Freddie and Fannie throw party for GOP in Minneapolis

[annm4peace]

By Molly Priesmeyer Jul 18 2008 05:05PM | 1 Comment
How do you thank legislators who have agreed to pass laws supporting your industry and then, when the credit industry gets sucked into its own watery grave, toss you golden life jackets worth billions of dollars? In spite of (or because of?) the two mortgage giant's serious troubles, Freddie and Fannie are throwing a party, along with the Independent Community Bankers of America, the National Association of Home Builders, and the National Association of Realtors, on Sept. 2 at the posher-than-posh Graves 601 Hotel in Minneapolis, in honor of their biggest supporters during the housing heyday.

Freddie Mac and Fannie Mae might get government-sponsored life preservers tossed at them next week if Treasury Secretary Henry Paulson has his way. Some House Republicans say taxpayers shouldn't foot the bill, and they don't want the Democrat-sponsored housing package, which would help millions of homeowners stay in their homes, attached to the package. Yet Paulson says a taxpayer-funded plan to save Fannie and Freddie should be in place next week.

Fannie and Freddie hold more than 40 percent of the country's home loans, and a failure of these two behemoths would make the current housing crisis look like a little sneeze. In the past year, the companies have lost more than 80 percent of their stock value, and analysts worry they don't have enough liquidity to survive the biggest housing crisis since the Great Depression.

The backwashing -- and policies that made subprime lending and deregulated markets quick-cash cows for the mortgage industry -- go hand in hand. The finance/insurance/real-estate sector is the country's largest campaign contributor, donating $210,398,206 to congressional candidates this year alone. So far this year, Fannie Mae has doled out $1.8 million in lobbying expenses, while Freddie Mac has handed out $3.3 million. Since 1998, Freddie Mac and Fannie Mae have spent more than $170 million on lobbying. In fact, the combined lobbying punch of Fannie Mae, the Mortgage Bankers Association, and Freddie Mac make them the top three campaign contributors in the mortgage banking industry. The total spent on lobbying this year by mortgage bankers and brokers is $10,053,182.

Senator Norm Coleman is one of the mortgage industry's best friends. He's received $2 million from the real-estate/finance/insurance sector during the 2008 election cycle, with a total of $610,000 of that coming from real-estate PACs or individuals. And while that makes Coleman the largest recipient in the Senate who isn't running for president of contributions from the finance industry, Coleman won't be allowed to attend the event due to a 2007 ethics in lobbying law.

That law won't stop Minnesota's U.S. representatives from attending and hobnobbing with their biggest campaign supporters. John Kline's top contributors include commercial banks, which have donated $42,500 to his campaign so far. Michele Bachmann's major donors also include insurance and commercial banks. For the 2008 election cycle, she has received a total of $134,000 from those industries. Bachmann also serves on the House Financial Services Committee, whose members during the current election cycle have received a total of a total of $11,142,526 from PACS representing the finance/insurance/real-estate sector, and $7,335,250 from individuals who work in those industries.

http://minnesotaindependent.com/view/its-a-dead-mans