Odd Couple Demands Probe of Rahm Emanuel at Freddie as More Money Rolls In

Dec. 25, 2009

Fox News

WASHINGTON — Two strange bedfellows have asked Attorney General Eric Holder to investigate President Obama’s right-hand man, chief of staff Rahm Emanuel, for his potential role in the near collapse of mortgage giants Fannie Mae and Freddie Mac.

The letter by Jane Hamsher, founder of the liberal Firedoglake Web site, and Grover Norquist, Americans for Tax Reform Chief, was sent Wednesday, one day before the Treasury Department announced that it will lift the $400 billion financial cap on loans to the government-sponsored enterprises to make sure they stay afloat.

It also arrived just before the Federal Housing Financial Authority announced Thursday that it would place salary caps on 11 of the companies’ top executives.

Hamsher and Norquist want to know now whether the bailout was in part the result of corrupt practices by Emanuel while he was a board member at Freddie in 2000-2001.

They cited a Chicago Tribune story that described a plan by the executives and the board to use accounting tricks to show shareholders they were reaping massive profits even as they continued down a path of risky investments. The profits were then used to justify the executives’ big bonuses. When Emanuel left the board to enter Congress in 2002, he was qualified for $380,000 in stock and options and $20,000 cash.

The two wrote they would like the Justice Department to “begin an investigation into the cause of Fannie and Freddie’s conservatorship, into Rahm Emanuel’s activities on the board of Freddie Mac (including any violations of his fiduciary duties to shareholders), into the decision-making behind the continued vacancy of Fannie and Freddie’s inspector general post, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the White House, and on the board of Freddie Mac.”

Since the financial bailout began, Fannie and Freddie have received $111 billion in taxpayer loans. In August, the administration projected the cost for rescuing Fannie and Freddie would total $170 billion.

Treasury Department officials said the cap will be replaced with a flexible formula to ensure the companies can stand behind the billions of dollars in mortgage-backed securities they sell to investors.

“The amendments to these agreements announced today should leave no uncertainty about the Treasury’s commitment to support these firms as they continue to play a vital role in the housing market during the current crisis,” the department said in a statement.

FHFA issued its own ruling Thursday that the base salary for officers besides the CEO, CFO and COO cannot exceed $500,000 a year. That means five officers are exempt and 11 will now face a cap.

The capped executives will be allowed to get up to one-third of their salary in additional incentive bonuses. Any deferred cash salary — like stock salary received by private company executives who received bailouts — will be paid partly as a means to keep executive officers working at the GSEs.

FHFA acting chief Edward DeMarco said the compensation deal is to mimic the one set up by pay czar Kenneth Feinberg for private companies.

“The enterprises must attract and retain the talent needed to accomplish (their) objectives. We have worked with the enterprises’ boards and sought the guidance of the Special Master of TARP Executive Compensation, to develop competitive compensation packages that benefit from the structural standards created for the TARP-assisted firms,” DeMarco said.

Eight of the then-top 11 executives at Fannie Mae left the company just before the U.S. government stepped in with its bailout, as did the four highest paid executives at Freddie
Mac.

Treasury officials will provide an updated estimate for Fannie and Freddie losses when President Obama sends his 2011 budget to Congress in February. The formula Treasury will use will provide the institutions with a sufficient cushion based on the losses they may incur over the next three years.

In their letter to Holder, Hamsher and Norquist wrote that the White House has stonewalled any inquiries into Emanuel’s role on the board, noting that the acting inspector general was “stripped of his authority earlier this year by the Justice Department, relying on a loophole in a bill Mr. Emanuel cosponsored and pushed through Congress shortly before he left for the White House.”

The White House has not appointed a new inspector general to determine whether crimes were committed by the board to defraud investors, the two noted, and the statute of limitations for empaneling a grand jury is about to run out.

“Under the influence of Rahm Emanuel, the White House is moving a trillion-dollar slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval,” Hamsher and Norquist wrote.

Asked about the letter on Thursday, White House spokesman Bill Burton did not address the allegations, saying, “I have the feeling that Rahm’s job is very safe.”

