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View Full Version : Economics More 'Change': Rahm Emanuel and Freddie Mac


trndobrd
03-27-2009, 01:10 PM
Rahm Emanuel's profitable stint at mortgage giant

Short Freddie Mac stay made him at least $320,000

By Bob Secter and Andrew Zajac | Tribune reporters


Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.

One of those allegedly asleep-at-the-switch board members was Chicago's Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.

As gatekeeper to Obama, Emanuel now plays a critical role in addressing the nation's mortgage woes and fulfilling the administration's pledge to impose responsibility on the financial world.

Emanuel's Freddie Mac involvement has been a prominent point on his political résumé, and his healthy payday from the firm has been no secret either. What is less known, however, is how little he apparently did for his money and how he benefited from the kind of cozy ties between Washington and Wall Street that have fueled the nation's current economic mess.

Though just 49, Emanuel is a veteran Democratic strategist and fundraiser who served three terms in the U.S. House after helping elect Mayor Richard Daley and former President Bill Clinton. The Freddie Mac money was a small piece of the $16 million he made in a three-year interlude as an investment banker a decade ago.

In business as in politics, Emanuel has cultivated an aggressive, take-charge reputation that made him rich and propelled his rise to the front of the national stage. But buried deep in corporate and government documents on the Freddie Mac scandal is a little-known and very different story involving Emanuel.

He was named to the Freddie Mac board in February 2000 by Clinton, whom Emanuel had served as White House political director and vocal defender during the Whitewater and Monica Lewinsky scandals.

The board met no more than six times a year. Unlike most fellow directors, Emanuel was not assigned to any of the board's working committees, according to company proxy statements. Immediately upon joining the board, Emanuel and other new directors qualified for $380,000 in stock and options plus a $20,000 annual fee, records indicate.

On Emanuel's watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass.

The accounting scandal wasn't the only one that brewed during Emanuel's tenure.

During his brief time on the board, the company hatched a plan to enhance its political muscle. That scheme, also reviewed by the board, led to a record $3.8 million fine from the Federal Election Commission for illegally using corporate resources to host fundraisers for politicians. Emanuel was the beneficiary of one of those parties after he left the board and ran in 2002 for a seat in Congress from the North Side of Chicago.

The board was throttled for its acquiescence to the accounting manipulation in a 2003 report by Armando Falcon Jr., head of a federal oversight agency for Freddie Mac. The scandal forced Freddie Mac to restate $5 billion in earnings and pay $585 million in fines and legal settlements. It also foreshadowed even harder times at the firm.

Many of those same risky investment practices tied to the accounting scandal eventually brought the firm to the brink of insolvency and led to its seizure last year by the Bush administration, which pledged to inject up to $100 billion in new capital to keep the firm afloat. The Obama administration has doubled that commitment.


read the rest of the story here

http://www.chicagotribune.com/news/politics/obama/chi-rahm-emanuel-profit-26-mar26,0,5682373.story

bkkcoh
03-27-2009, 01:17 PM
It would be nice to know how much he was able to get in contributions from Freddie Mac.

Taco John
03-27-2009, 01:17 PM
Very Cheney-esque...

patteeu
03-27-2009, 01:34 PM
Very Cheney-esque...

Not really.

trndobrd
03-27-2009, 01:35 PM
It would be nice to know how much he was able to get in contributions from Freddie Mac.

From the same article:

"Federal campaign records show that Emanuel received $25,000 from donors with ties to Freddie Mac in the 2002 campaign cycle, more than twice the amount collected that election by any other candidate for the U.S. House or Senate."


From www.opensecrets.org
Top Recipients of Fannie Mae and Freddie Mac
Campaign Contributions, 1989-2008 (Legislative, not Presidential)

1. Dodd, Christopher J
S D-CT
$133,900

2. Kerry, John
S D-MA
$111,000

3. Obama, Barack
S D-IL
$105,849

4. Clinton, Hillary
S D-NY
$75,550

5. Kanjorski, Paul E
H D-PA
$65,500

Jenson71
03-27-2009, 01:38 PM
socialists - they want to destroy private property and business.

petegz28
03-27-2009, 01:48 PM
socialists - they want to destroy private property and business.

More like Oligarchy. Or Plutocracy...though it seems they have beceom one in the same.

Chief Henry
03-27-2009, 02:43 PM
socialists - they want to destroy private property and business.

STFU


Franklyn Raines received 90 Million $$$ for 6 years of work at Fannie Mae.

His monthly pension is now $110,000 Per :cuss: MONTH.

petegz28
03-27-2009, 02:46 PM
STFU


Franklyn Raines received 90 Million $$$ for 6 years of work at Fannie Mae.

His monthly pension is now $110,000 Per :cuss: MONTH.

6 years of work and he gets a lifetime pension.....we work our asses off and all we get to do is contribute to a 401k. :grr:

Chief Henry
03-27-2009, 02:55 PM
6 years of work and he gets a lifetime pension.....we work our asses off and all we get to do is contribute to a 401k. :grr:

Chris Dodd and Barney Frank were getting Blow jobs from the guy....OK maybe only Barney was getting the BJ.

BucEyedPea
03-27-2009, 07:09 PM
socialists - they want to destroy private property and business.

:clap: You're coming along nicely, kiddo!

wild1
03-27-2009, 07:19 PM
Freddie and/or Fannie are due to pay out some big bonuses soon I have heard.

Say did they make Franklin Raines give back all the millions in bonuses he made while running Fannie into the ground?

Chief Henry
03-28-2009, 08:03 AM
Freddie and/or Fannie are due to pay out some big bonuses soon I have heard.

Say did they make Franklin Raines give back all the millions in bonuses he made while running Fannie into the ground?




What do you think :rolleyes:

KILLER_CLOWN
03-28-2009, 04:43 PM
6 years of work and he gets a lifetime pension.....we work our asses off and all we get to do is contribute to a 401k. :grr:

You forgot the part about us losing our pension later as well.

BucEyedPea
03-28-2009, 04:59 PM
Freddie and/or Fannie are due to pay out some big bonuses soon I have heard.

Say did they make Franklin Raines give back all the millions in bonuses he made while running Fannie into the ground?

Don't you know you can't say what you heard in a conversation....you have to quote someone official. This board is now academia.

banyon
03-28-2009, 05:03 PM
Don't you know you can't say what you heard in a conversation....you have to quote someone official. This board is now academia.

Yeah, don't you know you can't question anyone's opinion on this forum? It doesn't matter how crazy or outlandish or contrary to the vast weight of evidence against the claim, it has to be given equal merit and consideration and can't be questioned.

Ironically a pretty "big c" egalitarian communist attitude about discourse for someone who rails so angrily about the perils of socialism.

KC native
03-28-2009, 05:03 PM
Don't you know you can't say what you heard in a conversation....you have to quote someone official. This board is now academia.

No, it's called proving your argument. Something you fail spectacularly at.

patteeu
03-28-2009, 05:06 PM
You forgot the part about us losing our pension later as well.

And by the time any of us are ready to withdraw our retirement funds from our Roth IRAs, they'll have reneged on the promise not to tax the growth.

BucEyedPea
03-28-2009, 05:10 PM
And by the time any of us are ready to withdraw our retirement funds from our Roth IRAs, they'll have reneged on the promise not to tax the growth.

But...but...it's for the common good. The left is providing for us all by having the govt expanding what it takes from us. The collective rules.