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MATTHEW LEE   |   January 26, 2012    1:11 PM ET

WASHINGTON — Secretary of State Hillary Rodham Clinton says she wants to step off the "high wire of American politics" after two decades and is again tamping down speculation that she might stay in government if President Barack Obama wins a second term.

Clinton told State Department employees on Thursday that she is ready for a rest and is paying no attention to the Republican presidential candidate debates. She said she wants to find out just how tired she is after working flat out as first lady, senator, aspiring presidential candidate and finally the top U.S. diplomat.

Obama's Faux Populism Sounds Like Bill Clinton

Robert Scheer   |   January 26, 2012    5:20 AM ET

I'll admit it: Listening to Barack Obama, I am ready to enlist in his campaign against the feed-the-rich Republicans ... until I recall that I once responded in the same way to Bill Clinton's faux populism. And then I get angry because betrayal by the "good guys" for whom I have ended up voting has become the norm.

Yes, betrayal, because if Obama meant what he said in Tuesday's State of the Union address about holding the financial industry responsible for its scams, why did he appoint the old Clinton crowd that had legalized those scams to the top economic posts in his administration? Why did he hire Timothy Geithner, who has turned the Treasury Department into a concierge service for Wall Street tycoons?

Why hasn't he pushed for a restoration of the Glass-Steagall Act, which Clinton's deregulation reversed? Does the president really believe that the Dodd-Frank slap-on-the-wrist sellout represents "new rules to hold Wall Street accountable, so a crisis like this never happens again"? Can he name one single too-big-to-fail banking monstrosity that has been reduced in size on his watch instead of encouraged to grow ever larger by Treasury and Fed bailouts and interest-free money?

When Obama declared Tuesday evening "no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas," wasn't he aware that Jeffrey Immelt, the man he appointed to head his jobs council, is the most egregious offender? Immelt, the CEO of GE, heads a company with most of its workers employed in foreign countries, a corporation that makes 82 percent of its profit abroad and has paid no U.S. taxes in the past three years.

It was also a bit bizarre for Obama to celebrate Steve Jobs as a model entrepreneur when the manufacturing jobs that the late Apple CEO created are in the same China that elsewhere in his speech the president sought to scapegoat for America's problems. Apple, in its latest report on the subject, takes pride in attempting to limit the company's overseas suppliers to a maximum workweek of 60 hours for their horribly exploited employees. Isn't it weird to be chauvinistically China baiting when that country carries much of our debt?

I'm also getting tired of the exhortations to improve the nation's schools, certainly a worthy endeavor, but this economic crisis is the result not of high school dropouts as Obama suggested, but rather the corruption of the best and brightest graduates of our elite academies. As Obama well knows from his own trajectory in the meritocracy, which took him from one of the most privileged schools in otherwise educationally depressed Hawaii to Harvard Law, the folks who concocted the mathematical formulas and wrote the laws justifying fraudulent collateralized debt obligations and credit default swaps were his overachieving professors and classmates.

If he doesn't know that, he should check out the record of Lawrence Summers, the man he picked to guide his economic program and who had been rewarded with the presidency of Harvard after having engineered Clinton's deregulatory deal with Wall Street.

That is the real legacy of the Clinton years, and it is no surprise that GOP presidential contender Newt Gingrich has been campaigning on his rightful share of it. The international trade agreements that exported good U.S. jobs, the radical financial deregulation that unleashed Wall Street greed, and the free market zealotry of then-Fed Chairman Alan Greenspan, who was reappointed by Clinton, were all part of a deal Clinton made with Gingrich, House speaker at that time.

As Gingrich put it in the first Republican debate in South Carolina: "As speaker ... working with President Bill Clinton, we passed a very Reagan-like program, less regulation, lower taxes." Even the 15 percent tax break that Mitt Romney exploited for his carryover private equity income was a result of the unholy Clinton-Gingrich alliance. Both principals of that alliance were pimps for the financial industry, and that includes Freddie Mac, the for-profit stock-traded housing agency that Clinton coddled while it stoked the Ponzi scheme in housing and that rewarded the former speaker with $1.6 million to $1.8 million in consulting fees.

