Emanuel Was Director of Freddie Mac During Scandal...

November 7, 2008

President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com.

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having "failed in its duty to follow up on matters brought to its attention."

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for "13 months-a relatively short period of time."

The spokesperson said that while on the board, Emanuel "believed that Freddie Mac needed to address concerns raised by Congressional critics."

Freddie Mac agreed to pay a $50 million penalty in 2007 to settle the SEC complaint and four top executives of the Federal Home Loan Mortgage Corporation were charged with negligent conduct and, like the company, agreed to settle the case without admitting or denying the allegations.

The actions by Freddie Mac are cited by some economists as the beginning of the country's economic meltdown.

The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds.

Freddie Mac records have been subpoenaed by the Justice Department as part of its investigation of the suspect accounting procedures.

Emanuel was named to the Freddie Mac board by President Bill Clinton in 2000 and resigned his position when he ran for Congress in May, 2001.

Freddie Mac Misrepresented Income, Says SEC

During the years 2000, 2001 and 2002, according to the SEC, Freddie Mac substantially misrepresented its income to "present investors with the image of a company that would continue to generate predictable and growing earnings."

The role of the 18-member board of directors, including Emanuel, was not addressed in the SEC's public action but was heavily criticized by the oversight group (OFHEO) in 2003.

The oversight report said the board had been apprised of the suspect accounting tactics but "failed to make reasonable inquiries of management."

The report also said board members appointed by the President, such as Emanuel, serve terms that are far too short "for them to play a meaningful role on the Board."

As a Congressman, Emanuel recused himself from any votes dealing with Freddie Mac until just this year.

In dealing with the nation's economic crisis, the new White House chief of staff will almost certainly be involved in discussions about the house and mortgage markets.

Emanuel's spokesperson said, "As White House chief of staff he will work with President-elect Obama and his economic advisers to help ensure we protect taxpayers and homeowners."

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Part of article on AIG and what they are really doing - pretty interesting.....for full excerpt goto: http://www.truthout.org/031809R

Former US Treasury Secretary Henry Paulson (pictured), then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein and Fed Chairman Ben Bernanke made the initial decision to bail out AIG. (Photo: Elizabeth Dalziel / AP)

It's not the bonuses. It's that AIG's counterparties are getting paid back in full.

Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?

For the answer to this question, we need to go back to the very first decision to bail out AIG, made, we are told, by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke last fall. Post-Lehman's collapse, they feared a systemic failure could be triggered by AIG's inability to pay the counterparties to all the sophisticated instruments AIG had sold. And who were AIG's trading partners? No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes. So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.

SURPRISE! huh? http://www.truthout.org/031809R

Over the weekend, John McCain's top adviser announced their plan to stop engaging in a debate over the economy and "turn the page" to more direct, personal attacks on Barack Obama.

In the middle of the worst economic crisis since the Great Depression, they want to change the subject from the central question of this election. Perhaps because the policies McCain supported these past eight years and wants to continue are pretty hard to defend.

But it's not just McCain's role in the current crisis that they're avoiding. The backward economic philosophy and culture of corruption that helped create the current crisis are looking more and more like the other major financial crisis of our time.

During the savings and loan crisis of the late ྌs and early ྖs, McCain's political favors and aggressive support for deregulation put him at the center of the fall of Lincoln Savings and Loan, one of the largest in the country. More than 23,000 investors lost their savings. Overall, the savings and loan crisis required the federal government to bail out the savings of hundreds of thousands of families and ultimately cost American taxpayers $124 billion.

Sound familiar?

In that crisis, John McCain and his political patron, Charles Keating, played central roles that ultimately landed Keating in jail for fraud and McCain in front of the Senate Ethics Committee. The McCain campaign has tried to avoid talking about the scandal, but with so many parallels to the current crisis, McCain's Keating history is relevant and voters deserve to know the facts -- and see for themselves the pattern of poor judgment by John McCain.

The point of the film and the web site is that John McCain still hasn't learned his lesson.

