Government Takeover to Roil K Street


Yesterday, I was thinking about Sen. Jim DeMint’s bill to ban Fannie Mae and Freddie Mac from lobbying Congress and I thought that the legislative fix probably would not be necessary after the government takeover. Looks like that was correct:

With just three sentences, Federal Housing Finance Agency Director James B. Lockhart on Sunday sent an unambiguous signal that one of Washington’s longest-running parties is over — and that some hangovers are on the way.

In the wake of the government takeover of the two beleaguered mortgage giants, Fannie Mae and Freddie Mac, compensation for their newly recruited CEOs “will be significantly lower than the outgoing CEOs,” said Lockhart.

“All political activities — including all lobbying — will be halted immediately. We will review the charitable activities,” he added.

As the Politico explains, this will be a complete shock to the political culture in Washington, where Fannie Mae and Freddie Mac have been two of largest campaign contributors through their PACs and are prolific spenders on lobbying.

• Since the 1990 election cycle, Fannie and Freddie employees and political action committees have given $19.5 million to federal candidates and committees. Freddie ranks among the top 100 industry donors of all time.

• Fannie had already given $1.3 million to candidates for the 2008 election cycle, and Freddie had given nearly $600,000.

• Fannie and Freddie have spent more than $180 million lobbying Capitol Hill in the past 10 years.

• In the first six months of this year, as the housing market collapsed and scrutiny heightened on Capitol Hill and from the Bush administration, Fannie and Freddie spent roughly $8 million combined to advocate for their interests.

• Between 1980 and 2007, the Fannie Mae Foundation donated $608,000 to the Congressional Black Caucus Foundation and $285,000 to the Congressional Hispanic Caucus Institute.

For more on Fannie and Freddie’s giving over the years see this post by Open Secrets’ .