There were, finally, some bold words in Obama's speech about helping beleaguered homeowners, but they ring hollow given this administration's efforts to broker a sweetheart deal between the leading banks and the state attorneys general that would see the banks fined only a pittance for their responsibility in the mortgage meltdown. Obama could have had success demanding mortgage relief if he had made that a condition for bailing out the banks. Now the banksters know he's firing blanks, and they are placing their bets on their more reliable Republican allies to prevent any significant demand for helping homeowners with their underwater mortgages.

Of course, Romney, Obama's most likely opponent in the general election, will never challenge the Wall Street hold on Washington, since he is the personification of the vulture capitalism that is the true cause of America's decline. Obama should shine in comparison with his Republican challenger, but there is little in his State of the Union speech to suggest he will chart a much-needed new course in his second term.

Luke Johnson   |   January 18, 2012    1:15 PM ET

Former President Bill Clinton said Newt Gingrich and Mitt Romney can't say what they believe and get nominated in a GOP primary, in an interview with Esquire published Wednesday.

"As a private citizen he [Gingrich] was for certain important health-care reforms and believed in climate change and believed there had to be a strong reaction to it. And now he's just like Romney," Clinton said. "Neither one of them can say what they believe to be true and get nominated. Romney's still trying to figure out what he did as governor of Massachusetts and still appeal to this driving vituperative energy."

Gingrich has cited his work with Clinton when he was Speaker of the House as evidence that he can fix the economy. Other times, he has left out Clinton and touted balancing the budget and creating 11 million new jobs.

When asked last December whether Gingrich could take credit for balancing the budget, Clinton said, "Not really, but I think he did work with me to pass some good budgets."

Clinton, however, praised his former adversary last November to NewsMax, saying, "I think he's doing well just because he's thinking, and people are hungry for ideas that make some sense."

Clinton also praised Romney's record as governor of Massachusetts in December, adding that it would be a "mistake" to underestimate him.

Clinton told Esquire that Republicans have been pushed farther to the right.

"Every time the president adopts a plan that they [Republicans] once advocated, they abandon it and push farther to the right," he said. "But the voters can push them back."

Patrick Gavin   |   January 12, 2012    5:37 PM ET

Although Bill Clinton's reputation as a statesman has long since recovered in most quarters following personal scandals in the 1990s, a new, four-hour documentary portrays the arc of his career as one littered with sexual dalliances and foibles.

That's doubly surprising when you consider the source: not a conservative production company but PBS.

PHOTOS: Political Pets

Kathy Kottwitz   |   January 11, 2012    2:39 PM ET

Politicians with their four legged friends through out the years.


To see more great photography visit HuffPost Exposure.

Newt - Democracy's Blessing or Curse?

Kevin Bermeister   |   December 21, 2011    5:27 AM ET

In one fell swoop, Newt Gingrich focused the worlds' attention on all of the ignorance that has plagued Israel through more than 30 years of rhetoric and innuendo: a rhetoric cultivated by Israel's opponents and nurtured by those complacent enough to accept it as gospel. Beginning as early as the establishment of the State of Israel and gaining steam through the progression of politicians that sponsored the Oslo Accords, this malaise has grown unchecked, but Newt fixed that!

Unsettling as it may be, in the arena of global policy making, it is a general practice for political leaders from one administration to spin webs of misinformation and half-truths in order to elicit compliance from the politicians of other nations. Instead of leading towards sound policy and even-handed legislation, this political manipulation simply promotes confusion and ignorance. This practice of spreading ignorance and inflammatory rhetoric regularly happens when, for example, the principal sponsors of important events promote their private views by encouraging less scrupulous politicians to espouse their personal agendas. The corrupting influence of financial incentives exists as something of a permanent virus contaminating democracies that otherwise work quite well. The story is an old one in which politicians, who often begin with the best of intentions seeking tirelessly to achieve their various moral objectives, ultimately find themselves in compromising situations, capitulating to the views of their supporters, political advisers, or even adversaries.