And this time, McCain's bankrupt economic philosophy has put our economy at the brink of collapse and put millions of Americans at risk of losing their homes.

Watch the video to see why John McCain's failed philosophy and poor judgment is a recipe for deepening the crisis:

http://my.barackobama.com/keatingvideo

It's no wonder John McCain would rather spend the last month of this election smearing Barack's character instead of talking about the top priority issue for voters.

It's long (13 minutes) but information every voter should know.

WASHINGTON � Director Leon Panetta says agency records show CIA officers briefed lawmakers truthfully in 2002 on methods of interrogating terrorism suspects, but it is up to Congress to reach its own conclusions about what happened.

Panetta's message to agency employees came one day after Speaker Pelosi said bluntly the CIA had misled her and other lawmakers about the use of waterboarding and other harsh techniques seven years ago.

Panetta wrote that the political debates about interrogation "reached a new decibel level" with the charges.

He urged agency employees to "ignore the noise and stay focused on your mission."

http://www.huffingtonpost.com/2009/05/15/cia-director-panetta-reco_n_204005.html

House Speaker Nancy Pelosi on Thursday accused the CIA of misleading Congress about its use of enhanced interrogation techniques on terror detainees.

"Yes I am saying the CIA was misleading the Congress, and at the same time the (Bush) administration was misleading the Congress on weapons of mass destruction in Iraq, to which I said that this intelligence doesn't support the imminent threat," Pelosi said at her weekly news conference.

"Every step of the way the administration was misleading the Congress and that is the issue and that's why we need a truth commission," she said.

Under a barrage of questioning, Pelosi adamantly insisted that she was not aware that waterboarding or other enhanced interrogation techniques were being used on terrorism suspects.

"I am telling you they told me they approved these and said they wanted to use them but said they were not using waterboarding," she said.

Growing increasingly frustrated throughout the briefing, Pelosi slowly started backing away from the podium as she tried to end the questioning.

As she backed out, she continued to accuse the CIA of not telling Congress that dissenting opinions had been filed within the administration suggesting the methods were not lawful.

The CIA immediately disputed Pelosi's accusation, saying the documents describing the particular enhanced interrogation techniques that had been employed are accurate. CIA spokesman George Little noted that CIA Director Leon Panetta made available to the House Intelligence Committee memos from individuals who led the briefings with House members.

"The language in the chart -- 'a description of the particular EITs that had been employed' -- is true to the language in the agency's records," Little said. "The chart I'm referring to is, of course, the list of member briefings on enhanced interrogation techniques."

"It's hard for me to imagine anyone in our intelligence area would ever mislead a member of Congress," House Minority Leader John Boehner, R-Ohio, said at his weekly news conference. "They come to the Hill to brief us because they're required to under the law. I don't know what motivation they would have to mislead anyone."

The top Republican on the Senate Intelligence Committee, Sen. Kit Bond, R-Mo., told FOX News that Pelosi's accusation against the CIA is "not credible."

"I am afraid she has disremembered what she went through," he said. "We have had not only the records from the CIA but the contemporaries who were there with her had other views on it, so I am afraid that this is not a credible explanation."

Pelosi said she was briefed only once on the interrogation methods in September 2002. She acknowledged that her intelligence aide, Michael Sheehy, informed her about another briefing five months later in which Bush officials said waterboarding was being used on CIA terror detainee Abu Zubaydah.

Pelosi said she supported a letter drafted by Rep. Jane Harman, D-Calif., the ranking Democrat on the House Intelligence Committee who also attended the briefing in February 2003, and sent to the Bush administration, raising concerns over the technique.

Pelosi's account has changed several times in recent weeks as she has sought to clarify what she did or didn't know about the interrogation methods that she is pushing to investigate.

Pelosi said last month that she was never told that the controversial interrogation methods were being used. But a national intelligence report later showed that she was briefed seven years ago on the tactics while she was on the House Intelligence Committee.

