McLean, Virgina-based mortgage giant ""Freddie Mac"":http://www.freddiemac.com has hired a team of lawyers to investigate the company's own lobbying efforts. Under scrutiny is a campaign that tallied $2 billion, and according to an _""Associated Press"":http://www.ap.org_ report, helped suppress proposed regulations aimed at the GSE before the housing market collapsed.
Freddie Mac was placed under government conservatorship last September with Treasury funding to prop up the institution. _AP_ said that it is not clear how much Freddie is spending to investigate its own conduct or whether it is using any federal bailout money on the internal probe.
As part of the inside investigation, attorneys from Washington's ""Covington & Burling LLP"":http://www.cov.com/ have been questioning current and former Freddie Mac employees since January about the lobbying effort. The inquiry is being led by the firm's former Justice Department prosecutor Stephen Anthony, who specializes in corporate internal investigations.
_""National Journal"":http://undertheinfluence.nationaljournal.com/_ magazine, a publication dedicated to the lobbying and advocacy industry, points out that the investigation comes not long after media reports began circulating that Freddie Mac secretly hired Republican consulting firm ""DCI Group"":http://www.dcigroup.com/ of Washington to stop a proposal in the Senate in 2005 sponsored by Sen. Chuck Hagel (R-Nebraska), that would have spurred massive changes in the portfolios held by Freddie and its sister company ""Fannie Mae"":http://www.fanniemae.com.
Sources familiar with the internal inquiry at Freddie Mac told the _AP_ that attorneys are looking into three particular issues:
- Work done for the $2 million in payments to the DCI Group, whose efforts targeted 17 Republican senators in 13 states and sought to defeat Hagel's regulatory legislation by convincing constituents and financial contributors the bill would hurt the housing boom. The measure was never brought to a vote.
- Six-figure payments to 52 outside lobbying firms and political consultants in 2006, including details about what work, if any, the consultants performed for the $11.7 million paid to their firms. The consultants included former House Speaker Newt Gingrich and ex-Sen. Alfonse D'Amato.
- Personal use of company-paid tickets and a company skybox at the Verizon Center by Freddie Mac executives.
According to a report in 2008 in _""USA Today"":http://www.usatoday.com_, over the past decade, both Fannie and Freddie made the list of Washington's top 20 lobbying spenders. During that time, the paper said, the two GSEs spent a combined $170 million to pull lawmakers and regulators into their corners.