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GSEs in the Hot Seat over Political Campaign Contributions

An activist group who says its purpose is to investigate and prosecute government corruption has instigated a federal court battle to get its hands on documents detailing the political contributions made by mortgage giants ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com.

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""Judicial Watch"":http://www.judicialwatch.org describes itself as a conservative, non-partisan public interest group and educational foundation that promotes transparency and accountability to ensure political and judicial officials don't abuse their powers. And the organization made it clear in a public statement issued Tuesday that it suspects something fishy related to funding provided by the GSEs' to support some of the nation's highest-ranking officials' rise to office.

Earlier this week, the watchdog group ""filed a new motion"":http://www.judicialwatch.org/files/documents/2010/jw-fhfa-opp2sj-cm4sj-03052010.pdf with the U.S. District Court for the District of Columbia in a Freedom of Information Act (FOIA) lawsuit against the GSEs' regulator, the ""Federal Housing Finance Agency"":http://www.fhfa.gov, that it says will force the Obama administration to release records of Fannie and Freddie's financial contributions to political campaigns.

According to Judicial Watch's statement, the FHFA says the GSEs' might possess documents responsive to the organization's initial FOIA request, but the regulator claims it is not obligated to release such documents to the public because they are considered private corporate records.

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But Judicial Watch maintains that since Fannie Mae and Freddie Mac are now wholly operated by the federal government, they are no longer private enterprises and therefore are subject to FOIA law, just like the records of any other federal agency. Judicial Watch filed its original FOIA request on May 29, 2009.

""Apparently, American taxpayers are paying the tab for the collapse of Fannie and Freddie, but are not allowed to ask any questions about why it happened,"" said Tom Fitton, president of Judicial Watch. ""There is nothing ambiguous about the government's absolute control of Fannie and Freddie. Which raises the question: What does the Obama administration have to hide?""

According to Judicial Watch's review of the top recipients of Fannie and Freddie campaign contributions from 1989 through 2008, President Obama is second on the list, sandwiched between Democratic Sens. Chris Dodd (first) and John Kerry (third).

Many in the industry are calling for the federal government to provide some sort of guidance on what it plans to do with the two mortgage giants, and it was widely expected that the president would at least allude to the GSEs' future during his address on the federal budget in February. But there was no mention of the two government-controlled enterprises. The omission sparked widespread speculation and criticism, and shortly after, Treasury Secretary Timothy Geithner announced that no plan for the GSEs would come until next year. That's after the Treasury skirted media attention last December with a Christmas Eve announcement that it was pledging ""unlimited support"" to the two companies over the next few years.

""Judicial Watch's effort to open up Fannie and Freddie to public scrutiny as the law requires is not just about political corruption - it['s] also about accountability,"" Fitton said. ""Largely through Freddie and Fannie, the Obama administration essentially has taken government control of the United States mortgage market and its attendant liabilities. This unprecedented takeover of the private sector is being executed by government entities that the Obama administration says are not subject to any open records request.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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