Mitchell Delk, the newly installed chief lobbyist at The Federal Home Loan Mortgage Corporation (FHLMC), a.k.a. “Freddie Mac,” in 1999, hired Newt Gingrich, the former speaker of the House of Representatives, a prominent Washington insider to advise him on how to build support among conservatives on Capitol Hill, reports Reuters recently.
Gingrich’s job was to help strategize the firm’s building of goodwill in Congress by, among other things, holding fundraising events for influential members of House and Senate committees that had oversight of Freddie Mac. Gingrich had expertise in such matters as an architect of GOPAC, one of the Republican Party's most important and influential political action committees.
Was Newt Gingrich a lobbyist for Freddie Mac? Technically, no; at least that is the label Gingrich specifically wanted to avoid in his contract with the firm, so there is a clause in the initial document specifying that he would not do any lobbying. He now claims that he was paid as a “consultant” – more specifically an “historian” -- not a lobbyist.
A “lobbyist” is a person who tries to influence legislation on behalf of a special interest. A “consultant” is a person who gives professional or expert advice. In this case, Newt Gingrich was in reality a consultant employed to give professional expert advice to Freddie Mac lobbyists in regard to how best to influence legislation on Capitol Hill on behalf and in favor of Freddie Mac.
Lobbyist or consultant – here it was manifestly a distinction without a difference. Newt Gingrich was paid a total $1.8 million under two separate contracts between 1999 and 2008 to advise Freddie Mac’s chief lobbyist and his lobbying team about how best to influence Congress. He taught the lobbyists how to lobby.
Gingrich was part and parcel of that lobbying team right up until the U.S. Treasury placed Freddie Mac and Fannie Mae under conservatorship after the firm sustained $14.9 billion in losses when the U.S. housing market crashed. In short, Freddie Mac played a major role in the subprime lending crisis causing the U.S. housing market to implode, and Newt Gingrich was involved in the mess up to his eyeballs.
Gingrich's campaign admitted last year that part of his job was to help Freddie Mac build bridges to conservatives. His contract stated that he would work with Delk and other Freddie Mac officials, i.e. lobbyists, on "strategic planning and public policy," as well as contribute to “corporate planning and business goals."
He joined Delk’s government affairs department at Freddie Mac right at the very time the firm was actively hiring several former members of Congress and congressional aides for his lobbying team. It was when conservative Republicans in Congress were seeking regulations to rein in the profits of government-sponsored lenders such as Freddie Mac.
Delk successfully opposed such regulation attempts by hiring dozens of outside consultants, including Newt Gingrich, and spending as much on lobbying as many major corporations. His lobbying team came under investigation by the FEC in 2003, and Freddie Mac was found to have improperly used corporate resources to put on 85 fundraising events that raised about $1.7 million for federal candidates, a majority of them Republicans.
In 2006, Freddie Mac agreed to a $3.8 million settlement for violating federal election rules, the largest civil fine the FEC had ever levied. In 2007 the housing market crashed when too many un-creditworthy homeowners given generous mortgage terms by Freddie Mac and other lenders began defaulting on their loans. And the rest is history.
The painful irony now is Newt Gingrich’s pitiful characterization of his job with Freddie Mac as an "historian." It’s laughable to say the least. The lobbying team at Freddie Mac was hardly interested in the subject of history in 1999 when the boss hired Newt Gingrich, the consummate Washington insider. It wasn’t history they sought; no, it was much more about how to get influence on Capitol Hill.
It was about influence peddling -- lobbying, consulting and influence peddling; in this case it’s all the same – a distinction without a difference.
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