As a young graduate student pursuing an advanced degree in modern European history, Newt Gingrich wrote a dissertation titled “Belgian Education Policy in the Congo: 1945-1960.” Thereafter, in the course of writing 23 books, the scholar-politician pontificated on many subjects, from the pope to a “pouting sex kitten,” who appears for a quick romp in a novel about the Civil War.
"I am now a famous person. I represent real power.”
None of his work had anything to do with the home lending practices that would help to destroy the American economy. So why would Freddie Mac pay $300,000 to Professor Gingrich in 2006 – just as the troubled mortgage lender was facing calls on Capitol Hill for increased regulation?
Turns out, that was just small change in the overall sweetheart deal that no historian but Gingrich could ever get. Bloomberg News reported this week that Gingrich made between $1.6 million and $1.8 million for giving additional “advice” to Freddie Mac. When I asked about the amount, a Freddie Mac spokesman refused to comment, but officials at the agency who are familiar with the contracts confirmed the numbers reported by Bloomberg.
This is not just another Gingrich laugher, up there with his revolving Tiffany’s account or his multiple personal hypocrisies. This story encapsulates why Washington is broken and how the powerful protect and enrich themselves, unanchored to basic principles.
At the same time, it’s a case study in the Gingrich method: denounce something as outrageous, while doing that very outrageous thing himself. (Politicians with ties to Freddie Mac came in for scathing Gingrich criticism in 2010.) There is no evidence, as Gingrich claimed last week in a debate, that he offered Freddie Mac a dime’s worth of advice in his capacity as a “historian,” or warned against a surge in subprime lending. To the contrary, former Freddie Mac executives told Bloomberg that Gingrich was brought in to help the agency continue down the very path of its ruination – backing subprime mortgages.
Plain and simple, Gingrich was paid for his influence. A former speaker of the House, even a disgraced one, is still worth something. And so, what Gingrich actually did was praise Freddie Mac’s business model, according to an Associated Press article in 2008. On top of that, he was asked by executives at Freddie to help frame the debate to win over fellow conservatives.
Freddie Mac and its sister firm in government-sanctioned lending assistance, Fannie Mae, were forced into government receivership in 2008. Since then, they have cost taxpayers $181 billion. These two agencies are often cited by Republicans as the main reason for the financial collapse.
With Gingrich, there ought to be a special category for gall. Here’s what he said when asked in last week’s debate about his $300,000 deal with Freddie:
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.If he can provide a single speech, audio transcript or paper backing this claim, I promise to personally sell copies of “Belgian Education Policy in the Congo,” on street corners for a day.
And if he had come to such an enlightened and early conclusion about the pending housing collapse, why didn’t Citizen Gingrich sound the alarm for his fellow countrymen? From this most gaseous of politicians, an op-ed, or quick sit-down with the sycophants at Fox News, would have helped warn a nation of its folly. But there is nothing. The narrative of Newt Gingrich as the Paul Revere of the housing crisis is a self-fantasy to cover up his complicity.
As to the Gingrich method, this latest episode is textbook. He’s best known, of course, for blistering President Clinton for his dalliance with Monica Lewinsky at the same time that he, then speaker, was carrying on an affair with a House aide, now his third wife, Callista Gingrich.
In his latest incarnation, Gingrich poses as an outsider who will break up the Washington establishment — a scourge of the elites who feed off its culture of cronyism. But after 33 years in Washington, if Gingrich were any more embedded in the establishment, pigeons would be landing on his shoulder seeking the kind of relief normally accorded statues. Wednesday, while defending his work for Freddie, Gingrich said, “It reminds people that I know a great deal about Washington.” ...
The Freddie Mac deal shows just how easy it is for former public servants to enrich themselves. In this case, a well-connected politician gets paid an extravagant fee to “consult” with a runaway mortgage backer that is fighting off calls for increased scrutiny. He was hired, Bloomberg reported, to build bridges to fellow Republicans in Congress.
For added chutzpah, Gingrich recently suggested that Democratic politicians who were influenced by lobbyists at Freddie and Fannie ought to go to jail. But Gingrich draws a distinction for himself. “I did no lobbying of any kind,” he said on Wednesday. No, that would be wrong.