McCain, Obama, financial crisis ( Clearly McCain has much better judgment )

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   Someone sent me this article.     I don't have a link for the article but I think this is well worth reading and passing on to others:


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McCain, Obama, financial crisis

In May 2006 Sen. John McCain co-sponsored a bill, the Federal Housing Enterprise Regulatory Reform Act (S.109). The sponsor of the bill was Sen. Charles Hagel-Republican from Nebraska. The other co-sponsors of the bill, along with McCain, were Republican Senators, John Sununu from New Hampshire and Elizabeth Dole from North Carolina. The primary purpose of the bill was to address the regulation of secondary mortgage markets. The Democrats killed it.

Evidently, more than a few Senators, including McCain, believed that a crisis was looming if serious reforms were not made to address the problem of financial institutions making loans that were too risky. In a speech made on the Senate floor on May 25, 2006, Sen. McCain said the following::

McCain - The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

McCain - The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems.

and Sen. McCain went on to say,

McCain - For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

and McCain ended with:

McCain - I underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
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It seems McCain had a pretty good handle on things and that was over two years ago. And just to emphasize again, the Democrats killed the bill. Uh, Yeah. But, in retrospect, it seems those old guys like McCain can be pretty darn smart sometimes.

By the way, exactly who were the recipients of that lobby money that Mccain said was being used "in an effort to interfere with the regulator's examination of the company's accounting problems." Well, here is the top 14 on the list, ranked in order with the recipients of the most money at the top:

Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008

Dodd, Christopher $165,400
Obama, Barack 126,349
Kerry, John 111,000
Bennett, Robert 107,999
Bachus, Spencer 103,300
Blunt, Roy 96,950
Kanjorski, Paul 96,000
Bond, Christopher 95,400
Shelby, Richard 80,000
Reed, Jack 78,250
Reid, Harry 77,000
Clinton, Hillary 76,050
Davis, Tom 75,499
Boehner, John 67,750
Conrad, Kent 64,491

Democrat Christopher Dodd, at the top of the list, currently serves as the Chair of the Senate Banking Committee. Amazingly, Democrat Barack Obama achieved reaching number two on the list, passing everyone except Dodd, and despite serving less than one complete term in the Senate! And now, we are about to find out why Obama got so much lobby money....

Remember earlier when McCain mentioned Franklin Raines, Fannie Mae's former Chief Executive Officer? Well, it seems he was the budget director under the Clinton Administration from 1996-1998. from Wikipedia::

On December 21, 2004 Raines accepted what he called "early retirement" from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses.
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Raines was ousted as CEO of Fannie Mae due to a $6.3 billion accounting scandal in 2004. $6.3 billion. Raines later became an economic adviser to Sen. Obama in Obama's run for the presidency. The motive behind Raines' accounting scandal was to line his own pockets. Fannie Mae had built in incentives for executives. The incentives were tied to Earnings Per Share (EPS) targets. So, Raines "cooked the books" to make Fannie Mae appear that the institution was doing much better than it actually was. Raines' received $52million of his $90million in compensation from 1998 to 2003 by "cooking the books," artificially giving Fannie Mae at least the appearance of having met EPS targets.

Yet another former CEO of Fannie Mae was Jim Johnson. Johnson was one of three Obama economic advisors until earlier this year. Countrywide Financial Corp. gave Johnson $7 million in loans at below market rates, including a 3.875% loan for a $971,000 home in Washington, D.C. 3.875%. Uh, yeah. Try going to any financial institution yourself and see if you can get a loan at that rate. Johnson only resigned from working on the Obama campaign after Sen. Hillary Clinton brought this up during the primaries. Gee, one would think Obama would do a better job of "vetting" his economic advisers.

Little hint, if you ever start a business, don't hire Barack Obama, Christopher Dodd, Franklin Raines, or Jim Johnson to work in your finance department. Here's another hint, don't hire them to run the economy either.

Thank you,
Bob Vaught