When it comes to spewing prejudicial views against Israel, there are all too many examples of this disturbing practice. Take, for instance, the much maligned remarks uttered last month by the U.S. Ambassador to Belgium, Howard Gutman. Speaking at a conference on anti-Semitism sponsored by the European Jewish Union in Brussels, Gutman insisted that recent European anti-Semitism was fueled by Israel's delaying negotiations for a Palestinian state. While Gutman was widely castigated for his comments, the loathsome practice of blaming Israel for the hatred lobbed at her is all too common. Such mindless speech may just be a case in point but then the same must be said for the words delivered by Secretary of State Hilary Clinton at this year's Saban conference. Clinton openly expressed her concern for the future of Israel's domestic democracy claiming that legislation introduced in the Knesset against radical left-wing NGOs endangered the process of democracy. Her comments rang out much to the chagrin of Israel's die-hard politicians who live by that democracy each day.

Such rhetorical antics make me think of Abraham Lincoln's famous words: "You can fool some of the people all of the time, and all of the people some of the time, but you can't fool all of the people all of the time." If, as a politician, you can fool all of the people some of the time, would you? Perhaps that's what politicians must do to survive in the world of politics; but if that's the case, then fooling some of the people all of the time would probably keep you in politics longer! Hmmm... food for thought? The fickle nature of politicians is so plainly reflected in these words, and that alone should be enough to set alarms buzzing. However, we live in a jaded world where constituents who cling to the belief that their votes are the driving force behind democracy's vibrancy swallow the deceitful rhetoric unprincipled politicians throw at them.

How foolish to endorse anti-Semitism as being fueled by political action, as Ambassador Gutman did, or, worse yet, the paradox of insisting that the passage of a law in a democratically elected government is an affront to the very democracy that gives rise to that law as Secretary Clinton posited. Absurd! Such haranguing is fueled by ignorance and, in turn, encourages people who support even more ignorant politicians too busy spouting their own invectives to be deterred by facts!

I was in the midst of composing this article when, unrelated to my writing, I was asked to describe what a blessing is and how it relates to free choice. At first I did not connect this seemingly tangential question to my article, but now I find myself weaving my understanding into the very concept of free choice inherent in a democracy.

The will and insights that motivate society to modify its course must be understood by those disciplined push-pull politicians tasked with navigating the political fog. A blessing causes a positive change to the essential self when bestowed by a selfless agent, notwithstanding our limitation to perceive this "magical" process, we all know individuals that may be considered blessed who deliver successful actions and outcomes.

Good leaders are distinguished because their insight leads them to achieve goals that reflect their accurate comprehension of it. The "magic" is in their unshakable bond in the belief that motivates their lifelong careers to bring changes to improve society's fabric. On the flip side, politicians who focus on the struggle with political onslaught or challenges to their personal lives often make compromises that ultimately characterize their infamous or uneventful careers.

Democracy is the blessing of free choice bestowed on society, an antidote to the political virus. When less scrupulous politicians are corrupted by the influence of financial incentives, society is at risk of infection cured only by constituents exercising free choice. Indeed, democratic or even theocratic societies are strengthened by the courage of leaders committed to their unwavering conviction not to be influenced by ignorance and inflammatory rhetoric or those who would attempt to fool all of the people all the time.

By ANNE GEARAN   |   December 8, 2011    4:30 PM ET

THE HAGUE, Netherlands -- U.S. Secretary of State Hillary Rodham Clinton is warning Internet and software companies to beware what they sell to autocratic governments.

Clinton says authoritarian governments are trying to use the same tools of online connection to spy on or restrict citizens. She says those governments sometimes get help from companies that knowingly sell online surveillance software or other tools.

Government-Sponsored Sinner

Robert Scheer   |   December 8, 2011    6:35 AM ET

Who would have thought that Republican voters would prove so accepting of sin? At least when its committed by a white guy, like the serial philanderer Newt Gingrich, who betrayed not one but two wives while they were enduring serious medical difficulties.

In the latest New York Times/CBS poll of Iowa Republicans, alleged philanderer Herman Cain's once impressive support shifts to the new front-runner, Gingrich, whose richer history of marital deceit is not a problem even for the self-described evangelical Christian voters who favor him over Mitt Romney by a ratio of 3-1.

It is the first time that I have felt sympathy for a candidate experiencing the prejudice directed at a practicing Mormon. Clearly the ultimate of "squeaky clean" doesn't cut it for a presidential contender of that faith among Republican Christian "values voters," even when he is compared with a sexual roué of Gingrich's considerable magnitude.

