Fannie Mae and Freddie Mac, the giant government-chartered mortgage funding companies, continued to spend more on lobbying in the first half of this year than almost every other corporation in the United States.
According to data compiled by PoliticalMoneyLine, Freddie Mac's $6.7 million in lobbying expenditures ranked sixth on a list of more than 600 companies and organizations spending more than $250,000. That was second among corporations only to General Electric Co., which spent $8.4 million. But it was a drop from the nearly $10 million Freddie spent in the second half of last year, when it was dealing with an accounting scandal.
Fannie Mae, which spent $5 million in the first six months of the year, ranked 16th overall and 8th among corporations, below Altria (formerly known as Philip Morris), Northrop Grumman Corp., SBC Communications Inc., Microsoft Corp. and General Motors Crop.
The Chamber of Commerce of the United States topped the list with $20.1 million in spending on lobbying.
A prime focus of the lobbying by Fannie and Freddie this year was now-stalled legislation to create a more powerful regulator for the two companies. The companies said they favor a strong regulator. They also lobbied against major provisions of the proposed legislation.
The appearance of Freddie and Fannie near the top of the lobbying list, which Bloomberg News reported in a story last week, is "somewhat surprising," said Kent Cooper, co-founder of PoliticalMoneyLine, which compiles data from public reports.
"You've got a public trust-type function going on, and yet they're spending money for lobbying the legislature that, in essence, created them," Cooper said. "You would think organizations created by Congress wouldn't need to lobby Congress."
But lobbying Congress has long been a high priority for the two companies, which have defended their turf and their privileges against repeated legislative threats. Beyond their in-house lobbying staffs, Fannie and Freddie hired dozens of outside firms, according to lobbying records, paying them fees up to $340,000 for six months in Freddie's case, and up to $200,000 in Fannie's case.
The federal government chartered the two Washington-area companies to help ensure that banks and other lenders have enough money to meet the demand for home mortgages. The companies buy mortgages from lenders, thereby providing cash for the lenders to issue more loans. They also package mortgages into securities for sale to investors.
Government analysts have estimated that federal sponsorship of Fannie and Freddie translates into business advantages worth billions of dollars -- chiefly the ability to borrow money at a discount.
FM Policy Focus, a rival financial services industry group started to keep the two companies from expanding their businesses, spent $1.5 million on lobbying during the first half of this year.
"Lobbying is an important way for us to educate and inform Congress about who we are and our role in the national housing market," said Sharon McHale, a spokeswoman for Freddie Mac.
"The fact of the matter is that other large financial institutions, including our critics . . . spend substantially more than we do on lobbying because they give through numerous different ways," such as trade associations, McHale said.
The companies' lobbying came up at a hearing this month on regulators' allegations that Fannie Mae violated accounting rules.
"I am tempted to ask how many people in this room are on the payroll of Fannie Mae, because what they do is they basically hire every lobbyist they can possibly hire -- they hire some people to lobby and they hire some people not to lobby so that the opposition can't hire them," said Rep. Christopher Shays (R-Conn.).
Fannie Mae spokesman Brian Faith said "it is entirely appropriate" for the company to use lobbyists. "This enables the company to properly communicate its positions on critical issues, share information with policymakers, and ensure that the interests of our shareholders are considered."