[Rhodes22-list] Politics and Economics - Conflict of Interest

[Brad Haslett]

Anyone smell a little conflict of interest here?  Ya think if this was
a Republican Congressman and his ex-wife the NYT's would pick-up on
the story?  Is the story false because it's written by Fox news?  Are
they lying about Barney being gay? Does anybody remember watching the
video I posted last week of President Clinton saying he couldn't get
Democrats to reign-in Fannie Mae?

Brad

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Friday , October 03, 2008
By Bill Sammon



WASHINGTON —
Unqualified home buyers were not the only ones who benefitted from
Massachusetts Rep. Barney Frank's efforts to deregulate Fannie Mae
throughout the 1990s.

So did Frank's partner, a Fannie Mae executive at the forefront of the
agency's push to relax lending restrictions.

Now that Fannie Mae is at the epicenter of a financial meltdown that
threatens the U.S. economy, some are raising new questions about
Frank's relationship with Herb Moses, who was Fannie's assistant
director for product initiatives. Moses worked at the
government-sponsored enterprise from 1991 to 1998, while Frank was on
the House Banking Committee, which had jurisdiction over Fannie.

Both Frank and Moses assured the Wall Street Journal in 1992 that they
took pains to avoid any conflicts of interest. Critics, however,
remain skeptical.

"It's absolutely a conflict," said Dan Gainor, vice president of the
Business & Media Institute. "He was voting on Fannie Mae at a time
when he was involved with a Fannie Mae executive. How is that not
germane?

"If this had been his ex-wife and he was Republican, I would bet every
penny I have - or at least what's not in the stock market - that this
would be considered germane," added Gainor, a T. Boone Pickens Fellow.
"But everybody wants to avoid it because he's gay. It's the
quintessential double standard."

A top GOP House aide agreed.

"C'mon, he writes housing and banking laws and his boyfriend is a top
exec at a firm that stands to gain from those laws?" the aide told FOX
News. "No media ever takes note? Imagine what would happen if Frank's
political affiliation was R instead of D? Imagine what the media would
say if [GOP former] Chairman [Mike] Oxley's wife or [GOP presidential
nominee John] McCain's wife was a top exec at Fannie for a decade
while they wrote the nation's housing and banking laws."

Frank's office did not immediately respond to requests for comment.

Frank met Moses in 1987, the same year he became the first openly gay
member of Congress.

"I am the only member of the congressional gay spouse caucus," Moses
wrote in the Washington Post in 1991. "On Capitol Hill, Barney always
introduces me as his lover."

The two lived together in a Washington home until they broke up in
1998, a few months after Moses ended his seven-year tenure at Fannie
Mae, where he was the assistant director of product initiatives.
According to National Mortgage News, Moses "helped develop many of
Fannie Mae's affordable housing and home improvement lending
programs."

Critics say such programs led to the mortgage meltdown that prompted
last month's government takeover of Fannie Mae and its financial
cousin, Freddie Mac. The giant firms are blamed for spreading bad
mortgages throughout the private financial sector.

Although Frank now blames Republicans for the failure of Fannie and
Freddie, he spent years blocking GOP lawmakers from imposing tougher
regulations on the mortgage giants. In 1991, the year Moses was hired
by Fannie, the Boston Globe reported that Frank pushed the agency to
loosen regulations on mortgages for two- and three-family homes, even
though they were defaulting at twice and five times the rate of single
homes, respectively.

Three years later, President Clinton's Department of Housing and Urban
Development tried to impose a new regulation on Fannie, but was
thwarted by Frank. Clinton now blames such Democrats for planting the
seeds of today's economic crisis.

"I think the responsibility that the Democrats have may rest more in
resisting any efforts by Republicans in the Congress or by me when I
was president, to put some standards and tighten up a little on Fannie
Mae and Freddie Mac," Clinton said recently.

Bill Sammon is FOX News' Washington Deputy Managing Editor.