On housing, Donilon at center of regu...

On housing, Donilon at center of regulatory fight

There are 32 comments on the Buffalo News story from Oct 9, 2010, titled On housing, Donilon at center of regulatory fight. In it, Buffalo News reports that:

Before President Barack Obama picked him to be his next national security adviser, Tom Donilon was a lobbyist for mortgage giant Fannie Mae and fought off congressional attempts to impose new regulations.

Join the discussion below, or Read more at Buffalo News.

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Cranky Old Man

United States

#1 Oct 9, 2010
Obama gives Donilon another chance to screw up. A job as national security advisor of all things.

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#2 Oct 9, 2010
Jones was the only outsider and independent voice in the Obama nut house. He's gone.

Now we see another Financial Crisis root (Donilon) embedded in the WH.

This only gets worse.

Since: Jan 07

Bronx, NY

#3 Oct 9, 2010
In this administration, politics trumps all positives. With only half of his term left, Obama has to ramp up his agenda and the only way to do it is to plant as many operatives as he can in key positions.

Following the midterms, it is absolutely essential for Congress to assert itself and stop the march toward global governance, the attack on personal success and the emergence of the US as the largest welfare state in the history of the world.

Since: Mar 08

Location hidden

#4 Oct 9, 2010
you gotta luv obama!! promised no lobbyists will be on his staff and he picks donilon - a lobbyist for fannie!!- a reputation of meglomania and ineptitude!! exactly the kind of person we want steering the gov't!! can only mean that this w.h. intends to continue to bury us into oblivion!!

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#5 Oct 9, 2010
Obama Transition Member Oversaw Fannie's Lobbying

Appointment Raises Questions About New Adminsitration's Pledge to Change Washington

By EMMA SCHWARTZ and JUSTIN ROOD
November 17, 2008

One of Obama's top transition team members, Thomas Donilon, oversaw an aggressive, backdoor lobbying campaign by mortgage giant Fannie Mae to undermine the credibility of a probe into the firm's accounting irregularities, according to a 2006 government report on the company.

http://abcnews.go.com/Blotter/Politics/story...

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#6 Oct 9, 2010
The Donilon Lobbying effort -- which reportedly included attacks on the funding for the oversight agency, the Office of Federal Housing Enterprise Oversight, and an attempt to launch a separate investigation into OFHEO itself -- was ultimately unsuccessful, and regulators eventually discovered top Fannie Mae executives had been manipulating the company's financial reporting to maximize their bonuses.

Facing accusations of misstating its earnings from 1998 to 2004, Fannie Mae settled with the Securities and Exchange Commission for $400 million in 2006, although it did not admit any wrongdoing.

He oversaw its lobbying, and helped paint a rosy picture of Fannie's financial health to the company's board, OFHEO investigators concluded, a picture that was ultimately proven false.

Donilon declined to comment for this article.

http://abcnews.go.com/Blotter/Politics/story...

“Freedom Demands Responsibility”

Since: Aug 09

21st Century

#7 Oct 9, 2010
Woof, Obama the Genius! Now our very security is in the hands of one of the people that literally caused the housing bubble that burst. Where is Obama getting his marching orders? Obviously, George Soros.

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#8 Oct 9, 2010
Donilon was no rookie to politics.

A veteran of the Carter administration, he was a top strategist for both Walter Mondale and Joseph Biden's failed presidential bids.

Great! Another Failure!

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#9 Oct 9, 2010
Donilon the Lobbyist Crook

Fannie Mae's accounting came under scrutiny in late 2003, after its sister organization, Freddie Mac, disclosed it had misstated its accounting.

Seeing the problems, OFHEO stepped up its monitoring of Fannie Mae and in a preliminary report in 2004 alleged the company had improperly used reserves to smooth its earnings.

Fannie Mae executives began pushing back hard against the increasing oversight. Its lobbyists -- overseen by Donilon -- pushed U.S. lawmakers to limit OFHEO's budget, and make it subject to annual approval. "[W] ith the knowledge and support of senior management, " Fannie Mae's lobbyists "used their longstanding relationships with Congressional staff to attempt to interfere with OFHEO's special examination," according to the report.

They also tried to get OFHEO investigated. Email trails show that Fannie Mae lobbyists drafted legislation which required a probe into how the agency spent its money.

http://abcnews.go.com/Blotter/Politics/story...

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#10 Oct 9, 2010
Donilon isn't the only member of the Obama team who has worked for one of the government-backed housing enterprises.

Wendy Sherman, who is working with Donilon the State Department agency review team, served on the board of Fannie's charity.

