Saturday, March 7, 2009

Will Barney Frank Have Himself Arrested?

In an interview on CNBC on March 5, Representative Barney Frank said financial regulation was necessary, but "Perhaps most importantly, the American public has the right to know what enforcement actions are contemplated against those irresponsible and, in some cases, criminal actions that lead to the current situation.”

While he did not name names, we would like to note the following irresponsible statement by a man overseeing Fannie Mae and Freddie Mac as they were going bankrupt and losing billions of dollars invested by pension funds and other Americans, all the while still promoting subprime loans, and making large donations to members of Congress.

“I do not think we are facing any kind of a crisis. That is, in my view, the two government-sponsored enterprises that we’re talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We recently had an accounting problem with Freddie Mac that led to people being dismissed, as appears to be appropriate."

"The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. I do not think at this point there is a problem with a threat to the treasury." (Sept. 10, 2003)

These are statements by Rep. Barney Frank, House Financial Services Committee Chairman Barney Frank who runs virtually unopposed. Since 1989 he took over $40,000 in campaign donations from FNMA and he once had a romantic relationship with a FNMA executive. His 2006 campaign took in over $200,000 from real estate, banks and mortgage lenders. These institutions suddenly began to dominate his list of top donors in 2004 and continued to dominate in 2006 and 2008.

Rep. Frank has not yet said what enforcement actions are appropriate in this case.

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