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Freddie Mac: Mortgage Bank for the Left By: Thomas Ryan
FrontPageMagazine.com | Wednesday, April 07, 2004


When purchasing a home, most young couples do not dream they are contributing to an organization that funds radical, anti-Bush, left-wing advocacy groups. However, it isn’t only the philanthropic foundations that give leftists cash in droves anymore; it’s also publicly-traded, government-protected, taxpayer-subsidized companies, such as the real estate mortgage lenders Fannie Mae and Freddie Mac. Both can be seen channeling money into these divisive groups with motivations far left-of-center.

Fannie Mae and Freddie Mac are the unofficial names given to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, respectively, and are among the four largest financial institutions in the United States. Both companies were created by Congress to provide a secondary market for mortgages from which home buyers can secure mortgage loans with relatively low rates, and investors can obtain fairly safe securities with mortgage-backing. Over the years, both companies have become increasingly privatized while preserving much of their government benefits. Vis-à-vis with their assisting of homebuyers and investors alike, both companies support and aid a host of left-wing groups with funds ranging in the multi-millions of dollars.

Topping the list of the 250 largest publicly traded companies which disproportionally fund left-wing groups over right-wing is Freddie Mac, which scored an “F” on the Capital Research Center’s “Patterns of Corporate Philanthropy” study for being overtly polarized in their philanthropic giving.

Included in the recipients of grants from Freddie Mac are the Center For Policy Alternatives and the Alliance For Justice. The Center for Policy Alternatives claims to seek “progressive solutions built on American values.” According to their “2004 Progressive Agenda,” these solutions include: same-sex marriage, the abolition of the death penalty abolishment, preventing school choice, medicinal marijuana legalization, reformation of the sentencing of felons, and making sure as many unregistered voters as possible register Democrat. The Alliance For Justice, too, seeks “progressive solutions,” but their solutions come in the form of a push for an “independent” judiciary. This group has been systematically outspoken against each of President Bush’s judicial appointments, despite their credentials, favoring instead pro-criminal, pro-abortion, pro-big-government activist appointees.

Fannie Mae is as well culpable for funding a host of left-wing groups. Recipients of their funds include the Association of Community Organizations for Reform Now (ACORN), and the Center for Community Change. ACORN, the self-proclaimed largest left-wing activist organization in the nation, implements an anti-capitalist agenda which has roots in the National Welfare Rights Organization – a 1960’s radical group formed for the sole purpose of inundating the welfare system with enough recipients to break America’s financial back. The Center for Community Change’s goal is to “create better communities and policies” – it hopes to achieve this goal by enlisting such celebrity notables as Susan Sarandon and Russell Simmons to propagate the message to vote Democrat.

Freddie Mac’s most notable left-wing intermingling occurred with their alliance with Jesse Jackson’s Rainbow PUSH Coalition/Wall Street Project. Freddie Mac committed to purchase up to $1 billion in mortgage loans made to minority families through Bank of America and minority-owned lenders. Of this partnership, in 2000 Jackson stated, “With Freddie Mac, we are building new homeowners in our minority communities. Freddie Mac and the Wall Street Project agree that we all win when we expand access to capital for our underserved communities.” This amicable tone was in stark contrast to Jackson’s earlier attack of Freddie Mac, when in 1998 he openly declared the company racist. The large grant given to Jackson’s group suspiciously came after Jackson’s highly publicized attacks on the company, in which he alleged that their lending and employment practices were discriminatory. Upon securing the promise of the large financial contribution from Freddie Mac, Jackson desisted his pre-planned protests; the shakedown had worked once again.

Some of the blame with regards to corporations funding of left-wing groups may fall on the regulatory policies themselves. Christopher Yablonski, from the CRC, states, “Regulatory policies often give corporations a built-in incentive to pay-off left-wing activists. For example, the financial services industry has given generously to activist groups like ACORN. ACORN uses the federal Community Reinvestment Act (CRA) to pressure lending institutions into making low-interest loans.” “By threatening to use CRA provisions to hold up federal approval of bank mergers and acquisitions,” Yablonski continued, “ACORN, its affiliates, and other ACORN-like groups have forced banks to make billions of dollars in high-risk loans. These agreements often include hefty pay-offs to activist groups that file the complaints. In 1996, ACORN affiliates across the country secured nearly $570,000 in contributions from leading companies—a 40 percent increase over 1995.”

Whether or not companies willfully donate to left-wing groups or yield to leftist pressure is irrelevant to the homebuyers, as well as shareholders who may not know this is going on. The fact that many homebuyers and investors are unaware that this political funding takes place is attributed to the clandestine nature of these transactions. Yablonski explained, “Corporate leaders who unwittingly or secretly fund a political agenda of new regulations, increased taxes, and government spending on ineffective social programs are cheating their shareholders. It is not surprising that many companies are unwilling to tell their shareholders about their giving. Yet corporate philanthropy deserves shareholder scrutiny. Every corporate dollar given to nonprofits is a dollar not directly reinvested in the company. Because a corporation’s principal aim should be to serve shareholders’ interests, it should be open about its grantmaking – and its reasons for grantmaking.”

Further adding to Freddie Mac and Fannie Mae’s ensuing calamity is that the accounting practices of both companies have recently come under intense scrutiny. Although the scandals of Enron and Tyco shook much of the country’s financial market to its core, those events may prove merely a hiccup to the possible earthquake building in the accounting offices of Freddie Mac and Fannie Mae. Freddie Mac’s woes came to a head last year. Despite the firing of its President, David Glenn, for questionable earning statement mismanagement, the Securities and Exchange Commission opened a formal inquiry into possible unlawful intentions surrounding the corporation’s inexplicable financial records. This fact alone caused stocks to plummet, and may prove downright menacing upon further criminal investigation.

Whereas the Enron and Tyco woes were localized to the shareholders and employees of the companies, the taxpayers themselves will feel a possible Freddie Mac or Fannie Mae scandal. Both corporations receive over $2 billion in credit from the United States Treasury, and taxpayer subsidies of an estimated $10 billion.

The house that Freddie Mac and Fannie Mae have built is now a shambles, with its drains siphoning money into the pockets of radical leftist groups, all the while teetering on a potentially catastrophic accounting scandal. The fact that both of these companies, and others like them, continue to fund such groups as the Center for Policy Alternatives and ACORN is evidence of a growing epidemic in which both stockholders and everyday taxpayers know little of where their money is truly going.
 
The next time you’re researching refinancing your home or purchasing some mortgage-backed securities, you should know you may also be financing radical leftists through Freddie Mac and Fannie Mae.

You may e-mail Thomas Ryan by clicking here.


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