And Rahm Emmanuel, who will be Obama's chief of staff, served on the board of Freddie Mac, which also restated its earnings.

http://abcnews.go.com/Blotter/Politics/story...

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#11 Oct 9, 2010
Former Fannie Mae Exec as White House Chief of Staff?

Published: Friday, 24 Sep 2010
By: Diana Olick
CNBC Real Estate Reporter

As White House watchers mull possible replacements for Chief of Staff Rahm Emmanuel, Deputy National Security Adviser Thomas Donilon appears to be on the short list.

Donilon was part of the Obama transition team and served in the Clinton and Carter administrations.

But one listing on his resume could cause President Obama and his vetting team a headache.

Donilon was also Executive Vice President for Law and Policy at Fannie Mae (2000-2005) during investigations into accounting irregularities at the mortgage giant and was accused of overseeing a lobbying campaign against those investigations in a scathing government report.

It all started back in the headier days of the housing market, just before the boom but just after Freddie Mac admitted to accounting errors in 2003; that's when Fannie and Freddie's overseer, the Office of Federal Housing Enterprise Oversight (OFHEO), which later became the Federal Housing Finance Agency (FHFA) began looking into Fannie Mae's accounting practices. An early report claimed Fannie was using reserves to improve its earnings.

A May 2006 "Report of the Special Examination of Fannie Mae" by OFHEO says Donilon oversaw a major lobbying campaign against the accounting probe by Fannie Mae. Donilon was not accused of participating in the accounting issues, which ultimately led to a $400 million settlement with the Securities and Exchange Commission in 2006 (Fannie Mae did not admit any improprieties). But according to the OFHEO report:

"Fannie Mae's Government and Industry Relations Department had a special relationship of cooperation and support with select Congressional staff. In the spring and again in the fall of 2004, Enterprise lobbyists, with the knowledge and support of senior management, used their longstanding relationships with Congressional staff to attempt to interfere with OFHEO's special examination."

The report is very long and full of instances that show lobbyists under Donilon's charge fought the OFHEO investigation and even tried to counter, pushing an investigation into OFHEO. The report also cites a 2003 email from then COO (and later CEO) Daniel Mudd to Donilon, exposing what OFHEO calls "efforts to generate interagency conflict":

I spoke to [a Treasury Department official], he had agreed to talk to [the SEC] on "what to do if OFHEO was not falling in line" already ([another Treasury official] had already bent his ear about OFHEO obstructionism)…promised me he'd check in to see where things were and would call [the SEC] when needed.

Donilon left Fannie Mae in 2005, before the release of the report and of course well before the conservatorship.

For those of you keeping track, from 2001 to 2003, Donilon received $1,889,821 in bonuses from Fannie Mae.

http://www.cnbc.com/id/39347682/Former_Fannie...

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#12 Oct 9, 2010
With reform of the two mortgage giants on the administration's front burner, I have to ask how someone who was a part of the old crooked guard at Fannie Mae becomes part of the new guard at the White House without a few raised eyebrows.

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#13 Oct 9, 2010
Anyone claiming Obama is not in the Back Pockets of Wall Street and Lobbyists will be getting a full glass of shut up juice from this Donilon Appointment.

Obama has to be the most corrupt SOB I've ever seen trying to get this crook embedded deeper.

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#14 Oct 9, 2010
Fannie Mae and the Vast Bipartisan Conspiracy

A partial list of villains below.

By Jack ShaferPosted
Tuesday, Sept. 16, 2008,

The blowup and bailout of Fannie Mae and Freddie Mac by taxpayers was foretold so many times in the last three decades by critics of the two federally chartered and subsidized mortgage giants that not even the data-searching powers of Nexis, Factiva, and Google combined can total them.

The Wall Street Journal editorial page deserves a special commendation for hammering these two outposts of corporate socialism, not that the page's many warnings over the years helped avert disaster. Mae and Mac—especially Mae—were just too nurtured by the Washington establishment for any mere pressman to dislodge them from the government's teat.

In 1997, the New York Times' Richard W. Stevenson pinpointed Fannie Mae's strength when he wrote of the firm's "influential network that extends from the highest reaches of the Clinton Administration to the ranks of conservative Republicans on Capitol Hill."

the Washington Post ably described this week as:

The nearest thing to a license to print money. The companies borrowed money at below-market interest rates based on the perception that the government guaranteed repayment, and then they used the money to buy mortgages that paid market interest rates.

The key to Fannie Mae's survival was the patronage operation it ran. As Wall Street Journal reporter James R. Hagerty wrote two summers ago, "For years, high-level jobs at Fannie Mae were lucrative prizes for lawyers, bankers and political operatives waiting for their next U.S. government post." Now that the jig is up, let's meet some of the bipartisan warriors who fought for Fannie Mae's right to plunder.

