Bruce: [1]
As Ed Morrissey [2] points out, 2005 would be the year John McCain made this speech:
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac-known as Government-sponsored entities or GSEs-and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
…
And, as I’ve cited twice, in 2003, two years earlier than the McCain speech, we have the Bush Administration pushing for reform and the Democrats saying the problems are an “exaggeration” and that there is no problem with Freddie and Fanny.
So the next time your hear Obama claim he doesn’t take money from lobbyists, you know what to say (and cite). And the next time you hear Obama try to lay this exclusively at the feet of Republicans, you can pretty much point to the same information to refute that obvious bit of nonsense.
…
I know I keep going over this and stressing it, but this is important. It points to some major league dissembling on the part of the Democrats as they try to frame this as exclusively a Republican and administration failure when it fact, the blame lays mostly at their feet.
I quote as much of this as I do because this is, as Billy sometimes says “Life and Death Vital” to understand, going into this thing. And of course because Bruce and I are in full agreement here. I’ve laid all of this out for you yesterday [3]. What I’ve seen since only confirms my read; It is the Democrats and their misuse of government that caused this meltdown. Turning it over to them to solve isn’t the answer, folks.