Newt Gingrich Freddie Mac Fees: Former House Speaker Reportedly Received At Least $1.6 Million From Housing Giant
In recent months, GOP presidential candidate Newt Gingrich has strongly criticized Freddie Mac and sister company Fannie Mae, as well as Democrats in Congress that he claims played a key role in the collapse of the housing market. And yet two former Freddie Mac officials recently told Bloomberg that Gingrich made between $1.6 million and $1.8 million in consulting fees from the mortgage company.
That amount is significantly larger than the $300,000 payment that Gingrich was asked about during a Republican presidential debate on Nov. 9.
The Freddie Mac officials also told Bloomberg that Gingrich was asked to build bridges with Capitol Hill Republicans and help sell the mortgage company's public-private structure to conservatives.
While campaigning in Iowa this week, the former House Speaker disputed these claims.
"I do no lobbying of any kind, and I offered strategic advice and that's all I do," Gingrich said. "I don't go to the Hill. I don't lobby in any way. I haven't for the years I've left the speakership, period."
In a discussion with HuffPost's Jon Ward Tuesday, Gingrich made similar claims.
"I have no idea what the dates were. I offered strategic advice over a period of time. I did no lobbying of any kind. And I'm very happy to offer people strategic advice if they come and ask my advice," he said.
Gingrich also spoke favorably about the purpose of government sponsored enterprises such as Freddie Mac, but provided a caveat.
"I personally think there are circumstances where government sponsored enterprises are legitimate," Gingrich told Ward. "You go back and look at the transcontinental railroad, you look at rural electric co-ops -- there are a lot of ways to organize activity in this country. So I was quite happy to talk about the GSEs, which was the question. But once you got into a cycle where people were literally giving mortgages to people with no credit at all, you don't have to be much of a historian to know that's not sustainable."
During his eight years working with Freddie Mac, Gingrich's primary contact was Mitchell Delk, the company's chief lobbyist. According to Bloomberg, Gingrich was allegedly paid a monthly retainer of $25,000 to $30,000 between 1999 and 2002 for consulting with Freddie Mac executives on a program to expand home ownership. Delk later pitched that very idea to the Bush administration.
In the Nov. 9 debate, Gingrich said he warned Freddie Mac about its lending practices: "I offered advice. My advice as an historian when they walked in and said we are now making loans to people that have no credit history and have no record of paying back anything but that’s what the government wants us to do. I said at the time, this is a bubble. This is insane. This is impossible."
However, one source reportedly told Bloomberg that Gingrich gave positive feedback on Freddie Mac's plans to publicly pledge to issue subordinated debt, manage liquidity, undergo capital stress tests and expand various types of risk disclosures. Gingrich also said these moves would enable Freddie Mac to demonstrate benefits to the taxpayer, the source claimed.
For his second contract with Freddie Mac, Gingrich allegedly received a $600,000 retainer. But what he did for that money is highly debated. Gingrich claims he offered the company "advice on precisely what they didn't do."
None of the former Freddie Mac officials who spoke to Bloomberg said Gingrich raised the issue of the housing bubble or was critical of Freddie Mac's business model.
R.C. Hammond, a Gingrich campaign spokesman, disputed the sources' claims.
"Newt did have a series of contracts with Freddie Mac over a period of many years, during which he was paid to give strategic advice," Hammond told Bloomberg.The slideshow below has more details on Newt Gingrich: