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FITTON: Secret mortgage politics
There is a scandal behind the collapse of Fannie Mae and Freddie Mac and their role in helping trigger the ongoing financial crisis. A key component of understanding exactly what went on is the role political corruption played in the failure of adequate congressional oversight and the catastrophic collapse of these “government-sponsored entities” in 2008. That’s why Judicial Watch filed a Freedom of Information Act (FOIA) lawsuit against the Obama administration to get hold of documents related to Fannie’s and Freddie’s campaign contributions over the past several election cycles.
We figure that because American taxpayers are on the hook for trillions of dollars, potentially including at least $400 billion alone for Fannie and Freddie, the American people deserve to know how and why this financial collapse occurred and who in Washington is responsible.
Unfortunately, the Obama administration disagrees.
Just last month, the Federal Housing Finance Agency (FHFA), the agency that runs Fannie Mae and Freddie Mac, responded to our FOIA lawsuit by telling us that none of the documents we seek are subject to public disclosure under the FOIA.
Here’s the exact language the Obama agency used in its recent court filing: “Any records created by or held in the custody of the Enterprises (Fannie and Freddie) reflecting their political campaign contributions or policies, stipulations and requirements concerning campaign contributions necessarily are private corporate documents. They are not ‘agency records’ subject to disclosure under FOIA.”
So there you have it. American taxpayers are paying the tab for the collapse of Fannie and Freddie but are not allowed to obtain any information about why it happened. The Obama administration is saying, in effect, “None of your business.”
Obama administration officials and their lawyers can argue until they are blue in the face that Fannie and Freddie are not federal agencies, but their reasoning is straight out of “Alice in Wonderland.”
Remember how all of this went down?
Back in September 2008, when the financial sky was falling, the government executed a plan to place Fannie Mae and Freddie Mac under federal control. There is nothing ambiguous about the government’s relationship with Fannie and Freddie. The two agencies are completely owned and operated by the federal government and therefore are subject to FOIA, which is exactly what Judicial Watch argued in a March 5 court filing: “[I]t is undisputed that FHFA (Federal Housing Finance Agency) has assumed full legal custody of the requested records. The agency ‘obtained’ the records pursuant to the statute that plainly granted it ‘title to the books, records, and assets’ of Fannie Mae and Freddie Mac … hence these records are subject to FOIA like any other [federal government] agency records.”
Now, let’s stop and think for a second. Why would the Obama administration want to keep secret records about Fannie’s and Freddie’s campaign contributions? A review of the top recipients of Fannie and Freddie campaign contributions from 1989 through 2008 yields an obvious answer. President Obama is second on the list, sandwiched between Democratic heavyweights Sen. Christopher J. Dodd (first) and Sen. John Kerry (third). And the president rocketed to the near-top of the chart with just four years under his belt in the U.S. Senate. This whole scandal blows out of the water any notion that Mr. Obama is keeping his promises on transparency.
The truth is that few in the Obama administration and Congress want the American people to know all the sordid details regarding Fannie and Freddie. Politicians of every stripe were on the take from Fannie and Freddie. And now we’re all paying for it, literally.
Judicial Watch’s effort to open up Fannie and Freddie to public scrutiny as the law requires is not just about political corruption - it also is about accountability. Largely through Freddie and Fannie, the Obama administration has essentially taken government control of the U.S. mortgage market and its attendant liabilities - which means you, me, our children and grandchildren are on the hook for trillions of dollars (more than $5 trillion so far). This unprecedented takeover of the private sector is being done by government entities that the Obama administration says are not subject to anyopen records request. This lawlessness should not stand.
Tom Fitton is president of Judicial Watch, a nonpartisan educational foundation that fights government corruption.
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