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Free Market Project

3/5/2006 5:36:16 AM

Updated 02/24/06
 


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Media Ignore Democratic Ties to Fannie Mae Scandal
Papers largely bypass Franklin Raines service in Clinton White House but focused on Enron ties to Bush.

By Ken Shepherd
Free Market Project
Feb. 24, 2006

Send this page to a friend! (click here)     After Enrons collapse, the media frequently reminded the public of political ties top executives in the failed energy company had to the Bush administration. The same standard, however, wasnt applied to mortgage broker Fannie Mae (FNM), whose former CEO served in the Clinton White House and was speculated to be on presidential hopeful John Kerrys short list for Treasury secretary. The print media continued that double standard in covering a comprehensive new report on the scandal released February 23 by former Sen. Warren Rudman (R-N.H.).

     Of the nations top five newspapers, only The New York Times mentioned Rainess Clinton connection. The Wall Street Journal didnt just ignore Democratic links to Fannie Mae, it reported on Republican connections. In the last paragraph of that story, reporter James R. Hagerty pointed out the strong ties between the chairman of gulf Bank and Florida Gov. Jeb Bush and linked that to a failed investment.

     New York Times correspondents Stephen Labaton and Eric Dash wrote that the February 23 report found Raines, a former chairman and chief executive who had previously served as a top official in the Clinton administration, contributed to a culture that improperly stressed stable earnings growth and that he hired and retained a management team that ... was inadequate and in some respects was not competent.

     The February 24 Washington Post business section featured three stories, all of which mentioned Raines, but not his political connections or campaign contributions. USA Todays Edward Iwata similarly left out Rainess politics while saying the report gave positive portrait of Fannie Maes board, clearing them of direct responsibility for the companys accounting troubles. The Los Angeles Times ran a Reuters article that similarly did not disclose that Raines served as director of the Office of Management and Budget in the Clinton White House.

     The Free Market Project  previously documented how much the media overlooked about Democratic connections to Fannie Mae. According to that April 2005 report: Former Chief Executive Officer Franklin Raines and former Vice Chairman Jamie Gorelick were both instrumental figures in the Clinton administration.

     The Rudman report, which was commissioned by Fannie Mae, can be found
here.

 


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