Or perhaps it is Newt's peerless capacity to mask moral hypocrisy with the appearance of religious propriety, first as a Protestant and now as a Roman Catholic, that endears him to other Republicans who wear their religion on their sleeves. Many of those were willing to tear the country apart over the sexual wanderings of a Democrat in the White House, but now they are quite willing to send someone of Gingrich's reputation to the Oval Office. We are speaking of a politician who was having an extramarital affair with a congressional staff member 27 years his junior, now more appropriately his third wife, during the very years when he was so energetically stoking the Clinton sex scandal.

But Newt did manage to cooperate closely with the Democratic president in passing the "welfare reform" legislation that in effect ended the main federal poverty program. Given that 70 percent of those covered by the gutted welfare program were children, it is at least consistent that the former House speaker now favors further aiding those children by wiping out the long-standing restraints on the exploitation of child labor.

Gingrich also cooperated successfully with President Clinton on the Taxpayer Relief Act of 1997, which legislated drastic cuts in the capital gains tax benefiting the wealthy. In addition, he was a great partner for Clinton in whipping up enthusiasm for a broader agenda of deregulation that set the stage for the housing mortgage bubble and resultant Great Recession. It is Gingrich's hypocrisy concerning these economic matters that will prove more troubling as his chances of becoming president increase.

Given that Gingrich was on the payroll of Freddie Mac to the tune of $1.6 million, how in the world will he be able, in a one-on-one debate with Barack Obama, to logically make what has become the standard Republican case: that it was liberal do-gooders at the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac who forced the banks to make bad housing loans?

The honest answer, politically awkward of course, would be to admit that those agencies were government sponsored only on the risk end, and as for profit entities they were owned and traded by investors in the stock market. They got in trouble for the same reason Citigroup did, because the obscenely huge bonuses of their top executives were driven by their profit performance and not the quality of the home mortgages they backed.

The packaging of hugely profitable but eventually toxic mortgage securities, with the GSE seal of approval, that is at the heart of the economic crisis was the result of a Republican-engineered deregulatory mania that Newt abetted and Clinton supported. A mania that Sen. Obama criticized, but not Gingrich, who was a highly paid booster for Freddie Mac even as the housing market was imploding.

The private/public GSE model of the two housing agencies in which the risk but not the profits was carried by the public is the very arrangement that Gingrich is on record as celebrating as late as 2007 when the crisis was visibly under way. Gingrich favored it as a model not just for housing but even the space program. "I'm convinced that if NASA were a GSE, we probably would be on Mars today," he declared in a post on the Freddie Mac website on April 14, 2007.

Although Gingrich now claims that when he was on the Freddie Mac gravy train he was simply giving objective advice as a "historian" that sought to improve the agency's performance, the truth is quite the opposite. Obama will no doubt delight in quoting back to Gingrich his assertion that "while we need to improve the regulation of the GSEs, I would be very cautious about changing their role or the model itself."

Gingrich, who ran into trouble with the House Ethics Committee when was speaker and paid a $300,000 fine, is himself a variant of a GSE, having turned his government backing into a hugely profitable enterprise. After he left office his various personal business enterprises had revenues of about $100 million. Last week in South Carolina, Gingrich scoffed at the idea that he needed to work as a lobbyist; after all, he noted, he is paid $60,000 a speech.

You would think that with a sorry personal and political record like Gingrich's -- and there is so much more -- the Republicans would never nominate him as their presidential candidate if they expected to win. But I wouldn't rule it out, for the driving faith of the GOP has become the notion that the toxic mixture of moral hypocrisy and unfettered greed is a formula for victory. Newt could be their man.

ANNE GEARAN   |   December 5, 2011    4:22 PM ET

VILNIUS, Lithuania (AP) U.S. Secretary of State Hillary Rodham Clinton is using a European trip to hold a rare meeting with Syrian opposition figures.

Clinton plans to sit down with seven Syrian-born opponents of the Bashar Assad regime during a visit to Geneva, Switzerland on Tuesday. A State Department official says it's only the second time she has held such a session since the U.S. decided this summer that Assad would never allow reforms and must leave office.

The group of exiles is assembling from across Europe.

  |   November 29, 2011    9:29 AM ET

WASHINGTON -- President Barack Obama and two former presidents, George W. Bush and Bill Clinton, are joining top anti-AIDS advocates for a panel discussion to observe World AIDS Day.

