Should we file this under the better late than never: New Obama Chief of Staff, Others on Board, Missed “Red Flags” of Alleged Fraud Scheme
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 but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO)of having “failed in its duty to follow up on matters brought to its attention.”
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.”
He wasn’t named? Does that absolve him?
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.”
Is there some sort of magical number of years when a person opens their mouth and says stop, this is fraud and it is illegal?
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.”
Will he wait a couple of years until he can play a meaningful role in that?
Oh you have got to admire the ability of the media to shift gears from unquestioned and unbridled love to suddenly becoming a million microscopes of check and balance. You’ve also got to admire Pres-elect Obama’s ability to find quality people-people who will CHANGE Washington-not.
Noel:
As readers are likely aware, NewsBusters has for months made the case that if Americans knew just how tied to this crisis Democrats were, McCain would have easily won the White House, and the picture in both chambers of Congress would also be much different.
Alas, the media were having none of that, and nicely hid the truth from a public mysteriously not interested in it anyway.
In the end, it seems a metaphysical certitude that in the months to come, America’s disgraceful media will begin to report things about Obama and his team that could have had a HUGE impact on the campaign if revealed months ago.
I guess this is their way of soothing their guilty consciences, assuming any of these folks possess such a thing.
Update: Business & Media Institute notes the numbers on Emanuel and Freddie Mac:
“Clinton’s going-away gift to Emanuel was a seat on the quasi-governmental Freddie Mac board, which paid him $231,655 in director’s fees in 2001 and $31,060 in 2000,” Lynn Sweet wrote for the Chicago Sun-Times on Jan. 3, 2002.
During the time Emanuel spent on the board, Freddie Mac was plagued with scandal involving campaign contributions and accounting irregularities. Freddie Mac and its sister organization Fannie Mae were taken over by the federal government in September 2008 after years of mismanagement and scandal. Treasury Secretary Henry Paulson put the two beleaguered GSEs into a conservatorship, stripping common stock shareholders of their rights to govern the companies. …
“Freddie Mac was accused of illegally using corporate resources between 2000 and 2003 for 85 fundraisers that collected about $1.7 million for federal candidates,” an Associated Press story from April 18, 2006 said. “Much of the fundraising benefited members of the House Financial Services Committee, a panel whose decisions can affect Freddie Mac.”
And, since his successful run for the House of Representatives in 2002, Emanuel has been the beneficiary of campaign cash from Freddie Mac and its sister organization Fannie Mae – $51,750 according to the Center for Responsive Politics Web site OpenSecrets.org.
Ed:
That’s certainly something to keep in mind while recalling the promises by Barack Obama to change the way business gets conducted in Washington.
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Nice work, Obama NOT! Looks right away like a poor future for two of your promises: No unity, no bipartisanship, no working together with Emanuel, and secondly, hiring someone with his track record makes your stated economic promises look like a sham.
Not looking good right out of the gate.
I bet ABC is no longer on the A-list!
Most of these comments or conspiracy theories sound like what comes from the campaigns trying to get elected to some office, mostly B.S. packaged as fact.
The average American is an idiot, especially the religous right whom are the easiet to manipulate, which is why George Bush was able to do so much damage to this country.
Republican or Democrat their both corrupt but the Democrats appear to be the lessor of two evils but if you give them enough rope they’ll hang themselves as well, and screw all of us but most of you deserve it because, again, you’re mostly idiots.
well.. well.. what have you done American Media for keeping Freddie Mac and Fannie Mae collaborators away from the American people during election time?
Are they now turning the American Treasury into another Freddie Mac…with White House as their business office..?
Poor America… you’ve been had ! ! !
Waaah, and Rick Davis took checks from Freddie Mac up until Sep 2008, your point is? Yawn.
A chief of staff is the kind of person that will call the President “Mr. President” even in private. Someone who will put the presidents needs above his own. Can Emanuel do this for President Obama? I think yes. With the means and experience that Emanuel has he will be able to help the President elect considerably.
Leaning Straight Up
LOL, “Kool Aid anyone?” hehehe. Loved that one :d
They are already promoting obama commemerative coins, and commemorative plates. The guy hasn’t even assumed office and they are already commemorating him.
Apparently they understand the need to tap the market of the suckers caught up in the euphoria of “change we can believe in’ before reality sets in…