VOTERS MUST ASSESS every presidential candidate’s character, including his or her propensity to exploit public service for private gain. It’s not always easy to judge. Newt Gingrich, though, comes pre-vetted; he has a long record both in and out of office. And while the former House speaker insists that he never stooped to lobbying per se in his 13-year post-congressional career, he clearly did cash in on his status and connections, whether as a high-priced speechmaker or as an “adviser” to Freddie Mac — the ill-fated “government-sponsored enterprise” (GSE) in housing finance that is now sucking up taxpayer bailout money. All told, Freddie paid Mr. Gingrich a reported $1.6 million.
How forthright will Mr. Gingrich be about this now that he has surged to the front of the GOP pack? So far, not so good. At the Nov. 9 Republican debate, Mr. Gingrich claimed his job at Freddie was speaking truth to power: “I said to them at the time this is a bubble. This is insane.” But former Freddie officials told Bloomberg News they hired Mr. Gingrich in 2006-07 “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.” Indeed, Mr. Gingrich proclaimed, “I like the GSE model,” on Freddie’s Web site in 2007. He added that “making homeownership more accessible and affordable is a policy goal I believe conservatives should embrace.” He likened Freddie to the Homestead Act and suggested a health-care GSE.
No, this wasn’t lobbying, in the sense of buttonholing members of Congress. But that wouldn’t have been the most cost-effective use of Mr. Gingrich anyway. As a senior Republican and conservative ideas man, he was better suited to other aspects of “political risk management” — as the GSEs called their constant effort to co-opt Washington. In this case, Mr. Gingrich met Freddie’s need for a high-minded policy gloss on the pursuit of profit, which, as of the time Mr. Gingrich went on the payroll, had led Freddie, and Fannie Mae, too, deep into the risky subprime mortgage business.
In response to the Bloomberg story, Mr. Gingrich told radio host Laura Ingraham, “I was happy to give them advice on how to present government-sponsored enterprises as a model.” This version seems more consistent with the known facts than Mr. Gingrich’s comments at the debate; gone are the assertion that he was an in-house whistle-blower and the even unlikelier claim that Freddie was interested in his views as an historian. But it does put Mr. Gingrich in the position of arguing that he got paid to publicly promote a business that he privately considered “insane.”
To be sure, Mr. Gingrich’s paean to GSEs on the Freddie Mac Web site (first reported by the Verum Serum blog) includes this more qualified remark: “So while we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself.” A Gingrich spokesman told the Wall Street Journal that this shows that Mr. Gingrich favored better regulation, not none. But “fundamental” change was precisely what Freddie needed in 2007, and that was what Mr. Gingrich, for a fee, opposed — almost to the moment in July 2008 that Freddie and Fannie failed and went on the federal dole.
Today Mr. Gingrich promises to clean up the GSEs and the rest of Washington. To a small, but undeniable, extent, this is a promise to undo some of his own handiwork.