Her spokesman then said the speaker thought the techniques were legal and that waterboarding was not used.

Democrats will hold a series of hearings on Justice Department memos released last month that justified rough tactics against detainees, including waterboarding and sleep deprivation.

While Democrats want the hearings to focus on what they call torture, Republicans have tried to turn the issue to their advantage by complaining that Pelosi and other Democrats knew of the tactics but didn't protest.

http://www.foxnews.com/politics/2009/05/14/pelosi-reiterates-didnt-know-waterboarding-use/

Source to Stephanopoulos: President Bush Directly Involved In Leak Scandal

Near the end of a round table discussion on ABC�s This Week, George Stephanopoulos dropped this bomb:

Definitely a political problem but I wonder, George Will, do you think it�s a manageable one for the White House especially if we don�t know whether Fitzgerald is going to write a report or have indictments but if he is able to show as a source close to this told me this week, that President Bush and Vice President Cheney were actually involved in some of these discussions.

This would explain why Bush http://www.salon.com/opinion/feature/2005/08/17/bush_plame/index1.html>spent more than an hour answering questions from special prosecutor Patrick Fitzgerald. It would also fundamentally change the dynamics of the scandal. President Bush could no longer claim he was merely a bystander who wants to �get to the bottom of it.� As Stephanopoulos notes, if Bush played a direct role it could make this scandal completely unmanageable.

Dyncorp and Halliburton Sex Slave Scandal Won't Go Away
Halliburton, Dyncorp lobbyists stall law banning human trafficking and sex slavery

Almost a year after Representative Cynthia McKinney was told by Donald Rumsfeld that it was not the policy of the Bush administration to reward companies that engage in human trafficking with government contracts, the scandal continues to sweep up innocent children who are sold into a life of slavery at the behest of Halliburton subsidiaries , Dyncorp and other transnational corporations with close ties to the establishment elite.

On March 11th 2005, McKinney grilled Secretary Rumsfeld and General Myers on the Dyncorp scandal.

Mr. Secretary, I watched President Bush deliver a moving speech at the United Nations in September 2003, in which he mentioned the crisis of the sex trade. The President called for the punishment of those involved in this horrible business. But at the very moment of that speech, DynCorp was exposed for having been involved in the buying and selling of young women and children. While all of this was going on, DynCorp kept the Pentagon contract to administer the smallpox and anthrax vaccines, and is now working on a plague vaccine through the Joint Vaccine Acquisition Program. Mr. Secretary, is it [the] policy of the U.S. Government to reward companies that traffic in women and little girls?

Rumsfeld: Thank you, Representative. First, the answer to your first question is, is, no, absolutely not, the policy of the United States Government is clear, unambiguous, and opposed to the activities that you described. The second question.

McKinney: Well how do you explain the fact that DynCorp and its successor companies have received and continue to receive government contracts?

Rumsfeld: I would have to go and find the facts, but there are laws and rules and regulations with respect to government contracts, and there are times that corporations do things they should not do, in which case they tend to be suspended for some period; there are times then that the - under the laws and the rules and regulations for the - passed by the Congress and implemented by the Executive branch - that corporations can get off of - out of the penalty box if you will, and be permitted to engage in contracts with the government. They're generally not barred in perpetuity.

Rumsfeld: I'm advised by DR. Chu that it was not the corporation that was engaged in the activities you characterized but I'm told it was an employee of the corporation, and it was some years ago in the Balkans that that took place.

Rumsfeld's effort to shift the blame away from the hierarchy at Dyncorp and onto the Dyncorp employees was a blatant attempt to hide the fact that human trafficking and sex slavery is a practice condoned by companies like Dyncorp and Halliburton subsidiaries like KBR.

What else are we to assume in light of recent revelations cited in the Chicago Tribune that Halliburton subsidiary KBR and Dyncorp lobbyists are working in tandem with the Pentagon to stall legislation that would specifically ban trafficking in humans for forced labor and prostitution by U.S. contractors?