Keep the Big Tent big

The Washington Post

By William M. Daley

The announcement by Alabama Rep. Parker Griffith that he is switching to the Republican Party is just the latest warning sign that the Democratic Party — my lifelong political home — has a critical decision to make: Either we plot a more moderate, centrist course or risk electoral disaster not just in the upcoming midterms but in many elections to come.

Rep. Griffith’s decision makes him the fifth centrist Democrat to either switch parties or announce plans to retire rather than stand for reelection in 2010. These announcements are a sharp reversal from the progress the Democratic Party made starting in 2006 and continuing in 2008, when it reestablished itself as the nation’s majority party for the first time in more than a decade. That success happened for one major reason: Democrats made inroads in geographies and constituencies that had trended Republican since the 1960s. In these two elections, a majority of independents and a sizable number of moderate Republicans joined the traditional Democratic base to sweep Democrats to commanding majorities in Congress and to bring Barack Obama to the White House.

These independents and Republicans supported Democrats based on a message indicating that the party would be a true Big Tent — that we would welcome a diversity of views even on tough issues such as abortion, gun rights and the role of government in the economy.

This call was answered not just by voters but by a surge of smart, talented candidates who came forward to run and win under the Democratic banner in districts dominated by Republicans for a generation. These centrists swelled the party’s ranks in Congress and contributed to Obama’s victories in states such as Indiana, North Carolina, Virginia, Colorado and other Republican bastions.

But now they face a grim political fate. On the one hand, centrist Democrats are being vilified by left-wing bloggers, pundits and partisan news outlets for not being sufficiently liberal, “true” Democrats. On the other, Republicans are pounding them for their association with a party that seems to be advancing an agenda far to the left of most voters.

The political dangers of this situation could not be clearer.

Witness the losses in New Jersey and Virginia in this year’s off-year elections. In those gubernatorial contests, the margin of victory was provided to Republicans by independents — many of whom had voted for Obama. Just one year later, they had crossed back to the Republicans by 2-to-1 margins.

Witness the drumbeat of ominous poll results. Obama’s approval rating has fallen below 49 percent overall and is even lower — 41 percent — among independents. On the question of which party is best suited to manage the economy, there has been a 30-point swing toward Republicans since November 2008, according to Ipsos. Gallup’s generic congressional ballot shows Republicans leading Democrats. There is not a hint of silver lining in these numbers. They are the quantitative expression of the swing bloc of American politics slipping away.

And, of course, witness the loss of Rep. Griffith and his fellow moderate Democrats who will retire. They are perhaps the truest canaries in the coal mine.

Despite this raft of bad news, Democrats are not doomed to return to the wilderness. The question is whether the party is prepared to listen carefully to what the American public is saying. Voters are not re-embracing conservative ideology, nor are they falling back in love with the Republican brand. If anything, the Democrats’ salvation may lie in the fact that Republicans seem even more hell-bent on allowing their radical wing to drag the party away from the center.

All that is required for the Democratic Party to recover its political footing is to acknowledge that the agenda of the party’s most liberal supporters has not won the support of a majority of Americans — and, based on that recognition, to steer a more moderate course on the key issues of the day, from health care to the economy to the environment to Afghanistan.

For liberals to accept that inescapable reality is not to concede permanent defeat. Rather, let them take it as a sign that they must continue the hard work of slowly and steadily persuading their fellow citizens to embrace their perspective. In the meantime, liberals — and, indeed, all of us — should have the humility to recognize that there is no monopoly on good ideas, as well as the long-term perspective to know that intraparty warfare will only relegate the Democrats to minority status, which would be disastrous for the very constituents they seek to represent.

The party’s moment of choosing is drawing close. While it may be too late to avoid some losses in 2010, it is not too late to avoid the kind of rout that redraws the political map. The leaders of the Democratic Party need to move back toward the center — and in doing so, set the stage for the many years’ worth of leadership necessary to produce the sort of pragmatic change the American people actually want.

Treetops glisten, but storm snarls Midwest holiday

Dec. 25, 2009

Chron

OKLAHOMA CITY — A fierce Christmas storm dumped more snow and ice across the nation’s midsection Friday after stranding travelers as highways and airports closed and leaving many to celebrate the holiday just where they were.

