Newt Gingrich's Freddie Mac Problem
Eddlem, Thomas R., The New American
Former House Speaker Newt Gingrich earned at least $1.6 million between 1999 and 2007 in "consulting" fees from mortgage giant Freddie Mac, Bloomberg News reported November 16. The Bloomberg story was followed one day later by the revelation that Gingrich may have been paid as much as $30,000 per hour for his consulting services to Freddie Mac, based on his recollection as to how much time he put into it.
"I think less than maybe once a month, they [Freddie Mac] would drop by," Gingrich told Fox News' Greta Van Susteren on November 17. "We would spend an hour. It would always start with me listening. I'd always say, 'What are you trying to solve? What are your concerns? What are you trying to get done?' And I've done this with many, many clients " Gingrich claimed that he may not have personally done all of the consulting billed to Freddie Mac, stressing that over the years the Gingrich Group had as many as 30 employees with offices in Atlanta and St. Louis as well as Washington, D.C. But it's unclear what Freddie Mac would be interested in accomplishing in these branch offices in order to promote Freddie Mac and its legislative agenda with Republicans on Capitol Hill.
Gingrich, when asked in a November 9 GNBC presidential debate how he earned some $300,000 in consulting fees with Freddie Mac, said his role was to offer advice as an "historian." On that occasion, Gingrich denied acting as a lobbyist and claimed he advised the mortgage giant to end their practice of guaranteeing sub-prime mortgages. Debate moderator John Harwood hadn't accused Gin-grich of lobbying, and had only asked what he had done to earn a $300,000 contract. By knocking down the lobbying straw-man argument, Gingrich hoped to end the issue. But his "historian" remark only made those in the press more curious about what he'd done to earn this very substantial paycheck. Freddie Mac and its sister organization, Fannie Mae, both chartered by Congress, fueled the housing bubble in the last decade. "My advice," Gingrich said in the November 9 debate, "I said to them at the time, this is a bubble. This is insane. This is impossible."
The Bloomberg report countered Gingrich's debate claims about his dissent from Freddie Mac's policies. "None of the former Freddie Mac officials who spoke on condition of anonymity said Gingrich raised the issue of the housing bubble or was critical of Freddie Mac's business model." Gingrich told Bloomberg that he "offered them [Freddie Mac] advice on precisely what they didn't do," but it's unclear during which stint as a counselor Gingrich offered this advice, if he offered the advice at all. Gin-grich worked for Freddie Mac as a consultant from 1999-2002 and 2006-07 and his consulting firm, the Gingrich Group, earned between $1.6 million and $1.8 million in consulting fees.
Moreover, Bloomberg's sources describe Gingrich's role less as serving as historian and more as training lobbyists and providing personal contacts to lobbyists. "His primary contact inside the organization was Mitchell Delk, Freddie Mac's chief lobbyist, and he was paid a self-renewing, monthly retainer of $25,000 to $30,000 between May 1999 until 2002, according to three people familiar with aspects of the business agreement." Gingrich announced November 16 while on the campaign trail that he had offered "strategic advice" to the mortgage giant, without elucidating further what that meant.
An Associated Press report November -16 corroborated much of the Bloomberg account, noting that Gingrich's role was to win Republican support for Freddie Mac. …