Why Barney Frank resisted additional regulation of Fannie Mae

By Ethel C. Fenig

While Bill O'Reilly absolutely exploded at Rep. Barney Frank (D-MA) on his Fox news show The O'Reilly Factor, screaming at him, "Shouldn't everybody in the country be angry with you right now?" - while asking Frank to remove himself as chairman of the House Financial Services Committee, which oversaw Fannie Mae and Freddie Mac, O'Reilly was uncharacteristically reticent about another factor in Frank's personal life which bear upon these institutions.

What a shame.

Bill Sammon of Fox News explains

Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.

And they have every reason to be skeptical; Moses and Frank were lovers who lived together from 1987 until 1998.

"It’s absolutely a conflict," said Dan Gainor, vice president of the Business & Media Institute. "He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?

"If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane," added Gainor, a T. Boone Pickens Fellow. "But everybody wants to avoid it because he’s gay. It’s the quintessential double standard."

Double standard? The standard for the first declared gay Democratic Congressman and a gay lover involved in a financial meltdown under a Republican president's term is to knock the Republican president, as did the first female Speaker of the House, Rep Nancy Pelosi (D-CA), or to ignore it, as did most of the MSM.

Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants. In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.

Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank.

Although fairly silent then

Clinton now blames such Democrats for planting the seeds of today’s economic crisis.

"I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac," Clinton said recently.

Tighten up a little? (I will bravely resist heterosexual jokes about this even though Clinton was well...having heterosexual problems of a different sort regard then.) Clinton and the Democrats totally succumbed and demanded that these institutions write more and more shaky mortgages as a matter of social justice under the Community Reinvestment Act.