Gingrich defends big contracts with Freddie Mac

URBANDALE, Iowa — Rising in polls and receiving greater scrutiny, Republican presidential candidate Newt Gingrich found himself on the defensive Wednesday over huge payments he received over the past decade from the mortgage giant Freddie Mac.

Gingrich, who now is near the top in polling on the GOP race, said he didn't remember exactly how much he was paid, but the Associated Press, citing a person familiar with the hiring, reported it was at least $1.6 million for consulting contracts stretching from 1999 to early 2008.

Long unpopular among Republicans, federally backed Freddie Mac and its larger sister institution, Fannie Mae, have become targets for criticism stemming from the housing crisis that helped drive the nation deep into recession and then hampered recovery. Ging-rich himself criticized Barack Obama in 2008 for accepting contributions from executives of the two companies.

Speaking with reporters in Iowa on Wednesday, Ging-rich said he provided "strategic advice for a long period of time" after he resigned as House speaker following his party's losses in the 1998 elections. He defended Freddie Mac's role in housing finance and said, "every American should be interested in expanding housing opportunities."

On Tuesday, a House committee voted to strip top executives of Freddie Mac and Fannie Mae of huge salaries and bonuses and to put them on the same pay scale as federal employees. After disastrous losses, both companies were taken over by the government in 2008, and since then a federal regulator has controlled their financial decisions.

Gingrich sought Wednesday to portray his history with Freddie Mac as a sign of valuable experience.

"It reminds people that I know a great deal about Washington," he said. "We just tried four years of amateur ignorance, and it didn't work very well. So having someone who actually knows Washington might be a really good thing."

At least one of his rivals assailed him over the matter.

"It doesn't matter if it's $300,000 or $2 million, the point is the money that was taken by Newt Gingrich was taken to influence Republicans in Congress to be in support of Fannie and Freddie," Minnesota Rep. Michele Bachmann said in a telephone interview. "While Newt was taking money from Fannie and Freddie I was fighting against them."

Fannie Mae and Freddie Mac buy home loans from banks and other lenders, package them into bonds with a guarantee against default and then sell them to investors around the world. The two own or guarantee about half of all U.S. mortgages and nearly all new mortgage loans.

Gingrich defends big contracts with Freddie Mac 11/16/11 [Last modified: Wednesday, November 16, 2011 10:21pm]

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