becoming a congressman in 1981 and became the ranking Democrat on the committee in 2003. He became chairman of the committee, now called the House Financial Services Committee, in 2007.

Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).

The image of Barney Frank in same-sex coitus is probably enough to scare Justin straight, and I understand if you, dear reader, want to stop reading here. But here’s the important part: 

Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac?s problems were ?exaggerated,? a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.

‘These two entities ? Fannie Mae and Freddie Mac ? are not facing any kind of financial crisis,’ Frank said to the Times. ?The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.?

Frank has also reaped campaign contribution benefits from Fannie Mae and its counterpart Freddie Mac. According a front page story in the Sept. 19, 2008, Investor?s Business Daily by Terry Jones, Frank has received $40,100 in campaign cash over the past two decades from the GSEs [government-sponsored enterprises]


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