Freddie Mac Fined For Campaign FundingScheme
WASHINGTON - (04/19/06) -- The Federal Election Commission saidTuesday it fined Freddie Mac a record $3.8 million for an illegalcampaign financing scheme that helped raise millions of dollars forcongressional allies. The secondary mortgage giant used corporateresources between 2000 and 2003 to sponsor 85 congressionalfundraisers its chief lobbyist described as "political riskmanagement" that raised at least $1.7 million for federalcandidates, the FEC said. The fundraisers were organized byMitchell Delk, Freddie's then-chief lobbyist, and former VicePresident Clark Camper, and were held at Washington's Galileorestaurant. They mostly benefited members of the House FinancialServices Committee, which has key jurisdiction over legislativeissues relating to Freddie Mac, including the ongoing efforts toreform the secondary mortgage market. In addition, Freddie Macexecutives used corporate staff and resources to solicit andforward, or "bundle," contributions from company employees tofederal candidates, in violation of federal law. Freddie alsocontributed $150,000 to the Republican Governor's Association in2002, which the RGA later returned. As a government sponsoredenterprise Freddie Mac is prohibited from making any campaigncontributions, but must do so through a political action committee,and FEC regulations bar a corporation from facilitating or actingas a conduit for campaign contributions. Freddie and its sistersecondary market giant, Fannie Mae, have been engaged in a massivelobbying effort the past five years to defeat or limit anypotential reform to the secondary market proposed byCongress.