Three years has now elapsed since President Bush's promise to bring an end to this disgrace and the Pentagon is still yet to actually bar the practice.

And the employees themselves that are burned for blowing the whistle, like Kathryn Bolkovac who was sacked for reporting on Dyncorp officials who were involved in the Bosnian sex trade.

Illinois Governor Rod Blagojevich is one of very few representatives in high office aside from Cynthia McKinney to demand answers on this issue.

We applaud Blagojevich's eforts. The iron curtain of official denial and soft-peddling is falling down.

What has happened to the children who were sold into slavery and forced to satisfy the demands of sick pedophiles working on behalf of the US government?

Where were the investigations and convictions in other cases of establishment orchestrated child slavery and prostitution? Like the NATO officials responsible for the mushrooming of child prostitution in Kosovo?

In addition, we received an E mail from a person claiming to be a Dyncorp employee stating that a high level Dyncorp official is breaking the law by accepting payment from the US government and in turn the American taxpayer by falsifying timesheets and claiming pay for hours not worked.

The contact states that this was repeatedly brought to the attention of DynCorp program managers by Dyncorp employees but they were told it was none of their business.

It is important to stress that at the moment these are allegations and we have no proof of this other than the validity of the e mail.

The e mail is a reminder that we should always consider the fact that the vast majority of Dyncorp employees are just doing their jobs and have nothing to do with this scandal. It is a small faction at the head of the hydra that have authorized and engaged in these horrors.

We have a government that says it doesn't advocate torture and yet tries to block a law that would end torture. We have a government that repeatedly burns lower level minions to wash its hands of every major scandal that encompasses policies directly administered by the government itself, as in the case of Abu Ghraib and the Dyncorp sex scandal.

A government that covers-up for those who force children into prostitution and slavery is a clear danger to our very way of life.

We must demand answers and finally put an end to a process that exploits and wreaks terror on the lives of the most innocent and vulnerable members of society, whether they be in the Balkans, East Timor or here at home.

Freddie found itself in Justice Department crosshairs in 2003, after it finally admitted to years of accounting schemes to underreport its earnings...to the tune of $5 billion. Freddie paid a $125 million fine to federal regulators, more than $400 million in shareholder lawsuit settlements, and $3.8 million in civil fines to settle Federal Election Commission charges of improper political fundraising.

Freddie's creative accounting was nothing compared to Fannie's. As determined by two separate federal reports in 2004 and 2006, Fannie Mae out-and-out cooked the books so the bigwigs at the top could rake in millions in windfall profits. The Washington Post reports that Fannie misstated its earnings by about $10.6 billion from 1998 through 2004. all so fraudulent multimillion dollar bonuses could kick in for Fannhie's bigwigs.

Those Fannie Mae bigwigs who cashed in on the cooked books? Chairman Franklin Raines, Bill Clinton's OMB director...A whopping $52 million. Vice Chair Jamie Gorelick (remember her from the 9-11 Commission hearings), Clinton's deputy ATTORNEY GENERAL, $15 million. Chairman and Chief Executive James A. Johnson, liberal lobbyist (the one who was kicked off Obama's VP vetting committee...looks like they should have vetted their committee) due to his role in the Countrywide financial scandal...$1.9 million. Raines and the CFO of Fannie Mae were ousted.

Dems, loathe to clean up Fannie and Freddie houses even though Greenspan said preventitive action needed to be taken "sooner than later," came up with a "reform bill" in early 2005. The Department of Housing and Urban Development (HUD) mandated that Fannie and Freddie had to start handing out mortgages to "minority and moderate income buyers." Whether these new customers were creditworthywas of little concern; Congress had race and bean-counting to achieve. And now they basically owned half of the US housing market.

And incidentally, Franklin Raines has been advising the Obama campaign on the mortgage and housing issues....ahem.

Maybe the international community wants their money back now. Maybe that is why credit markets are frozen. Since AIG and Fannie and Freddie are backed by the full faith and credit of the United States, the world is lining up for their securitized mortgages to be repaid.

