Newt Gingrich’s relationship with Freddie Mac is becoming a problem, or more specifically, his failure to level with voters about what he did for the lender, is becoming a problem. He claims he got $300,000 to be an “historian.” Freddie Mac says something different.
For starters it now appears there are two contracts totalling between $1.6 million and $1.8 million. That’s more, according to Bloomberg, than “was disclosed in the middle of congressional investigations into the housing industry collapse.” In his first stint with Freddie Mac Gingrich got $25,000 to $30,000 per month to advise the lender. One has to wonder what on earth Gingrich had to say that could have been worth that amount.
Then there is the second agreement, which has been the subject of multiple reports since Gingrich’s CNBC debate. Bloomberg got the ball rolling yesterday, reporting on the agreement that Gingrich claims engaged him as an “historian”:
Former Freddie Mac officials familiar with the consulting work Gingrich was hired to perform for the company in 2006 tell a different story. They say the former House speaker was asked to build bridges to Capitol Hill Republicans and develop an argument on behalf of the company’s public-private structure that would resonate with conservatives seeking to dismantle it.
If Gingrich concluded that the company’s business model was at risk and that the housing market was a “bubble,” as he said during the debate, he didn’t share those concerns with Richard Syron, Freddie Mac’s chief executive officer at the time, a person familiar with the company’s internal discussions said.
According to the Bloomberg report, Freddie Mac contends that Gingrich’s job was to pull in conservative support for the taxpayer-backed lender. Not surprisingly, Gingrich, like other big-name Democrats and Republicans, was supposed to “identify potentially supportive party members on Capitol Hill.” In Gingrich’s case, two executives told Bloomberg, he was also supposed to “provide written material that could be circulated among conservatives on Capitol Hill and in outside organizations.” Bloomberg also says that he attended internal meetings and made a donation to Freddie Mac’s PAC. Freddie Mac officials dispute that he “warned” the lender about the housing bubble.
Gingrich denies Freddie Mac’s version of events. He told Huffington Post he did “no lobbying of any kind, and I offered strategic advice and that’s all I do. I don’t go to the Hill. I don’t lobby in any way. I haven’t for the years I’ve left the speakership, period.” But that’s not what Freddie Mac officials accused him of doing. He wasn’t lobbying for or against specific legislation in their telling; He was engaged in advocacy and relationship-building, the very sort that Freddie Mac and Fannie Mae used to make sure they weren’t more heavily regulated or privatized.
A Republican Capitol Hill veteran tells me that while he has no direct knowledge of Gingrich’s specific situation, “the one thing to remember is that during that period just about every lobbyist/consultant (R and D) was on payroll for Fannie or Freddie. Their strategy then was to pay everyone so that no one would be lobbying against them.” And it worked — until the housing bubble burst and it all came tumbling down.
Freddie Mac isn’t commenting on the record and isn’t releasing documents to establish Gingrich’s role. This is inexcusable. To the extent there is a confidentiality agreement (why would Freddie demand his work be a secret?), Freddie and Gingrich can waive it. Gingrich is running for president, telling an improbable tale (he alone among a flock of hired guns wasn’t engaged in influence peddling?) and refusing to provide voters with material needed to assess his credibility. This is precisely the Gingrich so many Republicans recall — self-important, truth-shading and continually on the make to feather his own nest.
And Freddie Mac was certainly not his only high-paying special interest group client. In April the Center for Public Integrity reported:
According to IRS records, the ethanol group Growth Energy paid Gingrich’s consulting firm $312,500 in 2009.The former House Speaker was the organization’s top-paid consultant, according to the records. His pay was one of the group’s largest single expenditures, as it took in and spent about $11 million to promote ethanol and to lobby for federal incentives for its use.
In a Growth Energy publication, Gingrich was listed as a consultant who offered advice on “strategy and communication issues” and who “will speak positively on ethanol related topics to media.”
Again, Gingrich denies he was a “lobbyist.” But that’s a red herring. What Gngrich has been is a high-flying Washington influence peddler who took big money to hawk for interests that surely didn’t have a free-market bent.
If he’s not serious about running for president he can stonewall all he likes. But if he wants to do more than raise his speaking fees and book sales he needs to come clean and reveal all his “consulting” arrangements. His refusal to do so only underscores the problems with his candidacy and the inherent contradiction at the heart of his message: The man who personifies Washington influence buying is selling himself as the cure to Washington corruption and self-dealing