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Gingrich says he received Freddie Mac compensation

URBANDALE, Iowa (AP) - Rising in national polls, Republican
presidential candidate Newt Gingrich found himself on the defensive
Wednesday over huge payments he received over the past decade from
the federally backed housing agency Freddie Mac.
Gingrich said he didn't remember exactly how much he was paid,
but a former Freddie Mac official said it was at least $1.5 million
for consulting contracts stretching from 1999 to 2007. The official
spoke on condition of anonymity to discuss a personnel matter.
Speaking with reporters in Iowa, Gingrich said he provided
"strategic advice for a long period of time" after he resigned as
House speaker following his party's losses in the 1998 elections.
He defended Freddie Mac's role and said, "every American should be
interested in expanding housing opportunities." Long unpopular
among Republicans, the federally backed mortgage lender has become
a focal point of anti-government sentiment because of the housing
crisis.
On Tuesday, a House committee voted to strip top executives of
Freddie and its larger competitor, Fannie Mae, of huge salaries and
bonuses and put them on the same pay scale as federal employees.
In 2008, Gingrich suggested in a Fox News interview that
then-presidential candidate Barack Obama should have to return
campaign contributions he had received from executives of Freddie
Mac and Fannie Mae. He said that in a debate with Obama, GOP
presidential nominee John McCain "should have turned and said,
`Senator Obama, are you prepared to give back all the money that
Freddie Mac and Fannie Mae gave you?"'
Gingrich sought Wednesday to portray his role as a sign of
valuable experience.
"It reminds people that I know a great deal about Washington,"
Gingrich said Wednesday. "We just tried four years of amateur
ignorance and it didn't work very well. So, having someone who
actually knows Washington might be a really good thing."
Gingrich's history at Freddie Mac began in 1999, when he was
hired by the company's top lobbyist, Mitchell Delk. He was brought
in for strategic consulting, primarily on legislative and
regulatory issues, the company said at the time. That job, which
paid about $25,000 to $30,000 a month, lasted until sometime in
2002.
In 2006, Gingrich was hired again on a two-year contract that
paid him $300,000 annually, again to provide strategic advice while
the company fended off attacks from the right wing of the
Republican Party.
Freddie Mac and Fannie Mae for years had been under scrutiny
from Republicans on Capitol Hill who opposed government involvement
in the mortgage business and wanted to scale back the companies'
size and impose tough regulation.
In last Wednesday's Republican presidential debate, Gingrich
sought to explain his role at Freddie Mac as that of an
"historian" sounding dire warnings about the company's future. He
said Freddie Mac officials told him "we are now making loans to
people that have no credit history and have no record of paying
back anything, but that's what the government wants us to do." He
said his advice was to tell them, "this is insane."
"I said at the time, this is a bubble ... this is impossible.
It turned out unfortunately I was right," Gingrich said.
Former Freddie Mac executives dispute Gingrich's description of
his role.
Four people close to Freddie Mac say he was hired to strategize
with his employer about identifying political friends on Capitol
Hill who would help the company through a very difficult
legislative environment. All four people spoke on condition of
anonymity to be able to discuss the personnel matter freely.
Freddie Mac executives hoped that would speak positively about
the company and its business model as he circulated among
conservative groups and help to build intellectual support within
his party.
Freddie Mac executives were looking to Gingrich to offer up new,
inventive ways to think about old problems, the officials said, but
that didn't materialize.
Gingrich's hiring was a small - but because of his name,
important - piece of a much larger initiative by the company.
Freddie Mac and its larger competitor, Fannie Mae, are
government-sponsored enterprises, created by Congress to buy up
mortgages so that the housing industry has a ready flow of funds.
The two companies had long been the darlings of Democratic
politicians in Washington, hailed as the champions of affordable
housing, but they had few supporters on the political right.
Freddie Mac executive Hollis McLoughlin sought to remedy that by
hiring a stable of conservative consultants, including Gingrich.
Before Gingrich was hired, Freddie Mac paid $2 million to a
Republican consulting firm to kill legislation that would have
regulated and trimmed both companies.
The $2 million was money well spent. The legislation died
without ever coming to a vote on the Senate floor. But the danger
of regulation wasn't dead, so Freddie Mac hired more consultants,
Gingrich among them.
Internal Freddie Mac budget records show $11.7 million was paid
to 52 outside lobbyists and consultants in 2006, all of them former
Republican lawmakers and ex-GOP staffers. Besides Gingrich, the
hires included former Sen. Alfonse D'Amato of New York, former Rep.
Vin Weber of Minnesota and Susan Hirschmann, the former chief of
staff to ex-House Majority Leader Tom DeLay, R-Texas.
By September 2008, amid the collapse of the housing industry,
Freddie Mac and Fannie Mae were in disastrous financial condition,
were both taken over by the government and remain in
conservatorship.
---
Yost reported from Washington.

(Copyright 2011 by The Associated Press. All Rights Reserved.)


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