Barney Frank (D-MA) and Finance – Latest Political Peccadillo with Yet another Failed Institution Brought to Light.

Frank and Paulson image Politico

Barney Frank, (D-MA) the House Committee on Financial Services is apparently responsible for using his influence to prop up yet another failed institution with taxpayers dollars. Frank, who is up for reelection in 2010, is best known for his association and support of Fannie Mae and Freddie Mac, the federal lending giants, who were, in a greater part, responsible for the current financial crisis.

In 2003, several Congressional Representatives and Senators were concerned about the stability of those two institutions, and had called for a review, Frank, who was, at the time merely the ranking Democrat on the Finance Committee, appeared to feel all was well with the lenders: see excerpt here from the New York Times Business Section:

Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.''
The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.
Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.
''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

One should also note that Frank recently received a reelection bid endorsement from Bank of America president, Chief Executive Officer Brian Moynihan. In a recent article from the Financial Times, Frank had asked four banks (Bank of America included) to modify their lending practices and write down second tier mortgages, in other words, take a loss, “in order to save U.S. Housing. This was in March of 2010.

With his hands in every nook and cranny of the financial industry, Frank is now facing some scrutiny over a direct intervention with then Treasury Secretary Paulson, to save a failed bank in his district. Although one might argue that the Congressman was doing his job by taking care of an industry specific to the 4th Congressional District, emails and documents obtained under the Freedom of Information Act by the watchdog group Judicial Watchsuggests otherwise.

First, the bank did not meet criteria to be included in the program, it was under an Cease and Desist order: (From www.fdic.gov/bank/individual/enforcemnet/2008-10-09)

OneUnited Bank, Boston, Massachusetts ("Bank") and its institution-affiliated parties, as that term is defined in section 3(u) of the Federal Deposit Insurance Act (“Act”), 12 U.S.C. § 1813(u), and its successors and assignees having been advised of its right to a Notice of Charges and of Hearing detailing the unsafe or unsound banking practices and violations of law alleged to have been committed by the Bank and of its right to a hearing on such alleged charges under section 8(b)(1) of the Act, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with counsel for the Federal Deposit Insurance Corporation ("FDIC") and the Commonwealth of Massachusetts
The FDIC and the Division considered the matter and determined that it had reason to believe that the Bank had engaged in unsafe or unsound banking practices and violations of law. The FDIC and the Division, therefore, accepted the CONSENT AGREEMENT and issued the following:
ORDER TO CEASE AND DESIST



Apparently, Barney Frank brought pressure to bear on the Treasury in order to allow OneUnited to receive Tarp Funds. Frank, not alone in this endeavor was joined by Congressional Representative Maxine Waters (D-CA), whose husband was affiliated with that institution. Both Frank and Senator John Kerry (D-MA) were mentioned in documents obtained by Judicial Watch.

Accountability and elementary accounting practices appear to have gone missing from the Chairman of the Committee that oversees Banking and Finance for the nation. That said, what one can expect to come out of this particular brouhaha is yet another “Charlie Rangel” – by that, individuals who have committed dubious acts, even scandalous acts, who have managed to hold onto their Committee Chairs and seats, by virtue of the insanity that pervades in the Capital. It took decades before Rangel was held somewhat accountable, therefore, one can expect Frank to continue to skate, with the help of Pelosi and Company – unless and until Frank is no longer eligible to sit on a Committee that has, perhaps the greatest impact on our economy. The only way to permanently ensure that Frank can no longer be an influence is to effectively remove him from office via the ballot box. To allow him to remain in office, only puts his Chairmanship on hold – (assuming the Congress changes political power hands in 2010), he would still be sitting on that Committee.

The power of the ballot must be brought to bear in order to permanently remove Frank from the vicinity of the House Committee on Financial Services by the 4th District voters themselves, electing an alternative to Frank. A new radio commercial from the Sholley for Congress Campaign hits the nail on the head (see YouTube video below). It is imperative that the citizens of the 4th Congressional District get to know Mr. Frank and his impact on the nation – to learn more about voting in Massachusetts visit the Massachusetts Secretary of State’s website on Elections.

