So far the U.S. government has bailed out Fannie Mae and Freddie Mac to the tune of at least $130 billion, and perhaps as much as $1 trillion. And yet, the Obama administration continues to stonewall the release of documents that could shed light on why Fannie and Freddie failed, thereby sending the economy into a tailspin from which we have yet to recover. (Those records are housed at the Federal Housing Finance Agency (FHFA) now that Fannie and Freddie are owned and operated by the federal government.)
Judicial Watch is especially interested in documents related to the political contributions of Fannie and Freddie. And we’ve gone to court to get our hands on them. Unfortunately, our efforts sustained another setback when an appellate court sided with the government and ruled that Fannie and Freddie’s records are not subject to Freedom of Information Act (FOIA) law and may continue to be kept secret:
The Federal Housing Finance Agency (FHFA) has been the conservator of Fannie Mae and Freddie Mac since 2008. Judicial Watch filed a request under the Freedom of Information Act (FOIA) asking the FHFA to disclose records of Fannie and Freddie that show how much money they gave to political campaigns. But it is uncontested that no one at the FHFA has ever read or relied upon any such documents. The district court held that the documents are not agency records subject to FOIA, and we agree.
So, in other words, because no one at the FHFA, the agency in charge of Fannie Mae and Freddie Mac, has “read or relied upon” the documents, they are not considered agency records under FOIA, and cannot be released.
(Here’s an idea. Maybe someone at FHFA should read the documents so someone in the government might have a clue as to why these two institutions failed so miserably.)
We obviously, strenuously disagree with that Alice-in-Wonderland logic, as explained in our appellate brief: “In every meaningful way, the FHFA is lawfully in control of these records. There is nothing contingent, hypothetical, indefinite, or limiting about this plain statutory language vesting the FHFA with both legal custody and lawful control over the records.” Our lawyers are considering what the next step should be in this important legal battle.
But even though the record is incomplete with regard to Fannie and Freddie, we do know of one major factor in their demise: the corrupt relationship between the two mortgage giants and their congressional conspirators, who looked the other way while Fannie and Freddie continued their reckless lending policies. That’s why we’re after these records.
Members of Congress received more than $4.8 million in political contributions from Fannie Mae and Freddie Mac over a ten-year period.
According to OpenSecrets.org from 1998 through 2008, the top ten recipients of Fannie Mae and Freddie Mac’s political largesse are as follows: Senator Dodd (D-CT), then-Senator Obama (D-IL), Senator Kerry (D-MA), Senator Bennett (R-UT), Rep. Bachus (R-AL), Rep. Blunt (R-MO), Rep. Kanjorski (D-PA), Senator Bond (R-MO), Senator Shelby (R-AL), Senator Reed (D-RI). Senator Dodd, the top recipient of Fannie Mae and Freddie Mac campaign contributions, is Chairman of the Senate Banking Committee responsible for regulating the mortgage industry. Notably, President Obama was a top recipient of campaign monies despite being in the Senate for only three years.
Still, this is just the tip of the iceberg. The documents currently being withheld by FHFA likely contain a treasure trove of information related to the inner workings of these two government-controlled agencies. That’s why Judicial Watch is fighting so aggressively to get hold of them.
But just because the Obama administration thinks the details of the collapse of Fannie and Freddie are none of your business, that doesn’t mean they’re going to stop taking your money.
According to The Washington Post:
Freddie Mac, the mortgage finance house, said Monday that it will ask for an additional $1.5 billion of taxpayer money to make up for losses stemming from weak housing markets.
The request falls on the heels of an announcement last week by Freddie Mac’s sister organization, Fannie Mae, that it will need $5.1 billion to make up its shortfall. The two coincide with Standard & Poor’s downgrade of the U.S. government’s credit rating from AAA status to AA+, which has the potential to affect the institutions’ lending and collecting abilities.
(The Associated Press is also reporting that in an act of abject desperation the Obama administration plans to be the world’s largest landlord: “The Obama administration may turn thousands of government-owned foreclosures into rental properties to help boost falling home prices. The Federal Housing Finance Agency said Wednesday it is seeking input from investors on how to rent homes owned by government-controlled mortgage companies Fannie Mae and Freddie Mac and the Federal Housing Administration.”)
The story of Fannie Mae and Freddie Mac is the story of the entire bailout scheme. The government continues to “invest” trillions of taxpayer dollars to prop up failing private institutions with no end in sight. And the Obama administration continues to stonewall and obfuscate even as it asserts government control of 90% of the housing market.
I don’t know about you but it seems that we’re in the same sorry spot three years after the bailouts/government takeovers that “rescued” our economy. Our credit has been downgraded, the stock market is on a rollercoaster, our government continues its gangster ways in attempting to run the private sector, the government-controlled housing market continues to be a mess, and our banks stand on a precipice. Unless our nation reckons with the government corruption behind the ongoing financial crisis, I suspect our economy (and our republic) will continue to flounder.
That is why Judicial Watch has been in tireless pursuit of these records, and indeed any records, related to Fannie and Freddie and the bailouts. If you want to read more about our bailout investigations and lawsuits, please click here.