Gingrich Leaves Freddie Mac Contract Release to His Partners
Republican presidential candidate Newt Gingrich said today that he still can’t release his contract with Freddie Mac (FMCC) -- even though the mortgage finance company gave him permission to do so -- because the decision is up to his business partners in his consulting firm.
Gingrich’s comments came after Freddie Mac told Bloomberg News yesterday that the former U.S. House speaker was cleared to make the documents public. Before that, Gingrich said the reason he couldn’t release the contract was that Freddie Mac wouldn’t waive a confidentiality agreement.
Gingrich’s consulting firm was paid at least $1.6 million over eight years for his services.
Gingrich does not have the power to make decisions about releasing the contract because he is only one partner in the Center for Health Transformation, the consulting firm that he founded, Gingrich spokesman R.C. Hammond said in an interview today.
“It’s their decision,” Hammond said. “His partners have to sign off on it.”
The Center for Health Transformation will not release the documents today, Susan Meyers, the firm’s director of media relations, said.
Lawyers Still Deliberating
“The lawyers are still reviewing the files to see if it is possible to even release it at all based on the language of the consulting contracts signed long ago,” Meyers said in an e- mail.
Gingrich said in a Dec. 30 interview with Bloomberg News that his campaign had asked Freddie Mac to lift the confidentiality clause but “they wouldn’t do it.”
Freddie Mac Vice President Sharon McHale said in an interview yesterday that Gingrich was “welcome to release the contract.”
Gingrich has faced questions in debates from his Republican presidential rivals about his relationship with the mortgage finance company. Freddie Mac and its sister company, Fannie Mae (FNMA), have drawn about $153 billion in taxpayer aid since losses from risky mortgages caused them to be brought under U.S. conservatorship in September 2008.
The contract presumably would answer some of the outstanding questions surrounding the deal, including what Gingrich was paid and how much of it went directly to him. Since Bloomberg News first reported the story on Nov. 16, these accounts have varied, with the former speaker lately claiming his firm was paid at least $1.6 million while he personally only got about $35,000 a year.
Gingrich’s description of the work he performed has differed from that of company insiders.
During a Nov. 9 Republican debate, Gingrich initially said he was paid to offer Freddie Mac advice as a “historian” and warned officials that its business model was “insane.”
Former Freddie Mac officials familiar with Gingrich’s work for the company said he didn’t disparage their business model and instead was paid to build bridges to Capitol Hill Republicans and develop an argument on behalf of the company’s public-private structure that would resonate with opponents seeking to dismantle it.
The former House speaker, who didn’t register as a lobbyist, has a lot of attack TV ads about his relationship with Freddie Mac, which have coincided with a decline in his poll standings. He finished a distant fourth in the Jan. 3 Iowa caucuses, behind Massachusetts Governor Mitt Romney, former Pennsylvania Senator Rick Santorum, and Texas Representative Ron Paul, respectively.
From Dec. 1 through Dec. 29, 45 percent of all ads airing in Iowa highlighted Gingrich’s shifting policy positions and advocacy for Freddie Mac, according to data from New York-based Kantar Media’s CMAG, a company that tracks advertising. The commercials were financed primarily by Paul, Perry and an outside committee that backs Romney.
In the Dec. 30 interview with Bloomberg, Gingrich said he personally received only about $35,000 a year. The rest of the money went to his firm, he said.
According to three people familiar with Gingrich’s contract with Freddie Mac, the company was paying Gingrich’s firm only for the services of Gingrich himself, not for work by any of his staff.
Gingrich’s first contract with the mortgage company was in 1999, five months after he resigned from Congress and as House speaker, according to a Freddie Mac press release.
His consulting firm was paid a self-renewing, monthly retainer of $25,000 to $30,000 between May 1999 until 2002, according to three people familiar with aspects of the business agreement.
Gingrich’s second contract with Freddie Mac was a two-year retainer for which he was paid a total of $600,000, said two people familiar with the agreement.
Throughout the campaign, Gingrich has distanced himself from Freddie Mac, criticizing its business model and even suggesting some Democrats should be jailed for associating with the company’s officials at a time when the housing market (ETSLTOTL) was about to collapse.
“You ought to start with Barney Frank,” when talking about people to put in jail, Gingrich said during an Oct. 11 Republican presidential debate, referring to the Massachusetts congressman who serves as the ranking Democrat on the House Financial Services Committee. “Go back and look at the lobbyists he was close to at Freddie Mac,” Gingrich said in the debate, sponsored by Bloomberg News and the Washington Post.
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