Rep. Barney Frank, D-Mass., has admitted that he “helped his ex-lover land a lucrative post with Fannie Mae in the early 1990s while the Newton Democrat was on a committee that regulated the lending giant,” the Boston Herald reported on May 26.
Frank dismissed questions about the “potential ethical conflict,” of regulating Fannie Mae while Herb Moses, whom Frank has called his “spouse,” worked there from 1991 through 1998.
The New York Times reporter Gretchen Morgensen was the first to report Frank’s role in helping Moses get the job at Fannie Mae, according to the Herald. The Boston paper also reported that in a May 24, radio interview on WBUR’s “Fresh Air,” Morgensen said Fannie Mae “rolled out the red carpet” for Moses to “curry favor with Frank and other members of the Financial Services Committee."
Frank has opposed reforming Fannie Mae and its counterpart Freddie Mac for years, particularly when Bush administration sought reforms. The Business & Media examined media coverage of Frank in 2008 during the economic crisis and found the media were ignoring the conflict of interest angle in interviews with the Massachusetts congressman.
Between Jan. 1, 2008 and Sept. 21, 2008, Frank made eight television appearances on the three broadcast networks. Neither Frank’s relationship with Moses, nor his coziness to Fannie Mae while he was overseeing them came up in those interviews.
The news media have covered Frank’s relationship with Moses, but between 2005 and the time of BMI’s analysis there had been no mentions, according to Nexis and despite the collapse of Fannie Mae.
Between 1989 and 2008, Frank received more than $40,000 in campaign donations from Fannie Mae.
Frank was serving on the House Banking Committee the entire 10 years he was involved with Moses. That committee is the primary House body that, along with the Office of Federal Housing Enterprise Oversight (OFHEO), has jurisdiction over the government-sponsored enterprises Fannie Mae and Freddie Mac.
He served on the committee since becoming a congressman in 1981 and became the ranking Democrat on the committee in 2003. He became chairman of the committee, now called the House Financial Services Committee, in 2007.
Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).
“Herb Moses, who helped develop many of Fannie Mae’s affordable housing and home improvement lending programs, has left the mortgage industry,” Darryl Hicks wrote for NMN. “Mr. Moses - whose last day was Feb. 13 - spent the past seven years at Fannie Mae, most recently as director of housing initiatives. Over the course of time, he played an instrumental role in developing the company’s Title One and 203(k) home improvement lending programs.”
Yet even in the wake of the housing and mortgage crisis, the networks failed to examine the role powerful regulators like Frank may have had in creating the mess.