Maybe this bailout is not to buy up bad debt, but to pay off bad debt the government has already bought, insured, and now needs to ask us money for to pay. WE ARE BEING LIED TO AGAIN!

What happened to Col. Powell maybe being Chief of Staff for Obama? Anyway, I am not too thrilled about Emanuel being chief of staff. From what I have been reading, he is the son of a Zionist, Israeli terrorist. Also might be related to 911.

In 2006 an election year, the Democrats were still trying to lay the Enron scandal on Bush and the Republicans. With the help of the press a cover up of a larger financial scandal was taking place. A scandal that we are paying for today. In 2006 a 3 year investigation into fraud at Fannie Mae was concluded. It revealed a level of financial misconduct by Franklin Raines, Jamie Gorelick, and others that grossly overstated earnings by 10.6 Billion dollars. To gain bonuses.

For those who don't know both Raines and Gorelick were high ranking officials in the Clinton Administration.

I hope you haven�t just eaten, because what you are about to read will disturb you�and well it should. It�s proof that John McCain foresaw the Freddie Mac, Fannie Mae disaster in 2006� and tried against all Obama-Like minds to ward it off.

Below are John McCain�s remarks urging the passage of the Federal Housing Enterprise Regulatory Reform Act of 2005, which he co-sponsored and which was rendered �Dead� in Congress.

Guess who prevailed and didn�t take heed? Or more appropriately, guess who deliberately �looked the other way�?

This is all we need to know to understand exactly WHICH candidate in this election is willing to break some eggs when it comes to Fannie Mae and Freddie Mac�two organizations that, with the help of certain Democrats, deliberately redistributed wealth the easy way. Now we are all paying for it, as intended all along. Just as John McCain warned below.

As we view the carnage, this is all we need to know to understand exactly WHICH candidate foresaw this carnage we are witnessing, and which candidate worked to convince the other candidate to help avoid it. It is all we need to know to recognize exactly WHICH candidate had the right judgment and was looking out for the rest of us.

Joe Biden? It�s time for US to be Patriotic? No. It�s time for YOU to be patriotic. In fact, it�s too late. As for you saying, �It�s time to be part of the deal�. We want no part of this �deal�. And what a �deal� it was!

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.

Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.

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.

Update: Well looky here. Here�s a glowing Wall Street piece on Obama, written in June 2008. You would think Mr. �Regulator� Obama really is Jesus looking out for us! But�..here�s the paragraph that hooked me�the paragraph that haunts today:

He characterized the senator as a quick study on financial services, citing his early support of efforts by Senate Banking Committee Chairman Chris Dodd and House Financial Services Committee Chairman Barney Frank to empower the Federal Housing Administration to help struggling homeowners.

Oh they �empowered� all right. The Democrats killed this bill while Dodd, Frank and Obama fiddled and helped Fannie and Freddie cook their books, continue to tank, all the while keeping the regulators out of their way. These are the guys who killed the bill that McCain fought for. The bill that would have avoided the financial disaster we witnessed during the past two weeks. In the meantime, take a look at which senators were feeding at the Fannie Mae/Freddie Mac trough. My party is not what it used to be. My party has not only let me down, but it has also screwed me and my country in the process.

Note: All of these facts can be independently confirmed if you are interested in the truth of this matter.

If you pay attention to what Obama is doing right now this might make sense. Obama is filling his cabinet not only with people who agree with him, but also people who disagree with him. Presumably he's following the lead of Lincoln who did this with his cabinet members. The conclusion I come up with is that just because Rahm said it doesn't necessarily mean it will be law.

Emanuel Was Director of Freddie Mac During Scandal...

Emanuel Was Director Of Freddie Mac During Scandal

New Obama Chief of Staff, Others on Board, Missed "Red Flags" of Alleged Fraud Scheme

Freddie Mac Misrepresented Income, Says SEC

Source to Stephanopoulos: President Bush Directly Involved In Leak Scandal