[Vision2020] The Inside Man

[Art Deco]

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November 18, 2011
The Inside Man
For months, Newt Gingrich tried to ingratiate himself with the Republican Party's right wing by tearing down the two government-sponsored mortgage companies, Fannie Mae and Freddie Mac. He joined the counterfactual conservative chorus that prefers to blame the companies for the housing crisis rather than the banks. He lamented their cozy relationship to Washington's insiders. And he was rewarded with a swell of support from the anybody-but-Mitt-Romney crowd. 

The self-styled reform candidate left out a small detail. He made a great deal of money from Freddie Mac for many years, and he was deeply tied to its power structure. 

In his latest book, "To Save America," Mr. Gingrich slams the companies as "so thoroughly politicized" and "irresponsible" that they should be replaced by smaller companies, without government backing, that "focus on making a profit, not manipulating politicians." In an October debate of the Republican presidential candidates, he suggested that Representative Barney Frank be put in jail for being close to Freddie's lobbyists. 

In a debate earlier this month, however, he was asked what he did in exchange for $300,000 from Freddie in 2006. He said he advised the company, "as a historian," not to make loans to people without a credit history. That's a nice sum for fortune-cookie wisdom, but it turned out to be just a fraction of his inside deal. This week, Bloomberg News reported that Freddie Mac paid him between $1.6 million and $1.8 million in "consulting fees" over eight years beginning in 1999, ostensibly to help design a program to expand home ownership, among other policy matters. 

The real reason he was hired, as company officials make clear, was to act as a liaison to conservatives on Capitol Hill. It wasn't technically a lobbying job, but in 2006 Freddie needed help with rising Republican anger at the companies, and the former speaker of the House had the right credentials. That's typical of the mortgage companies, which over the years have handed out large paychecks to many of the biggest names in Washington, from both parties, in hopes of staying on everyone's good side. 

It's also typical of Mr. Gingrich, who has become quite prosperous trading on his influence in Washington while simultaneously pretending he despises the city's essential nature. The man who regularly rails against "the Washington culture of consultants" is one of its better-paid members. On Friday, The Washington Post reported that one of his think tanks collected $37 million over the last eight years from health care companies and insurers that wanted to be close to a prominent Republican. 

Hypocrisy and hyperbole are bound up in the daily promises of the Republican candidates to shut huge parts of the government. Rick Perry wants to close two or possibly three departments; Michele Bachmann would close the E.P.A. and repeal its regulations; and Mr. Romney would scrap a health care system virtually identical to the one he created in Massachusetts. But Mr. Gingrich's deception was offensive its own way. He has benefited lavishly from the very spendthrift cronyism that he attacks. 



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Wayne A. Fox
wayne.a.fox at gmail.com
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