The Democrats' Friends 'n Fat Cats Protection Plan
As the budget stalemate in Washington continues, Democrats are ratcheting up their class-warfare caterwauling. Time to bring out your earplugs and hypocrisy meters.
Liberal political strategist Donna Brazile took to Twitter to assail fiscal conservatives for "taking medicine from seniors" and cutting taxes for "the rich and their corporate donors."
Do-nothing House Minority Leader Nancy Pelosi attacked Republicans for paving a "path to poverty for America's seniors and children and a road to riches for big oil."
The left-wing activist group Campaign for America's Future bemoaned GOP Rep. Paul Ryan's "corrupt" budget plan for catering to "the wealthiest Americans that finance campaigns, the powerful corporate lobbies that have deep pockets for politicians in and out of office."
But as I've said many times, people who live in fat cat-infested houses shouldn't throw stones. The left's overheated rhetoric about pandering to overpaid executives comes just as an independent inspector general has exposed the lavish, out-of-control compensation packages for politically connected Fannie Mae and Freddie Mac mortgage finance bureaucrats.
According to government watchdogs at the Federal Housing Finance Agency, the chief executives of Fannie and Freddie raked in a combined $17 million in 2009-2010 -- the period when the government-sponsored entities were handed over completely to federal conservators. The top six executives at the two institutions pulled in a combined $35 million over the past two years.
In a little-noticed report released late last week, FHFA Inspector General Steve Linick wrote: "F.H.F.A. has a responsibility to Congress and taxpayers to efficiently, consistently and reliably ensure that the compensation paid to Fannie Mae's and Freddie Mac's senior executives is reasonable. This is especially true when you realize that the U.S. Treasury has invested close to $154 billion to stabilize Fannie Mae and Freddie Mac."
The "U.S. Treasury" equals taxpayers, of course. And the "investment" has been a futile bailout that may reach nearly $400 billion if the plug isn't pulled. Linick found an appalling "lack of standardized evaluation criteria, documentation of management procedures and internal controls" over the Fannie/Freddie fat cats' salaries.
In other words: crony government business as usual.
Political appointees to the companies' boards have pocketed millions in stock options to bolster support on Capitol Hill. Clinton-era-appointed board members at Fannie Mae include Jack Quinn (lawyer for pardoned billionaire fugitive Marc Rich) and Jamie Gorelick (Janet Reno's lieutenant at the Justice Department and a potential Obama CIA director nominee). Obama adviser James Johnson made off with $21 million. Former Obama chief of staff and current Chicago Mayor Rahm Emanuel "earned" at least $320,000 for a brief 14-month gig at Freddie Mac. Clinton Fannie Mae head and Obama economic confidante Franklin Raines bagged some $90 million in pay and stock options.
With his ill-gotten gains, Raines went on to purchase a luxurious three-bedroom, seven-bath penthouse condominium a few years ago in the District of Columbia's Ritz-Carlton Residences for $4.9 million -- complete with rooftop terrace with hot tub, a butler's pantry and three parking spaces. Nearly half of the $90 million he earned over five years at Fannie "was tied to bonus targets that were reached by manipulating accounting," regulators told The New York Times.
Brazile, Pelosi, the leftist ground troops and Obama's own pay czar have plenty to say about private executives and corporate wealth. But they remain radio silent about the mother of all financial scandals and the moral hazard-perpetuating government executives at Fannie and Freddie who were in charge of engineering the mortgage meltdown.
Not everyone's looking the other way. Citizens Against Government Waste President Tom Schatz noted: "In their halcyon days, Fannie and Freddie were notorious for their lavish executive salaries and perks. Old habits die hard; but taxpayers should no longer be forced to foot the bill" for the Fannie and Freddie managements' "swanky lifestyles."
While Pelosi demagogues Republican budget cuts for depriving kids and seniors of their meals, the Beltway-sponsored Fannie and Freddie behemoths have been devouring taxpayers' lunches for years. For Fannie and Freddie lobbyists and leeches, the path to prosperity has been paved with a Democratic friends and fat cats protection plan that epitomizes Washington's culture of corruption.