Rahm Emanuel Made At Least $320,000 From Freddie Mac Doing Squat

The Chicago Tribune reports that "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... "

"The Freddie Mac money was a small piece of the $16 million he made in a three-year interlude as an investment banker a decade ago... He was named to the Freddie Mac board in February 2000 by Clinton, whom Emanuel had served as White House political director and vocal defender during the Whitewater and Monica Lewinsky scandals. The board met no more than six times a year. Unlike most fellow directors, Emanuel was not assigned to any of the board's working committees, according to company proxy statements. Immediately upon joining the board, Emanuel and other new directors qualified for $380,000 in stock and options plus a $20,000 annual fee, records indicate. On Emanuel's watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass. The accounting scandal wasn't the only one that brewed during Emanuel's tenure. 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. 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. Freddie Mac reported recently that it lost $50 billion in 2008. It so far has tapped $14 billion of the government's guarantee and said it soon will need an additional $30 billion to keep operating."

The collapse of Fannie and Freddie based on buying up bad mortgages are at the very core of our current financial mess. Rahm Emanuel was on the board of Freddie as disaster surrounded him. Rahm Emanuel recieved large amounts of money for doing nothing on the Freddie board.

This is the man we want advising the President on our current financial mess? The fire is burning, but don't worry, the arsonist is here to help! Not only are arsonists like Emanuel helping run the show at the White House, but arsonists the likes of Rep. Barney Frank and Senator Chris Dodd, who continously assured America that Fannie and Freddie were financially strong and encouraged continued recklesss lending, are running the show in Congress.

I propose a thought experiment: Replace the name Rahm Emanuel with Karl Rove in this Chicago Tribune story and imagine the difference in the media reaction. Imagine the difference in the magnitude of outrage.

If Democrat punitive taxes are going to be used against AIG executives perhaps Congress should consider taxing %90 of what Rahm Emanuel made off of Freddie as corruption surrounded him and he did nothing but sit on his rear.

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