Why Did Newt Gingrich Take $1.5 Million from Freddie?
Republican presidential candidate Newt Gingrich finds himself in the spotlight today over huge payments he received from federally-backed housing agency Freddie Mac.
Gingrich said he didn’t remember exactly how much he was paid, but a former Freddie Mac official, who spoke on condition of anonymity, said it was at least $1.5 million for consulting contracts between 1999 and 2007.
Speaking to reporters in Iowa today, Gingrich said he provided “strategic advice for a long period of time” after he resigned from his position as House speaker following the 1998 elections.
Gingrich defended Freddie Mac, which has long been unpopular among Republicans, saying “every American should be interested in expanding housing opportunities.”
Just yesterday, a House committee voted to strip top executives at Freddie Mac and its larger competitor, Fannie Mae, of huge salaries and bonuses, instead putting them on the same pay scale as federal employees.Gingrich sought to portray his role with Freddie as a sign of his valuable experience, which he would take with him to the White House if elected.
“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.”
In 2008, Gingrich criticized then-presidential candidate Barack Obama for having accepted campaign contributions from Freddie mac and Fannie Mae, saying that he should have to return the money.
In 1999, Gingrich was hired by Freddie Mac’s top lobbyist, Mitchell Delk, as a strategic consultant, primarily on legislative and regulatory issues. That job, which lasted until some time in 2002, paid between $25,000 and $30,000 a month.
In 2006, Gingrich was again hired by Freddie Mac to provide strategic advice, this time on a two-year contract that paid him $300,000 annually. At the time, Freddie was fending off attacks from the right wing of the Republican Party.
For years, Republicans have opposed government involvement in the mortgage business, and have sought to scale back Freddie’s size and impose tough regulations.
Gingrich has described his role at Freddie Mac as that of a “historian” who bore witness to the company’s dire mistakes that ultimately led to the housing crisis. 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.”
Gingrich says, at the time, that he recognized that the housing market was entering bubble territory. “It turned out unfortunately I was right,” said Gingrich.
However, former Freddie Mac executives dispute Gingrich’s description of his role at the company, saying he was hired to identify political friends on Capitol Hill. Gingrich was supposed to use his clout with the Republican party to built intellectual support for the agency, according to four former Freddie employees, who spoke on condition of anonymity.