This exchange may have been the most underrated part of the debate:

HARWOOD: Since -- since you mentioned Fannie and Freddie, Speaker Gingrich, 30 seconds to you, your firm was paid $300,000 by Freddie Mac in 2006. What did you do for that money?

GINGRICH: Were you asking me?


GINGRICH: I offer them advice on precisely what they didn’t do.


Look -- look, this is not -- this is not...

HARWOOD: Were you not trying to help Freddie Mac fend off the effort by the Bush administration...


GINGRICH: No. No, I do -- I have never...

HARWOOD: ... and the -- to curb Freddie Mac.

GINGRICH: I have -- I assume I get a second question. I have never done any lobbying. Every contract was written during the period when I was out of the office, specifically said I would do no lobbying, and I offered advice.

And my advice as a historian, when they walked in and said to me, “We are now making loans to people who have no credit history and have no record of paying back anything, but that’s what the government wants us to do,” as I said to them at the time, this is a bubble. This is insane. This is impossible.

GINGRICH: It turned out, unfortunately, I was right and the people who were doing exactly what Congresswoman Bachmann talked about were wrong. And I think it’s a good case for breaking up Fannie Mae and Freddie Mac and getting much smaller institutions back into the private sector to be competitive and to be responsible for their behavior.

Gingrich resorts to the word “lobbying,” but that has a specific meaning, namely interceding with members of Congress. It’s not all that responsive to a query about a consulting contract to say, “I didn’t lobby Congress.” Swell. But didn’t he help Freddie Mac to continue its operation, which was a root cause of the housing crisis?

Gingrich has put out a statement on his website:

Speaker Gingrich’s consulting firm, The Gingrich Group, was retained in 2006 by Freddie Mac. To be clear, Speaker Gingrich did no lobbying of any kind, nor did his firm. This was expressly written into the Gingrich Group contracts. Instead, the Gingrich Group was hired to offer strategic advice to Freddie Mac on a number of issues.

Speaker Gingrich has always believed that America should have programs to help low income people acquire the ability to buy homes. However, as a conservative, he also believed they have to be within a context of learning how to budget and save which makes it possible for the poor to afford what they were purchasing.

Therefore, on numerous occasions in meetings with Freddie Mac, Speaker Gingrich advised that a business model that involved lending money to people with bad credit and no money down was unsustainable and a bubble, and that it was dangerous to buy securities made up of these mortgages.

The Gingrich Group also offered advice on how Freddie Mac could lower their health costs. One piece of advice offered was that Freddie Mac had the resources to adopt a Travelocity model website for prescription drugs that would inform their employees of lower cost drug alternatives.

In addition, Freddie Mac was interested in advice on how to reach out to more conservatives. The Gingrich Group stressed that Freddie Mac must be open to reform of their lending practices but that by stressing the historical success of public-private partnerships in achieving public goods at a minimum of taxpayer money and bureaucracy.

But in fact there is evidence that Gingrich was playing a role in public advocacy for Freddie. In December 2008 the Associated Press reported that “$11.7 million was paid to 52 outside lobbyists and consultants in 2006.” Gingrich was one of them. The AP explained:

The records obtained by the AP reflect growing concern within Freddie Mac over a chorus of criticism from Republicans worried that Freddie Mac and Fannie Mae had grown too big. The two companies owned or guaranteed over $5 trillion in mortgages.

The Bush administration and Federal Reserve Chairman Alan Greenspan were sounding the alarm about the potential threat to the nation’s financial health if the fortunes of the two mammoth companies turned sour. They did eventually, when they took on $1 trillion worth of subprime mortgages and when their traditional guarantee business deteriorated. Commercial banks regarded Freddie Mac and Fannie Mae as competitors and were anxious to pick up business that would result from scaling back the two companies.

Pushing back, Freddie Mac enlisted prominent conservatives, including Gingrich and former Justice Department official Viet Dinh, paying each $300,000 in 2006, according to internal records.

Gingrich talked and wrote about what he saw as the benefits of the Freddie Mac business model.

I spoke to R.C. Hammond, a spokesman for Gingrich. He said he believes that the contract ran from 2006-2008. He doesn’t know if the contract is in Gingrich’s possession or if there is an explicit statement about what services were rendered. He told me me that, in a Q & A session with executives, Gingrich did send out a warning about lending practices. Hammond says he thinks that Gingrich’s speeches were delivered to executives. If and when additional details are provided, I will pass them on.