Barney Frank – MSNBC The Ed Show Trancript “We Are Trying On Every Front To Increase Government in the Regulatory Area” - Frank's 2010 Opposition

A video surfaced yesterday from an MSNBC program via Real Clear Politics - in the video Ralph Nader and Barney Frank, Massachusetts 4th District U.S. Representative, have a back and forth on the regulation of derivatives. Simply put, a derivative,

“Derivatives are financial products, such as futures contracts, options, and mortgage-backed securities. Most of derivatives' value is based on the value of an underlying security, commodity, or other financial instrument.
For example, the changing value of a crude oil futures contract depends primarily on the upward or downward movement of oil prices.
An equity option's value is determined by the relationship between its strike price and the value of the underlying stock, the time until expiration, and the stock's volatility.
Certain investors, called hedgers, are interested in the underlying instrument. For example, a baking company might buy wheat futures to help estimate the cost of producing its bread in the months to come.
Other investors, called speculators, are concerned with the profit to be made by buying and selling the contract at the most opportune time. Listed derivatives are traded on organized exchanges or markets. Other derivatives are traded over-the-counter (OTC) and in private transactions.”

Nader speaks to Frank about his role in the deregulation of mortgage securities, (Fannie Mae, Freddie Mac), and goes on to blast him for his support of a bill that allows exceptions on categories of these derivatives.

This is an abridged transcript (given Rep. Frank’s “unique style of speaking”):

Nader: “In 2000 you voted for a bill that continued the deregulation of the burgeoning derivative racket and now he’s supporting a bill that has a huge loophole in terms of exempting trillions of dollars in certain categories of derivatives, and he hasn’t (interruption from Frank) he didn’t support a categorical ban on the use of derivatives”

Frank: Well first off all Ralph - (*insults)
“I had overwhelming Republican opposition to any regulation of derivatives and some democrats - we fought hard for it – we are establishing a great framework for the regulation of derivatives – we are moving forward in that ad we’ve done as much as we can politically - the fact is we had a political situation – the real irony – the right wing took control of government and ruined it they gave it a bad reputation and now that “we are trying on every front in to increase the role of government in regulatory area”, we run into this public opinion that says hey, those are the guys that screwed up Katrina so the frustration is that they are benefiting from their own (word could be) incompetence.”

“We are trying on every front to increase the role of government in the regulatory area”

One comment appeared on Real Clear Politics that sums that statement up nicely: “Power deludes and absolute power deludes absolutely.

The Bill over which Ralph and Frank were arguing:
An article explaining the bill which passed the House, from DSNews, (here) goes into some depth explaining how the bill is “watered-down”, and goes into the exceptions referred to by Nader.

Barney Frank, whose memory is on any given day, either selectively partisan, selectively self-serving, has not acknowledged at any time, that there was opposition to his continued support for continuing deregulation, he is also holding fast to partisan speak – 2010 is an election year, and Frank does face opposition in his district.

Barney Frank on the Campaign Trail (since 1972) Faces Opposition from one Conservative – Earl Sholley and one “Republican”, Keith Messina. Messina, who originally began his campaign as an Independent, has since jumped onto the “Republican” label. Messina however, is not a conservative. (Shades of the New York 23rd!)

Frank has decided to take his campaign online: In a recent series of videos, Frank answers questions on issues that were presented through the blog Reddit.com In Frank “speak” – one of the 5 videos are featured below – the balance are on YouTube here From why the Lesbian and Gay Community should not bother with protests, to why the Democrat Controlled Congress with a like minded President have not made good on their campaign promises, Frank goes into detail to “explain”.




