Newt Gingrich has plenty of skeletons in his closet that could derail his newfound momentum. But it’s his post-Speaker days as a high-paid GOP consultant for Freddie Mac that are proving the biggest threat so far.
On Wednesday, Michele Bachmann became the first Republican rival to lay into Gingrich over his reported $1.6 million payday.
“Fannie and Freddie, as you know, have been the epicenter of the financial meltdown in this country,” she told an Iowa crowd according to National Journal. “And whether former Speaker Gingrich made $300,000 or whether he made $2 million, the point is that he took money to influence senior Republicans to be favorable toward Fannie and Freddie. While he was taking that money I was fighting against Fannie and Freddie.”
How did we end up at this point? It all began on November 9 at a Republican debate hosted by CNBC when Gingrich was asked about old reports that he had received $300,000 from Freddie Mac in 2006 to help convince Republicans in Congress not to go after it.
“I offered advice,” he said, denying he had done any lobbying work. “My advice as an historian when they walked in and said we are now making loans to people that have no credit history and have no record of paying back anything but that’s what the government wants us to do. I said at the time, this is a bubble. This is insane. This is impossible. It turned out unfortunately I was right and the people who were doing exactly what Congresswoman Bachmann talked about were wrong.”
His response was a crowd-pleaser, but included a slew of assertions that later proved to be misleading at best and outright false at worst. Predictably, reports soon surfaced highlighting the contradictions and driving the story well into the next week.
First off, his “historian” role seemed to be more than a bit of a stretch. Freddie Mac acknowledged that his contract did not include lobbying work, but officials told Bloomberg he had been hired as a consultant specifically to convince Republicans who wanted to dismantle the mortgage giant to back off. Nobody had any memory of him warning about impending financial doom either. Meanwhile, lobbying watchdogs pointed out that his “consultant” title was commonly used by ex-politicians to avoid having to register as lobbyists while performing highly similar functions.
As more details emerged about his ties to Freddie Mac, Gingrich’s campaign became less witty and defiant in its descriptions of his work. Gingrich told The Huffington Post on Tuesday that he “offered strategic advice over a period of time” for Freddie Mac but couldn’t remember when or what he told them about the subprime mortgage crisis that would trigger a worldwide financial collapse in 2008.
Early the next day Bloomberg broke the news that Gingrich’s ties to Freddie Mac were far, far, more extensive and lucrative than anyone had known. Over a period of eight years ending in 2008 Gingrich had collected between $1.6 million and $1.8 million.
Worse, while there was little record of Gingrich publicly warning about an incoming mortgage crisis, Gingrich had plenty to say in late 2008 about other politicians who accepted political donations or consulting fees from Freddie Mac. First, he called for a Congressional investigation into lawmakers who had accepted their contributions. Later, he demanded that Democrats return any money they had received from Fannie Mae and Freddie Mac in light of the subprime mortgage disaster. He offered unsolicited advice to Republican presidential nominee John McCain urging him to attack President Obama over his Freddie Mac donations.
“I think Congress ought to also be under investigation,” he told Sean Hannity on FOX News. “If we’re looking at greed, let’s look at the politicians as well as the people who gave to them.”
Gingrich’s recollection of his old consulting gig grew hazier throughout the day.
“I have no idea about the details,” he told the New York Times’ Jeff Zeleny. “It was paid to Gingrich Group. Gingrich Group has many clients.”
In classic Gingrich form, he tried to spin his big money work for a mortgage giant that he and most of his rivals openly blame for a devastating recession as a net positive with the Republican electorate.
“It reminds people that I know a great deal about Washington and if you want to change Washington, we just tried four years of amateur ignorance and it didn’t work very well,” he said in Iowa. “So having somebody who actually knows Washington might be a really good thing.”
And while Gingrich told reporters on Wednesday that he’d release documents to clarify his role with Freddie Mac, his campaign opted instead for a “fact sheet” that evening that mostly restated his public account of his time there. His spokesman told the Des Moines Register that no further records were coming.
The whole episode is yet another reminder that Gingrich, despite his surge in the polls, is still relatively untested after being written off for dead early in the campaign. There are plenty of inconsistencies in his record that he’ll likely be forced to explain if he keeps up his frontrunner spot.
Benjy Sarlin is a reporter for Talking Points Memo and co-writes the campaign blog, TPM2012. He previously reported for The Daily Beast/Newsweek as their Washington Correspondent and covered local politics for the New York Sun.