The discussion will take place Thursday at George Washington University and will be streamed live on YouTube. Bush and Clinton will participate via satellite.

Luke Johnson   |   November 28, 2011    1:06 PM ET

Former President Bill Clinton hinted at what his wife, Secretary of State Hillary Clinton, will do after she leaves office in an interview with conservative outlet NewsMax Sunday. Hillary Clinton has said that her role in the Obama administration would be her "last public position," and that she will not serve a second term as secretary of state if President Barack Obama is reelected. She has also repeatedly said that she will not run for president again.

"I think she wants -- and she has said publicly -- to continue a lot of the work that she's done, she did as a private citizen, as first lady, as senator and as secretary of state," said the former president. "Around the world, she's done an enormous amount of good in, you now, the so-called soft power areas, empowering women and girls, helping them, giving them access to capital, helping them make a living, promoting better healthcare practices. I think she will have a major role to play in the nongovernmental world. That's what she plans to do, and I think she'll do it well."

Secretary of State Clinton hinted at her plans in December 2010, saying that she would "probably go back to advocacy work, particularly on behalf of women and children, and particularly around the world because if you look at what is still happening to women in many parts of the world it is tragic and terrible."

In the Newsmax interview, Clinton also praised Republican presidential candidate Newt Gingrich, his one-time adversary as speaker of the House, saying "he's being rewarded for thinking."


Alana Horowitz   |   November 27, 2011   12:50 PM ET

Bill Clinton praised Newt Gingrich while explaining his recent surge in the polls.

"I think he’s doing well just because he’s thinking, and people are hungry for ideas that make some sense," Clinton told NewsMax. "He's being rewarded for thinking."

He also praised the candidate's debate performance, though he declined to predict a primary win.

"I still think Romney comes across as strong and forceful and knowledgeable and I thought Perry had a better debate last night, he did much better than he's doing," he said.

The former president's praise is a surprise considering their contentious past. During Clinton's presidency, then-House Speaker Gingrich fought Democrats hard on such issues as Medicare and welfare reform. He also pushed for Clinton's impeachment.

More recently, though, Clinton and his allies have offered positive feedback on the GOP candidate.

"He is brilliant," Dick Morris, a former Clinton campaign strategist, told HuffPost's Sam Stein. "He's a very skilled adversary."

Clinton called Gingrich "creative, flexible, and brimming over with new ideas" in his book and, in September, predicted a comeback for GOP hopeful.

Newt Gingrich Long Advocated Home Ownership Push Prior To A Reported Freddie Mac $1 Million Payday

Zach Carter   |   November 16, 2011   10:10 PM ET

WASHINGTON -- Republican presidential contender Newt Gingrich has been one of the most influential conservative voices advocating the use of home ownership efforts to alleviate poverty. Although his work as a highly lucrative consultant for Freddie Mac may have been more political pomp than policy circumstance, Gingrich's political clout was part of the mortgage giant's push to grant bipartisan legitimacy to its epic housing gamble.

The former House speaker's long record of pushing to expand home ownership casts significant doubt on his recent claim that he encouraged Freddie Mac to change its policies during the Bush era, when the mortgage giant shelled out roughly $30,000 a month for Gingrich's work.

R.C. Hammond, a spokesman for the Gingrich campaign, confirmed the paycheck amount to HuffPost, but said the money went to Gingrich's consulting firm, The Gingrich Group. "To say he was paid personally is inaccurate," Hammond said. He went on to say that Freddie Mac paid the firm for "strategic advice on a wide variety of issues," including dealing with the cost of employees' health care. "He wasn't brought in to help them with their lending practices," Hammond said.

Gingrich's work for Freddie Mac was lucrative. His consulting firm was paid between $1.6 million and $1.8 million over eight years to advise the mortgage giant, according to Bloomberg -- a long time for an ex-lawmaker to work with a single client. And those ties have become extremely sensitive as the former House speaker's polling numbers have improved. Many GOP primary voters loathe Fannie and Freddie, and Gingrich and his fellow Republican presidential contenders have attempted to blame the two mortgage giants -- which played a destructive role in the housing bubble -- for unrelated financial misdeeds on Wall Street that crashed the banking sector.

