Obama attacks John McCain saying he is ignorant about the economy. Obama is using this market collapse to infer John McCain is responsible. In fact the entire debacle was started under Bill Clinton dictating where the mortgage lenders would use the high-risk sub prime loans and who would receive them. If the lenders did not comply they were threatened with massive fines and penalties.
John McCain said, “Quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s [Fannie Mae] senior management, which resulted in a $10.6 billion accounting scandal and a $3.8 million fine.”
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, another Obama friend and financial advisor, Fannie Mae’s former chief executive officer. OFHEO’s report shows that over half [$90 million] of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets.
Ken Taylor writes, “Two of Barack Obama’s top staffers, James Johnson who headed the VP selection Committee and Penny Pritzer, Obama’s campaign Finance Chair were both not only involved in this debacle but are attributed in creating the situations that began the sub prime lending schemes that caused the mortgage collapse.”
Penny Pritzer along with Earnst and Young working through Merrill Lynch created the sub prime financial engineering that created this meltdown. While James Johnson was CEO at Fannie Mae when the Clinton Administration ordered the beginnings of the high risk market through the Community Redevelopment Act.
On the Senate floor John McCain said, “I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”
Obama voted “NO” along with the Democrats and the Act S.190 was blocked by the Senate Democrats. Obama is one of the highest recipients of campaign donations from the Fannie Mae and Freddie Mac PACS. Only Barney Frank, Chris Dodd and John Kerry received more.