Bloomberg's scoop about Newt Gingrich's Freddie Mac ties should do him more damage than the Tiffany's story, or the Dinesh D'Souza story, or any of the other flotsam that's dominated the Newt beat recently. Not saying it will, but it should. It cuts against his narrative. The image of Gingrich, the one that Republican voters have come again to accept, is of a Churchillian figure come out of retirement to save America. The reality of Gingrich is of a politician who fell from grace and rebuilt his career by exploiting his political ties.
The Bloomberg story reconstructs one of the ways in which Gingrich did so. "Gingrich’s first contract with the mortgage lender was in 1999, five months after he resigned from Congress and as House speaker," report Chris Benson and John McCormack. Gingrich "was paid a self-renewing, monthly retainer of $25,000 to $30,000 between May 1999 until 2002."
Gingrich didn't work for the other big GSE, Fannie Mae. His former chief of staff did. At the end of 1998, as Gingrich exited the House, his former chief of staff Arne Christenson became Fannie's senior vice president for regulatory policy. On December 7, 1998, Roll Call's Ed Henry (he's now with Fox News) wrote about Christenson's farewell party.*
A spontaneous staff farewell party broke out on House Speaker Newt Gingrich's (R-Ga.) Capitol balcony Thursday evening.
Chief of staff Arne Christenson wowed the crowd, sans Gingrich, by playing a mean piano - ranging from sonatas to Christmas carols. Gingrich executive assistant Heather Hopkins belted out one fine tune after another, from " Summer Loving" to the sad - and perhaps appropriate for the evening - "Auld Lang Syne."
With everyone looking for work, press secretary Christina Martin cracked, " Heather's available for weddings, bar mitzvahs and 'Contract with America' anniversary celebrations."
"It was Santa's Congressional workshop-turned-happening new piano bar," said Martin. "We were strong on Christmas carols, pretty darn good on the 'Grease' soundtrack and a little weak on 'Hey Jude.'"
House Majority Leader Richard Armey (R-Texas) dropped by for a few minutes, putting in unfulfilled requests for country-and-western songs, and much of his staff was there for the bash.
In April 1999, Christenson gave $1000 to the ousted former speaker's pac, Friends of Newt Gingrich. In May, Gingrich inked a contract with Freddie Mac. Just months out of office, Gingrich and his former political operation were tied up with the GSEs. All perfectly kosher, all how Washington normally works. Gingrich's great trick since then has been to become so utterly part of the beltway while offering to lead a crusade against it. Remember how he described his work for Freddie in the CNBC debate.
I offer them advice on precisely what they didn't do... Every contract was written during the period when I was out of the office, specifically said I would do no lobbying, and I offered advice. And my advice as a historian, when they walked in and said to me, "We are now making loans to people who have no credit history and have no record of paying back anything, but that's what the government wants us to do," as I said to them at the time, this is a bubble. This is insane. This is impossible. It turned out, unfortunately, I was right and the people who were doing exactly what Congresswoman Bachmann talked about were wrong. And I think it's a good case for breaking up Fannie Mae and Freddie Mac and getting much smaller institutions back into the private sector to be competitive and to be responsible for their behavior.
Do we think the Republicans who worked with the GSEs from 1999 on were just begging them to change their ways? Really? From 1999 to 2006?
*Yes, this is trivia, but still! Dick Armey showed up!