But dating back to Ronald Reagan's first term, Gingrich pushed a conservative "Opportunity Society" platform that encouraged the ownership of property -- particularly houses and corporate stocks -- to promote individual responsibility and social progress. Gingrich has not sought to obscure his views on the matter. In several books, he has advocated for "property ownership." In his 1995 book, "To Renew America," Gingrich wrote:

"We want to ensure that, from day one, people who work hard can see their work pay off. Part of this process involves giving people control over their own housing. Poor people ought to be given a chance to buy the property they live in. "

When Gingrich resigned from Congress in 1998, both he and his top aide would move into the Fannie and Freddie fold. Gingrich was hired as a consultant for Freddie Mac in 1999.

Gingrich's chief of staff, Arne Christenson, became a top lobbyist for Fannie Mae, where he boasted to reporters about providing low-down-payment mortgages, and penned at least one op-ed for the conservative Washington Times newspaper defending Fannie Mae's low-income housing efforts. Christenson wrote:

At least 50 percent of the units that Fannie Mae finances must serve low- and moderate-income people. Fannie Mae must also meet tough percentage-of-business goals for serving residents of underserved areas and for serving very low-income borrowers. For instance, in 2000, Fannie Mae provided $55.6 billion serving 675,000 households living in underserved census tracts - nearly 31 percent of the total households we served. With the exception of Freddie Mac, no other company in America faces the type of quantitative, targeted housing goals that Fannie Mae must meet. We have exceeded the HUD housing goals every year since 1994.

Christenson, who now works for American Express, did not return a call seeking comment. His op-ed was published in 2001, while Gingrich was being paid handsomely by Freddie Mac. Hammond said that Christenson had nothing to do with Gingrich getting the consulting job at Freddie Mac. "It's kind of like one guy going to the Red Sox, and one guy going to the Yankees," Hammond said.

During this period, President George W. Bush was promoting a platform to expand the conservative base dubbed the "Ownership Society," an effort that Jackie Colmes of the Wall Street Journal noted, at the time, was related to Gingrich's long efforts to promote home ownership. Bush and Republican political strategists hoped to use home ownership to convert more middle-class and low-income voters into consistent Republicans. Owning a home, after all, comes with a host of tax liabilities -- most notably property taxes and capital gains, if the home is sold. Making more voters wary of such tax rates would likely help enlist them in the conservative cause.

Gingrich was just one of dozens of political elites involved with Fannie Mae and Freddie Mac. William Daley, currently chief of staff for President Barack Obama -- served on Fannie's board for much of the Clinton years, and former Obama Chief of Staff Rahm Emanuel served on Freddie's board. The companies not only spent millions on campaign contributions and lobbying -- they appointed influential figures from both political parties to lucrative positions at the company.

"When it came to Fannie, Freddie lobbying dollars and political connections, there were probably only a handful of people related to financial services in Washington whose hands were genuinely clean," notes Joshua Rosner, managing director at Graham Fisher & Co. and co-author of "Reckless Endangerment," a history of the recent banking collapse.

Most of these appointees played almost no role in the mortgage giants' policies, but seemed to lend political legitimacy to their activities by their very presence on the payroll. "Occasionally when there's a threat, they'll call their friends and say, 'I don't think it's a good idea for you to do this. Or, hey, Fannie's opening a new multifamily development in your district, you should go to the ribbon cutting ceremony,'" Rosner said.

Several former Gingrich staffers declined to comment on Gingrich's actual work at Freddie Mac. "I don't know enough about it," said Rick Tyler, who worked with Gingrich from July 1999 to June 2011, adding that he doesn't remember Gingrich's work on housing, despite the $1.6 million contract. A.J. Young, who served as CFO of The Gingrich Group, told HuffPost he could neither confirm nor deny the information in Bloomberg's report. Nancy Desmond, a vice president with The Gingrich Group, did not respond to phone calls.

The official talking points for Gingrich's campaign do not specify the candidate's actual work with Freddie Mac. They state that Gingrich endorses government support for home ownership, but only "within a context of learning how to budget and save in a responsible way," which the campaign says Freddie ignored during the housing bubble.

Despite advice that Gingrich may have provided to Freddie Mac, he was on the mortgage giant's payroll during a massive accounting scandal at the company -- which, along with a simultaneous Fannie Mae accounting disaster, was the largest in American corporate history. The company first began paying fines in 2002 to settle charges related to the 101 different violations detailed by its regulator, but continued to settle charges with authorities for years afterward. The debacle forced the company to re-state several years of corporate earnings and resulted in the ouster of Freddie CEO Leland Brendsel, along with an effort to regain his compensation. Gingrich continued to work for Freddie Mac, signing another contract with the company in 2006.

