WASHINGTON - Fannie Mae has added former Senate Banking Chairman Alfonse D'Amato to help the mortgage giant fend off attacks from lawmakers, regulators, and some lenders.
Fannie Mae spokesman David Jeffers said Friday that the government-sponsored enterprise hired New York-based Park Strategies, where the former New York Republican senator is a partner, about two months ago. Mr. Jeffers gave few details of the arrangement with Park Strategies or about Mr. D'Amato's specific role.
"We're facing a very well-funded, organized effort by some large banks to raise our costs and stifle our pro-consumer agenda, so the advice of this firm will be very important to us," Mr. Jeffers said.
Fannie Mae, the No. 1 buyer of U.S. home mortgages, is under attack from a lobbyist group called FM Watch, which includes some of the nation's largest mortgage lenders and insurers as well as from trade groups including the Financial Services Roundtable.
FM Watch contends that Fannie Mae and Freddie Mac - both government-chartered, shareholder-owned companies that buy mortgages and sell them as securities to investors - are too large. FM Watch also charges that the companies are expanding improperly into mortgage insurance and other new lines.
Representative Richard H. Baker, R.-La., has said that Fannie Mae, while financially healthy, is more leveraged than the failed hedge fund Long-Term Capital LP. Rep. Baker has introduced legislation that would sever a Treasury Department line of credit to the companies and create a single, more powerful regulator to oversee Fannie Mae, Freddie Mac, and other government-sponsored enterprises.
Fannie Mae already had a lobbying operation that was described as "superb'' by Prudential Securities Inc. analyst Chuck Gabriel, who recently told clients about the hiring of Mr. D'Amato.
Fannie Mae's management is a who's who of powerful Washington insiders. Its chairman, Franklin Raines, was President Clinton's budget director from 1996 to 1999, vice chairman Jamie Gorelick was the No. 2 official in the Justice Department from 1994 through 1997, and vice president Arne Christenson was chief of staff for former House Speaker Newt Gingrich.
- Bloomberg News