Mortgage Giants are Big Political Contributors

PoliticalMoneyLine data ranks by dollars spent

October 26, 2004

By PATRICK CROWLEY

Combined they spend nearly $12 million on lobbying during the first half of the year, according to the PoliticalMoneyLine data.

Freddie Mac spent $6.7 million, the sixth highest amount among companies and organizations that spent at least $250,000 on lobbyists. The U.S. Chamber of Commerce topped the list at $20 million.

Fannie Mae came in 16th on the list with just under $5 million.

Kent Cooper, cofounder of the PoliticalMoneyLine, told MortgageDaily.com that he was “surprised” that Fannie and Freddie have spent so much on lobbying.

“What’s surprising is what we’re dealing with here are quasi-government agencies,” Cooper said in an interview. “Most other government agencies in town are prohibited from lobbying Congress. They do their budget work, they try to get funded but they don’t lobby on Capitol Hill.

“But here are some companies that have heavy connections with Capitol Hill,” Cooper said. “They are very politically savvy.”

But Cooper also said given the intense scrutiny Fannie and Freddie are under from Congress, he can understand when the two government-chartered mortgage giants are spending so much on lobbying.

Fannie and Freddie have each gone through accounting scandals and have been criticized for a lack of management oversight. Members of Congress have called for more federal oversight and regulation, though so far that hasn’t happened.

That may be because Fannie and Freddie have been so aggressive in lobbying against any tougher regulations.

“The lobbying reports (filed by Freddie and Fannie) indicate they are concerned about new kinds of oversight and regulation being placed upon them and what kinds of markets and financial service areas they can get into,” Cooper said. “Last year and this year, that seems to be there prime focus.”

Earlier this month Fannie’s lobbying came up during a hearing held by the House Capital Markets Subcommittee on concerns that Fannie misstated its earnings.

“I am tempted to ask how many people in this room are on the payroll of Fannie Mae, because what they do is they basically hire every lobbyist they can possibly hire,” Rep. Christopher Shays, R-Conn., said according to a transcript of the hearing. “They hire some people to lobby and they hire some people not to lobby so that the opposition can’t hire them.”

Fannie and Freddie did not return phone calls to comment.

Freddie Mac spokeswoman Sharon McHale told The Washington Post that lobbying “is an important way for us to educate and inform Congress about who we are and our role in the national housing market.”

Other mortgage related companies and organizations also showed up on the lobbying expenditure list.

General Electric, which operates mortgage lending and insurance units, was the top company in lobbying spending at $8.4 million. Citigroup, which likewise has a mortgage lending unit, was 27th at $3.4 million.

The Mortgage Insurance Cos. of America spent $2.6 million to finish 46th in spending.

Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: pcrowley@enquirer.com