California Refuses to Accept Obama's Banking Sellout

Robert Scheer   |   November 10, 2011    4:54 AM ET

There is no three-strikes law for crooked bankers, not even a law for a fifth strike, as The New York Times reported in the case of Citigroup, cited last month in a $1 billion fraud case. Unlike the California third-striker I once wrote about whom a district attorney wanted banished forever to state prison for stealing a piece of pizza from the plate of a person dining outdoors, Citigroup executives get off with a fine and by offering a promise not to do it again, and again and again.

As the Times reported when Citigroup agreed to settle SEC charges last month: "Citigroup's main brokerage subsidiary, its predecessors or its parent company agreed to not violate the very same antifraud statue in July 2010. And in May 2006. Also as far back as March 2005 and April 2000."

Not that the bankers face prison time, since the Justice Department has refused to act in these cases, and the Securities and Exchange Commission is bringing only civil charges, which the banks find quite tolerable. This time, the fine against Citigroup was $285 million, which may sound like a lot except that the bank raked off as much as $700 million on this particular toxic securities deal. As the Bloomberg news service editorialized, "... there should be only one answer from Jed S. Rakoff, the federal judge in New York assigned to weigh the merits of the agreement: You've got to be kidding."

Not to pick on Citigroup, the too-big-to-fail bank that Clinton administration Treasury Secretary Robert Rubin helped make legal before he was paid off with a $126 million job on Wall Street; that corporation was not the only serial offender. "Citigroup has a lot of company in this regard on Wall Street," the Times noted, "nearly all of the biggest financial companies -- Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America among them -- have settled fraud cases by promising that they would never again violate an antifraud law, only to have the SEC conclude they did it again a few years later."

So forget relying on the federal government to hold the Wall Street swindlers accountable. Indeed, the Obama administration has been involved in negotiating a deal with state attorneys general to settle their complaints with the banks for a pittance of compensation for the victims. In return, the states would promise not to institute further legal proceedings against the banks.

The fix was in for what a New York Times editorial on Tuesday headlined "Letting the Banks Off Easy" described as "paltry" mortgage relief, reducing by less than $20 billion the balances of 14.5 million underwater homeowners who are "drowning in some $700 billion of negative equity." The deal has been stalled by the refusal of California Attorney General Kamala Harris to accept this sellout. Among its other disastrous concessions would be ending further investigation by the states into financial skullduggery connected with the housing meltdown.

In September, Harris, elected in a Democratic sweep of the state's top offices in 2010, went against the dictates of the Democrat in the White House, stating that she refused to release the banks from legal liability for the mortgage crisis. That is the nub of the pending White House-brokered deal with the banks. As the Times summarized it: "The proposed settlement reportedly would prevent the states from pursuing claims against banks relating to fraud or abuse in the origination of the bubble. It would also prevent states from pursuing claims for foreclosure abuses, like improper denial of loan modifications."

Traditionally the states provided the essential regulation of mortgage origination, ownership and sales as a transparent process duly recorded and subject to public examination at the county level. But in order to facilitate the gathering of those mortgages into the sort of collateralized debt obligations that the banks could then bet on and trade worldwide, homeownership became a murky matter. Many of the mortgages now in question, including the ones that Citigroup's "synthetic" derivative was based on, are no longer owned by the banks that originated them. They are instead part of the Mortgage Electronic Registration Systems (MERS) database, owned by a consortium of banks and residing in computers in Reston, Va.

The MERS system is described by the Times as "a land registry system implicated in bubble-era violations of tax, trust and property law." The Obama-supported settlement would make it very difficult if not impossible to investigate at long last the workings of MERS and other systemic sources of what is now a full-blown international economic crisis. As the Times editorial put it, "In effect, the legal waivers being contemplated would let the banks pay up to sweep wrongdoing under the rug."

Thankfully, we have a few state attorneys general, most prominently California's Harris, standing up for the American people, but it is outrageous that a president who avowedly committed to defending the public interest would now be subverting that effort rather than leading it.