Frank faces opposition in the 4th District from Earl Sholley, a conservative populist candidate running as a Republican. Sholley has his own campaign videos on YouTube, which appear to speak in plain language, about common sense solutions, and without partisan diatribe.



Keith Messina , a newly minted Republican candidate for the 4th Congressional district, has a video below. In a recent article from the Boston Globe, Mr. Messina “promised a fresh perspective” and went on to say that he “supports federal recognition of same-sex marriage.”



Since 1972 Barney Frank has developed a left-of-center reputation and been responsible for legislation and oversight that has not only impacted his own district, but the entire nation. The voters in the 4th district have choices - (see above), there is simply no excuse for those in the 4th to continue to impose this brand of politician on the rest of the country. Those outside the state of Massachusetts are encouraged to donate to the opposition cadidate of your choice. Research is suggested.

Barney Frank – New Requests to Freddie and Fannie to Relax Lending Practices – Frank has a Challenger for his 4th District Seat in 2010 .

Barney Frank, Massachusetts 4th District, U.S. Congressional Representative, has a long history with the nations federal loan arms that drove this nation into financial chaos, one would think, Mr. Frank would have learned his lesson at this juncture – not so. Frank, known financial genius, has meddled in TARP funds (no need for transparency), and specifically Freddie and Fannie where Congressman Frank held that the lenders were financially sound, despite the Bush Administrations questions regarding solvency. Additionally, Frank was part and parcel of the push to relax lending regulations in order to make housing “more affordable” to those who could not afford a mortgage in the first place. Now, Frank is after them again, this time regarding the lenders tightening of mortgage lending practices where condominiums are involved. Condominiums and lending practices have been fairly consistent with most lenders over the past several decades - there is a certain threshold of units sold, within a development, where lenders will guarantee mortgages – that threshold has been 70%. Freddie and Fannie were at 51% which is below the national average to begin with. The reason that lenders look at building occupancy is because it goes to the solvency of the entire condominium project, should the developers fail to sell up to 70% of the units, more trouble assets are likely to occur. Frank looks at it a bit differently, perhaps because the real estate industry is one of the top 5 contributors to Mr. Franks campaign.

Mr. Frank made an appearance on Fox News, Bill O’Reilly show last evening. In the interview, Frank insisted that the crisis with Fannie and Freddie was the fault of the Bush administration, and held that he, not the Bush administration, insisted on tightening guidelines for Freddie and Fannie – apparently, Mr. Frank either has loss of memory, or honestly believes that the nation is going to buy his “story”. The overall interview, on topics ranging from Gay Marriage to how Obama plans to pay for Nationalized HealthCare were rife with “Frankisms”, all being rosy on all fronts, virtually pulling figures out of thin air when asked about paying for the Health Care Plan. Specifically motioning the cutting the military budget, in regards to a program that is no longer relevant, and using that money, among funds from “agriculture”, to pay for Obama’s Health Care Plan. The program that Mr. Frank is keen on cutting, would account for approximately 400 million dollars, the Health Care Plan is projected to be in the trillions over a 10 year period. Additionally, Mr. Frank noted that the Massachusetts Health Care Program, which is a huge drain on the Massachusetts Taxpayer (as it has been in the red since inception), was not a problem. Mr. Frank not only is apparently clueless when it comes to Federal Programs, but Programs that are currently in force in his own state.(video below)


Barney Frank who is up for re-election in 2010, (and apparently campaigning see rather non-confrontational, out of character, Frank with Bill O’Reilly), does have a challenger in the 4th district - America take heart. Although no official release has been made, Earl Sholley, a businessman with a strong, fiscally conservative background, will be the candidate to watch in the 4th Congressional race. Sholley is the Anti-Frank, so to speak, a breath of fresh air for the 4th District and the nation. To learn more about Mr. Sholley and his campaign, visit Sholley For Congress. What American needs now, more than ever, is an alternative to Barney Frank, one who has some senses of business rather than being a “career politician”.