RAHM EMANUEL & FREDDIE MAC

I accidentally ran across this story today on the ABC NEWS website that I found rather interesting. Representative Emanuel was on the Freddie Mac (Federal Home Loan Mortgage Corporation) Board of Directors from April 2000 when he was appointed by former President Clinton, to May 2001 when he resigned to run for Congress. It was during this time that, according to a Securities and Exchange Commission complaint, that Freddie Mac misreported profits to the tune of billions of dollars in order to deceive investors. The years cited in the complaint ranged from 2000 to 2002. I find it especially interesting that a mainstream media outlet even broke this story. Here's the entire article:

Emanuel Was Director Of Freddie Mac During Scandal

New Obama Chief of Staff, Others on Board, Missed "Red Flags" of Alleged Fraud Scheme

By BRIAN ROSS and RHONDA SCHWARTZ

November 7, 2008

President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com.

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having "failed in its duty to follow up on matters brought to its attention."

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for "13 months-a relatively short period of time."

The spokesperson said that while on the board, Emanuel "believed that Freddie Mac needed to address concerns raised by Congressional critics."

Freddie Mac agreed to pay a $50 million penalty in 2007 to settle the SEC complaint and four top executives of the Federal Home Loan Mortgage Corporation were charged with negligent conduct and, like the company, agreed to settle the case without admitting or denying the allegations.

The actions by Freddie Mac are cited by some economists as the beginning of the country's economic meltdown.

The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds.

Freddie Mac records have been subpoenaed by the Justice Department as part of its investigation of the suspect accounting procedures.

Emanuel was named to the Freddie Mac board by President Bill Clinton in 2000 and resigned his position when he ran for Congress in May, 2001.

During the years 2000, 2001 and 2002, according to the SEC, Freddie Mac substantially misrepresented its income to "present investors with the image of a company that would continue to generate predictable and growing earnings."

The role of the 18-member board of directors, including Emanuel, was not addressed in the SEC's public action but was heavily criticized by the oversight group (OFHEO) in 2003.

The oversight report said the board had been apprised of the suspect accounting tactics but "failed to make reasonable inquiries of management."

The report also said board members appointed by the President, such as Emanuel, serve terms that are far too short "for them to play a meaningful role on the Board."

As a Congressman, Emanuel recused himself from any votes dealing with Freddie Mac until just this year.

In dealing with the nation's economic crisis, the new White House chief of staff will almost certainly be involved in discussions about the house and mortgage markets.

Emanuel's spokesperson said, "As White House chief of staff he will work with President-elect Obama and his economic advisors to help ensure we protect taxpayers and homeowners."

Those last two paragraphs are of concern. The suspected misrepresentations were brought to the attention of the board, but no one made any inquiries at all. Now that Representative Emanuel is President-Elect Obama's Chief of Staff, if anything is brought to his attention that needs investigating, he has an obligation to do so, regardless of any political consequences and regardless of the party to which any guilty parties belong.

OUR LIBERAL NEWS MEDIA SUMMED UP - BY A DEMOCRAT JOURNALIST!

Here is an article sent to me by Carolyn, NO APOLOGIES ROUND 2. She has an excellent journal, so please visit and leave a comment.

This article was written by a journalist for THE RHINO TIMES in Greensboro, North Carolina who is a Democrat (confirmed by TRUTHORFICTION.COM). It is an excellent summation of the state of the American news media. This is nothing new. Our news media has slanted the news as far back as I can remember (which goes back to around 1970 when I became interested in world events and politics). I became disgusted as a pre-teen with the distortions and outright lies of the media. The most blatant lies were perpetrated by the television news networks, and this was of course before cable news, about the Vietnam war. Primarily CBS News kept on giving the American public on how we were being defeated in Vietnam, and the sick, morbid body count was heard daily. CBS News made one mistake that began my questioning them - their video was of the SAME AIRCRAFT CRASH over and over again. I said at the time it was either the same airplane, which looked like a C-130, or the soldier standing in the lower right hand corner really got around! It was obviously the same man while the newscaster was leading the American public to believe that these were different photos of different crashes. After listening to the BBC World News for a while on shortwave radio, I found stark differences between the accounting of the war by our media and theirs. I finally drew the conclusion, and told a number of my friends, that the only thing one could count on in this news coverage was that there was a war in Vietnam. Beyond that, we had no way of knowing what was fact or fiction. The same holds true today.

The author, Orson Scott Card, also explains the origin of the current mortgage crisis - and the fact that it was completely and totally preventable.

Would the Last Honest Reporter Please Turn On the Lights?

By Orson Scott Card
October 5, 2008

An open letter to the local daily paper -- almost every local daily paper in America:

I remember reading All the President's Men and thinking: That's journalism. You do what it takes to get the truth and you lay it before the public, because the public has a right to know.

This housing crisis didn't come out of nowhere. It was not a vague emanation of the evil Bush administration. It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. FANNIE MAE and FREDDIE MAC were authorized to approve risky loans. What is a risky loan? It's a loan that the recipient is likely not to be able to repay. The goal of this rule change was to help the poor -- which especially would help members of minority groups. But how does it help these people to give them a loan that they can't repay? They get into a house, yes, but when they can't make the payments, they lose the house -- along with their credit rating. They end up worse off than before. This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them. Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans. (Though why quasi-federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to contribute to the political campaigns of Congressmen who support increasing their budget.)