1- At the top of the list we must place Franklin D. Raines, chairman and chief executive officer of Fannie Mae from 1998 to 2004.

2- Next up is Jamie S. Gorelick, whose official résumé describes her as "one of the longest serving Deputy Attorneys General of the United States," a position she held during the Clinton administration. Although Gorelick had no background in finance, she joined Fannie Mae in 1997 as vice chair and departed in 2003. For her trouble, Gorelick collected a staggering $26.4 million in total compensation, including bonuses.

3- Republicans also proved willing to serve Fannie Mae. Robert B. Zoellick, current head of the World Bank, has served President Reagan, President Bush 1, and President Bush 2 as a trade representative, deputy secretary of state, deputy secretary of the treasury, deputy chief of staff, and so on.

4- John Buckley worked at Fannie Mae for almost 10 years (1991-2001) but took a leave of absence to serve as Bob Dole's communications director during his 1996 run for the presidency.

5- Moving back across the aisle, let's say hello to Mr. Democrat James A. Johnson, who ran Fannie Mae from 1991 to 1998, served as vice chairman from 1990 to 1991, and earlier worked as a managing director at Lehman Bros. and for Vice President Walter F. Mondale.

6- Moving down the Democratic Party food chain, we meet William M. Daley, son of former Chicago Mayor Richard J. Daley and brother of current Chicago Mayor Richard M. Daley. Daley worked as special counsel to President Clinton and chairman of Al Gore's 2000 presidential campaign. He also served as a Clinton secretary of commerce from 1997 to 2000, and earlier as president of Amalgamated Bank in Chicago. He is now an executive at JPMorgan Chase & Co. Daley was appointed to the Fannie Mae board in 1993 by President Clinton.

7- As part of the "leave no Democrat behind" campaign, Johnson's Fannie Mae hired Walter Hubbell, son of Webster L. Hubbell, in 1994.

http://www.slate.com/id/2200160/

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#15 Oct 9, 2010
But Fannie Mae is nothing if not ecumenical.

According to the Associated Press, Fannie Mae and Freddie Mac have spent $170 million on lobbying in the past decade.

"Fannie Mae's 51-member lobbying stable" includes "former Reps. Tom Downey, D-N.Y., and Ray McGrath, R-N.Y.; Steve Elmendorf, a Democratic political strategist and former congressional aide; and Donald Fierce, a longtime GOP operative. Freddie Mac's list of 91 lobbyists includes former Reps. Vin Weber, R-Minn., and Susan Molinari, R-N.Y." The AP notes the Fannie Mae ties enjoyed by McCain campaign manager Rick Davis and Arthur B. Culvahouse Jr., who helped in McCain's veep search. According to Politico, McCain economic adviser Aquiles Suarez worked as Fannie Mae's director of government and industry relations, and McCain finance co-chairman Frederic V. Malek spent time on the Freddie Mac board.

http://www.slate.com/id/2200160/

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#16 Oct 9, 2010
A totally brilliant and prescient Washingtonian article from 2002 by Ross Guberman harvests a bunch of politicos who benefited from and supported Fannie Mae.

Arne Christenson, a former Newt Gingrich aide, was senior vice president for regulatory policy.

Tom Donilon was Fannie Mae's executive vice president for law and policy and secretary to the board of directors until 2005. He worked in the Clinton State Department and as part of the 1992 Clinton-Gore transition.

William Maloni worked for Rep. William S. Moorhead, D-Penn., the Federal Home Loan Bank Board, and the Federal Reserve before joining Fannie Mae, where he worked in government relations for more than 20 years.* Of Fannie Mae's board of directors, Guberman writes that it is "political by design."

The company's charter gives the President the right to appoint five of the board's 18 members. The idea was to ensure that Fannie fulfilled its public mission. Today the five appointees, considered big winners in the capital's game of spoils, promote the interests of Fannie's shareholders.

Recent directors include Ann McLaughlin Korologos, Ronald Reagan's Labor secretary; Ken Duberstein, Reagan's chief of staff;

Bill Daley, former Commerce Secretary and Gore spokesman during the 2000 election controversy; and Jack Quinn, counsel to Bill Clinton and lawyer to pardoned fugitive Mark Rich.[Emphasis added.]

http://www.slate.com/id/2200160/

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#17 Oct 9, 2010
Obama is trying to dig this Financial Crisis hole even deeper. It's unbelievable.