Meteorologists predicted the slow-moving storm would glaze highways in the East with ice through Christmas night and that gusty thunderstorms would hamper the South. An ice storm warning was issued for parts of West Virginia and the Blue Ridge mountains in North Carolina and Virginia, while a wind chill advisory cautioned of temperatures as low as 30 below zero in Montana.

The National Weather Service warned that blizzards would hit parts of North Dakota, South Dakota, Nebraska, Minnesota, Iowa and Wisconsin on Christmas Day and into the evening.

A sheriff’s deputy in central Iowa’s Guthrie County, where 6 inches of snow fell since Thursday night, said he saw only snowplows on his way to work Friday.

“It’s going to be one of them days,” Deputy Jesse Swenson said. “Everybody wanted a white Christmas — and they got it.”

In Minnesota, Mike Ruhland, who was shoveling his driveway in Minneapolis on Friday morning, said he hadn’t made much progress after two hours.

“I waited too long to start shoveling. For two days, it was the white powdery snow, and now it’s the heavy, thick stuff,” he said. “It’s a pain in the butt, but at least I’m getting my exercise for the month.”

Crews were working to restore power to thousands of customers in Oklahoma, Kansas, Nebraska, Illinois and Iowa. Several small towns in western Iowa, including Deloit, Manilla and Vail, were in the dark, said Greg Miller, Crawford County’s emergency management director.

The National Weather Service said the storm posed a threat to life and property. Officials warned travelers to stay home and pack emergency kits if they had to set out. Oklahoma Gov. Brad Henry declared a state of emergency.

Slippery roads have been blamed for at least 19 deaths this week as the storm moved east across the country from the Southwest. Driving became so treacherous that authorities closed interstates in Texas, Oklahoma, North Dakota and South Dakota to prevent further collisions.

Jonathan Cannon was spending Thursday night at a Baptist church in Goldsby, Okla., after being stuck for several hours on Interstate 35. He had left Sherman, Texas, a little after noon hoping to join his wife in Edmond, Okla. — a trip that usually takes about three hours.

Cannon said about 200 people — plus the dogs many travelers had with them in their cars — were in the church Thursday night, with more possibly on the way. He wasn’t sure if he would be able to finish his journey on Friday.

“This is mine and my wife’s first Christmas together, so she’s not very excited,” he said.

About 100 passengers and the same number of workers were stuck at Oklahoma’s largest airport, which closed Thursday afternoon after several inches of snow clogged runways. At least 70 flights were canceled at Will Rogers World Airport in Oklahoma City. Director Mark Kranenburg told The Oklahoman that the airport re-opened Friday morning, with one of three runways operational, though many flights remained delayed or canceled.

Robert Smith of Denver was forced to cancel plans to fly home on Christmas Eve after visiting family members and friends in Oklahoma City. Smith said he was accustomed to snowstorms — and that none had ever hampered his travel plans.

“We are going to wait it out,” he said. “We went to the grocery store to get stuff. We’ve got the generators ready just in case we need to use them.”

Other stranded motorists took shelter at a high school gymnasium. Eric Adams, a U.S. Mail contractor from Memphis, Tenn., sought shelter at the Flying J Travel Plaza in Sayre in far western Oklahoma after strong winds caused his tractor-trailer to sway.

Oklahoma City had received 14 inches of snow by Thursday night, breaking a record set back in 1914 of 2.5 inches. Winds gusted to 50 mph in central Kansas, while winds gusting at up to 65 mph in Texas drifted the snow as deep as 5 feet in some areas.

The Star-Telegram said the Dallas-Fort Worth area was experiencing its first White Christmas in more than 80 years. While the area had a sprinkling of holiday snow in 2004 and 1997, the last time it experienced “a true, New England-style dose of snow on Christmas Day was Dec. 25, 1926,” the newspaper reported.

Some churches canceled Christmas Eve services, while others saw sharply lower attendance.

“I don’t think God wants anyone to get killed or break a hip or break a knee or something,” said the Rev. Joseph Mirowski of the Greek Orthodox Church of the Transfiguration in Mason City, Iowa.

Since Tuesday, icy roads have been blamed for accidents that killed at least seven people in Nebraska, five people in Oklahoma, four in Kansas, two in Minnesota and one near Albuquerque, N.M.