Isn't there a story here? Doesn't journalism require that you who produce our daily paper tell the truth about who brought us to a position where the only way to keep confidence in our economy was a $700 billion bailout? Aren't you supposed to follow the money and see which politicians were benefitting personally from the deregulation of mortgage lending? I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-gate." Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting subprime mortgage loans almost up to the minute they failed. As Thomas Sowell points out in a TownHall.com essay entitled Do Facts Matter? "Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury." These are facts. This financial crisis was completely preventable. The party that blocked any attempt to prevent it was ... the Democratic Party. The party that tried to prevent it was ... the Republican Party. Yet when Nancy Pelosi accused the Bush administration and Republican deregulation of causing the crisis, you in the press did not hold her to account for her lie. Instead, you criticized Republicans who took offense at this lie and refused to vote for the bailout! What? It's not the liar, but the victims of the lie who are to blame?

Now let's follow the money ... right to the presidential candidate who is the number-two recipient of campaign contributions from Fannie Mae. And after Freddie Raines, the CEO of Fannie Mae who made $90 million while running it into the ground, was fired for his incompetence, one presidential candidate's campaign actually consulted him for advice on housing. If that presidential candidate had been John McCain, you would have called it a major scandal and we would be getting stories in your paper every day about how incompetent and corrupt he was. But instead, that candidate was Barack Obama, and so you have buried this story, and when the McCain campaign dared to call Raines an "adviser" to the Obama campaign -- because that campaign had sought his advice -- you actually let Obama's people get away with accusing McCain of lying, merely because Raines wasn't listed as an official adviser to the Obama campaign. You would never tolerate such weasely nit-picking from a Republican. If you who produce our local daily paper actually had any principles, you would be pounding this story, because the prosperity of all Americans was put at risk by the foolish, short-sighted, politically selfish, and possibly corrupt actions of leading Democrats, including Obama. If you who produce our local daily paper had any personal honor, you would find it unbearable to let the American people believe that somehow Republicans were to blame for this crisis.

There are precedents. Even though President Bush and his administration never said that Iraq sponsored or was linked to 9/11, you could not stand the fact that Americans had that misapprehension -- so you pounded us with the fact that there was no such link. (Along the way, you created the false impression that Bush had lied to them and said that there was a connection.) If you had any principles, then surely right now, when the American people are set to blame President Bush and John McCain for a crisis they tried to prevent, and are actually shifting to approve of Barack Obama because of a crisis he helped cause, you would be laboring at least as hard to correct that false impression. Your job, as journalists, is to tell the truth. That's what you claim you do, when you accept people's money to buy or subscribe to your paper. But right now, you are consenting to or actively promoting a big fat lie -- that the housing crisis should somehow be blamed on Bush, McCain, and the Republicans. You have trained the American people to blame everything bad -- even bad weather -- on Bush, and they are responding as you have taught them to. If you had any personal honor, each reporter and editor would be insisting on telling the truth -- even if it hurts the election chances of your favorite candidate. Because that's what honorable people do. Honest people tell the truth even when they don't like the probable consequences. That's what honesty means. That's how trust is earned. Barack Obama is just another politician, and not a very wise one. He has revealed his ignorance and naivete time after time -- and you have swept it under the rug, treated it as nothing. Meanwhile, you have participated in the borking of Sarah Palin, reporting savage attacks on her for the pregnancy of her unmarried daughter -- while you ignored the story of John Edwards's own adultery for many months.

So I ask you now: Do you have any standards at all? Do you even know what honesty means? Is getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for? You might want to remember the way the National Organization of Women threw away their integrity by supporting Bill Clinton despite his well-known pattern of sexual exploitation of powerless women. Who listens to NOW anymore? We know they stand for nothing; they have no principles. That's where you are right now. It's not too late. You know that if the situation were reversed, and the truth would damage McCain and help Obama, you would be moving heaven and earth to get the true story out there.

If you want to redeem your honor, you will swallow hard and make a list of all the stories you would print if it were McCain who had been getting money from Fannie Mae, McCain whose campaign had consulted with its discredited former CEO, McCain who had voted against tightening its lending practices. Then you will print them, even though every one of those true stories will point the finger of blame at the reckless Democratic Party, which put our nation's prosperity at risk so they could feel good about helping the poor, and lay a fair share of the blame at Obama's door.

You will also tell the truth about John McCain: that he tried, as a Senator, to do what it took to prevent this crisis. You will tell the truth about President Bush: that his administration tried more than once to get Congress to regulate lending in a responsible way. This was a Congress-caused crisis, beginning during the Clinton administration, with Democrats leading the way into the crisis and blocking every effort to get out of it in a timely fashion.

If you at our local daily newspaper continue to let Americans believe --and vote as if -- President Bush and the Republicans caused the crisis, then you are joining in that lie. If you do not tell the truth about the Democrats -- including Barack Obama -- and do so with the same energy you would use if the miscreants were Republicans -- then you are not journalists by any standard. You're just the public relations machine of the Democratic Party, and it's time you were all fired and real journalists brought in, so that we can actually have a daily newspaper in our city.

Mr. Card did an excellent job here. This could be said of most of the television news media too. There will be no recanting of any mispresentations or admissions of one-sidedness at all. I agree entirely with Mr. Card's remedy. Thank you, Carolyn, for sharing this.