Dogged by Leading Role in Mortgage Meltdown, Andrew Cuomo Personifies Democrats’ Reversal of Fortune
With despair gripping New York Democrats over ethical scandals claiming Governor David Patterson, Rep. Charlie Rangel (D-NY), and Rep. Eric Massa (D-NY), New York’s Attorney General Andrew Cuomo cuts a heroic figure as the presumptive heir to the governorship.
But catching up with Cuomo is his relationship with the mortgage meltdown that nearly destroyed the American economy. Appointed by Bill Clinton as secretary of the U.S. Department for Housing and Urban Development (HUD), Andrew Cuomo has been called “the father of the subprime crisis” for the policies he orchestrated.
It was Cuomo’s directives that mandated HUD to vastly increase the amount of risky home loans bought by quasi-governmental housing giants Fannie Mae and Freddie Mac. Now, Cuomo may be haunted by his tenure as HUD secretary, where he planted the seeds for the nation’s housing collapse.
Though America’s financial fortunes suffered after Cuomo’s time at HUD, his own personal fortune soared. The bulk of this financial “windfall” came courtesy of Andrew Farkas, the billionaire real estate developer who helped Cuomo amass his wealth as a business partner and campaign fundraiser. Farkas — now Cuomo’s financial chairman as he circles the governorship — has personally given Cuomo at least $1.8 million in cash.
As New Yorkers are beginning to discover, Andrew Cuomo personifies the long reach of many at the top of the Democratic Party who built their fortunes on the mortgage bubble and the sub-prime collapse, but have yet to be tarred and feathered as architects of the nation’s worst housing crisis.
Cuomo’s heavy reliance on funds raised from big players in New York real estate, analyzed in detail by the New York Times this January, “hasn’t drawn much scrutiny yet, but it will,” said Blair Horner, legislative director at NYPIRG, the New York Public Interest Research Group, in an interview with Pajamas Media. “If and when he announces as a candidate for governor, because it’s obviously an issue that the public deserves to have explored.”
Notably, another recipient of largess while Cuomo was HUD secretary is current White House Chief of Staff Rahm Emanuel. Clinton appointed Emanuel to the board of Freddie Mac while Cuomo headed HUD. Both Cuomo and Emanuel turned their privileged positions atop the nation’s mortgage finance system into opportunities for quickly amassing personal wealth, which they then leveraged into greater political power....
In Bid To Reform Fannie and Freddie, Obama Can’t Shake Crony Clintonistas Who Caused the Mess
But while the GSEs went belly-up, costing Americans dearly, the fortunate few sitting on their Boards of Directors got filthy rich. These same directors — some of the biggest names in Democratic Party politics and business — failed spectacularly to fulfill their fiduciary obligations.
As it turns out, former President Clinton packed the boards of Fannie Mae and Freddie Mac with virtually as many personal allies and beneficiaries as they could hold. The most visible was Franklin Raines — Fannie Mae chairman, CEO, and former Clinton budget chief — who later resigned in disgrace with a multi-million parachute.
And then there’s President Obama’s current White House Chief of Staff Rahm Emanuel, who served on Fannie Mae’s board for a mere 14 months and raked in a cool $320,000.
Clinton also packed the Fannie board with Democratic Senator and “Keating Five” defendant Dennis DeConcini. Hillary Clinton’s confidante Jamie Gorelick got a prized seat, as did Bill and Hillary favorite Harold Ickes, Democratic strategist.
A federal report by the Office of Federal Housing Enterprise Oversight condemned the boards of both Fannie and Freddie, calling their actions contributing to the housing meltdown “malfeasance.” Freddie Directors like Emanuel were blasted for failing to confront the “management issues that were root causes of many of the problems that led to the ongoing restatement of the financial reports of the Enterprise,” and permitting management to profit from cooking the books to the tune of $5 billion in 2003 alone.
But even a brief stay on the Fannie or Freddie Boards was its own source of fat profits. Among the rewards for Democratic Party “public service,” a lucrative board membership on Fannie and Freddie was considered the Taj Mahal of plum positions. Now, as the housing market limps forward and there are warnings of a new wave of foreclosures, the culpable coterie remains largely anonymous.
What’s more, this group of lifetime political hacks puts the Obama administration at risk, just as it struggles to forge a way forward through the financial wreckage wrought while America’s wealthiest, most powerful Democrats made their careers.
Rahm Emanuel has come under particular scrutiny, with a series of reports by the Chicago Tribune making waves across the Internet. The inexperience and poor management of former HUD Secretary Andrew Cuomo is already well documented....