3/26/09

Rahm "The Fish" Emanuel's sticky little fingers

Breaking story from the Chicago Tribune:

Rahm Emanuel's profitable stint at mortgage giant

Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.

One of those allegedly asleep-at-the-switch board members was Chicago’s Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.

As gatekeeper to Obama, Emanuel now plays a critical role in addressing the nation’s mortgage woes and fulfilling the administration’s pledge to impose responsibility on the financial world.


This guy really raked in the cash while he was at Freddie Mac, same as a lot of other Democrat power players. It was not only a form of Golden Parachute for them, but also a tool to be used for leveraging political power. That didn't set too well with regulators:

…During his brief time on the board, the company hatched a plan to enhance its political muscle. That scheme, also reviewed by the board, led to a record $3.8 million fine from the Federal Election Commission for illegally using corporate resources to host fundraisers for politicians. Emanuel was the beneficiary of one of those parties after he left the board and ran in 2002 for a seat in Congress from the North Side of Chicago.

The board was throttled for its acquiescence to the accounting manipulation in a 2003 report by Armando Falcon Jr., head of a federal oversight agency for Freddie Mac. The scandal forced Freddie Mac to restate $5 billion in earnings and pay $585 million in fines and legal settlements. It also foreshadowed even harder times at the firm.


Wow. I gotta wonder ... was Barney Frank having a hissy fit over those 'earnings', as with AIG? Chris Dodd? Was Barack Obama 'outraged', even belatedly?

Of course not:

Many of those same risky investment practices tied to the accounting scandal eventually brought the firm to the brink of insolvency and led to its seizure last year by the Bush administration, which pledged to inject up to $100 billion in new capital to keep the firm afloat. The Obama administration has doubled that commitment.

You see, you and I are paying for Rahm "The Fish" Emanuel's sticky-fingered sojourn at Freddie Mac. Still not convinced?

Financial disclosure statements that are required of U.S. House members show Emanuel made at least $320,000 from his time at Freddie Mac. Two years after leaving the firm, Emanuel reported an additional sale of Freddie Mac stock worth between $100,001 and $250,000. The document did not detail whether he profited from the sale.

Sarah Feinberg, a spokeswoman for Emanuel, said there was no conflict between his stint at Freddie Mac and Obama's vow to restore confidence in financial institutions and the executives who run them. At the same time, Feinberg said Emanuel now agrees that presidential appointees to the Freddie Mac board "are unnecessary and don't have long enough terms to make a difference."

Sarah Feinberg. Now there's a paragon of political virtue. I'm sure she's right, aren't you? Think about it. Now that Emanuel and his cronies have drained Freddie Mac like a bunch of blood-sucking leeches, their successors "are unnecessary and don't have long enough terms to make a difference."

Then what did he do to merit that $320,000 plus shares?

Why aren't we hearing a call for those funds to be returned, like the AIG bonuses?

Interestingly:

Former President George W. Bush voluntarily stopped making such appointments following Falcon's assessment of their uselessness.