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#18 Oct 9, 2010
Fannie Mae Before the Meltdown: The View from August 2002

Six years ago, a Washingtonian story issued an early warning about Fannie Mae.

Published Tuesday, July 15, 2008

A creature of Franklin Roosevelt's New Deal, Fannie Mae was born as the Federal National Mortgage Association. In an era of unemployment and foreclosures, FDR's brainchild provided local banks and thrifts with money needed to finance home mortgages. Almost 70 years later, Fannie Mae is one of the world's biggest financial-service companies. Eight trillion dollars pass through its coffers yearly.

In 1968, Lyndon Johnson, looking to spin the agency off the government's budget, converted it into a public-private hybrid called a "government-sponsored enterprise." Today Fannie Mae operates under a congressional charter but also generates profits for outsiders who hold more than $70 billion of its stock. In the past two years, as investments in high-tech and many other sectors of the economy have plummeted, Fannie's stock has gone from $50 a share to more than $70. Its earnings are expected to go from about $6.15 a share this year to almost $7 next year.

Fannie Mae's sole competitor, Freddie Mac, was created in 1970 so Fannie Mae wouldn't monopolize mortgage buying. In practice, they march in lockstep on Wall Street and Capitol Hill. Freddie has remained smaller and quieter, and its stock also has performed well. Since mid-2000, the share price has increased from $40 to more than $60, giving Freddie a market capitalization of about $40 billion.

At Fannie Mae's helm is another FDR--Franklin Delano Raines. A Harvard-educated Rhodes Scholar, a Bill Clinton budget chief, and the first African-American chief executive of a Fortune 500 company, Raines was considered a possible running mate for Al Gore in 2000.

http://www.washingtonian.com/articles/people/...

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#19 Oct 9, 2010
More - Fannie Mae Before the Meltdown: The View from August 2002

Peter Wallison, former counsel to the Treasury and a resident fellow at the conservative American Enterprise Institute, says it's impossible for the company both to maximize profits and to fulfill its public mission. Raines denies that the two tracks are incompatible, but he faces pressure from the competing constituencies.

Fannie's executives claim that outsiders focus on the company's "political story" more often than on its business. But Fannie Mae devotes so much effort to stifling dissent and preserving the status quo that it can be hard to know which is which.

At Raines's disposal is the most formidable team of Washington heavyweights that corporate America has ever seen.

"It's all a matter of know-who, not know-how," complains Ralph Nader about Fannie's higher ranks. "They've perfected all the techniques of lobbying and pay massive salaries for Rolodex hiring to ensure against any change." Nader's favorite example: Fannie Mae vice chair Jamie Gorelick, a well-connected Washington lawyer who earned almost $1 million in her first eight months on the job after serving as counsel to the Defense Department and deputy to former attorney general Janet Reno.

Besides Gorelick, Raines, and former Gingrich aide Arne Christenson, other politicos have cashed in at Fannie's executive suites. Running political campaigns is invaluable: Raines's predecessor Jim Johnson ran Walter Mondale's 1984 campaign after decades as a Democratic kingpin.

Coaching debates is worth something, too: Executive vice president Tom Donilon prepared Michael Dukakis and Bill Clinton for their campaign face-offs, and former general counsel Robert Zoellick prepped George W. Bush for his.

http://www.washingtonian.com/articles/people/...

“President DOWNGRADE..Ha Ha Ha!”

Since: Sep 09

Apopka, FL

#20 Oct 9, 2010
Screwing the Public

These politically charged executives, directors, and lobbyists glide into campaign mode whenever Fannie's status is threatened.

After the Wall Street Journal criticized the company last spring, Fannie called the editorials a "smear job" and orchestrated protest calls. Top executives Arne Christenson and Chuck Greener--who knew editorial-page editor Paul Gigot from conservative circles--traveled to Manhattan to mend fences.

"After sending around all these nasty letters and launching these incredible missiles, they tried to jolly us, Republican to Republican," says Susan Lee, who wrote the Wall Street Journal editorials.

Christenson started the meeting by passing around old photos of Gigot and himself practicing tricks on the basketball court. The charm offensive didn't work. In June, the Journal's board argued that taking on Fannie and Freddie would be President Bush's biggest challenge after toppling Saddam Hussein.

A St. Petersburg Times study found that the foundation's grant-giving favors groups affiliated with Fannie's executives or in the districts of powerful politicians. Fannie denies that the foundation is a lobbying arm.

"Fannie Mae is a bit like the tobacco industry," Charles Lewis says. "They use the foundation to try to put a happy face on what they do. The whole thing is part of a perpetual boondoggle so they maximize public risk and private gain."

http://www.washingtonian.com/articles/people/...

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