But let’s be clear: while still in office, Gingrich was a bit of a cheerleader for the GSE. In the most comprehensive book on the topic, “Reckless Endangerment,” Gretchen Morgenson and Joshua Rosner write:

Fannie Mae was a creature of Washington, D.C., and this, [CEO James A. Johnson] knew, did not help its image. He had to win the hearts of everyday people on Main Street if he were to bullet-proof his company, and his lucrative position atop it.

So, after a cross-country trip in 1993, Johnson came up with the idea that Fannie Mae needed a local presence in communities nationwide. Boots on the ground was what his company required.

Thus were born the Fannie Mae Partnership Offices. Devised by Johnson, the partnership offices put Fannie Mae executives in place across America; soon the company was opening storefronts in cities and towns where it could partner with local officials to promote homeownership and, by association, its role as a good-deed doer. The partnership offices and their large financial commitments were soon garnering upbeat headlines in local newspapers, promoting Fannie’s soft side to everyday people.

Even more important, though, the partnership offices cemented the company’s relationships with members of Congress. By supporting housing initiatives that lawmakers could take credit for in their home districts, Fannie provided publicity for the very congressmen and -women whom it relied on for help and protection in Washington. With Fannie Mae’s new regulator, OFHEO, in the midst of devising new and possibly punishing capital requirements for the company, support in Congress was more crucial than ever. . . .

Democrats like [Sen. Ted] Kennedy were not the only beneficiaries of Fannie Mae’s partnership offices. Republicans, who believed in smaller government and fewer agencies, were potential threats requiring special care and feeding by the company. So when Johnson traveled to Atlanta to launch the new office there in February 1995, he made sure to invite some powerful Republicans to join him at the podium.

Once again, the focus for the Atlanta partnership office would be on creating mortgage products for first-time homebuyers and low-and moderate-income consumers, Johnson said. “Our commitment is to make homeownership in the greater Atlanta area more accessible than ever before. We think that the best way to do that is to work as closely as possible with the people of the city and the surrounding counties in their neighborhoods, and with local community groups, mortgage lenders, nonprofit housing organizations, and the city and county governments.”

There to celebrate the Fannie Mae commitment was none other than Newt Gingrich, the Georgia Republican who was Speaker of the House of Representatives and a big proponent of reducing government’s size.

“Fannie Mae is an excellent example of a former government institution fulfilling its mandate while functioning in the market economy,” Gingrich crowed, not quite accurately, for there was nothing “former” about Fannie Mae’s government status. “Fannie Mae has had a regional presence in Atlanta for over 40 years and the announcement of a partnership office demonstrates its continued commitment to affordable housing in the Atlanta metropolitan area.”

Fannie at the time was certainly not a private entity as the term “former” implies.

Gingrich was there for Fannie Mae again that April. A press release at the time stated: “House Speaker Newt Gingrich (R-GA) today joined representatives from the Fannie Mae, the Atlanta Neighborhood Development Partnership (ANDP) and area lenders and housing officials for the grand opening of the new Cobb Housing, Inc. headquarters. At the ceremony, the Fannie Mae Foundation awarded Cobb Housing a $15,000 grant to support its housing counseling services. Speaker Gingrich, who participated in the ceremony, applauded Cobb Housing’s efforts to improve affordable housing opportunities in Cobb County. ‘To help people achieve the American dream of homeownership, we need to prepare people to handle the enormous responsibility of owning their own home,’ said Speaker Gingrich. ‘I commend Cobb Housing and the Fannie Mae Foundation for enhancing housing counseling programs that can better prepare families for this responsibility.’”

These homeownership “education” partnerships were part of Fannie’s well-orchestrated campaign to convince lawmakers and the public that it was all about responsible borrowing The reality, we now know, was quite different. I asked Hammond if Gingrich regretted any of those remarks or felt he was duped by the lenders. Hammond said he hadn’t asked Gingrich.

Gingrich was by no means alone, either as a congressman or after going through the revolving door, in providing assistance in one form or another to Fannie and Freddie. The story of how these entities employed political insiders to stave off regulation, incur goodwill and maintain its hugely irresponsible business model has been told in detail time and time again.

But Gingrich has some explaining to do about his own role with regard to Fannie and Freddie. At the very least, by enlisting Gingrich as a “consultant,” Freddie managed to get a powerful critic of government mismanagement to provide his critiques privately, out of earshot of the public. At some point, maybe in a debate, the voters should get a full accounting of his role. They can then decide if Gingrich was helping the taxpayer by trying to get Freddie to clean up its act, or helping himself to the trough at the later expense of U.S. taxpayers, or some of both.