The Office of Federal Housing Enterprise Oversight determined in 2004 that Fannie Mae's management engaged in a pervasive misapplication of its accounting rules. In 1998, Fannie deferred $200 million of estimated expenses to create the illusion of profit to justify enormous bonuses to management. The regulators cited Fannie's management for smoothing out swings in its earnings, presumably to deceive investors into believing Fannie was a low-risk company. Regulators also condemned "a culture and environment that made these problems possible." Fannie CEO Franklin Raines, a bosom buddy of Obama's whose dirty hands were all over this scandal, was forced to return millions of dollars for his "alleged" responsibility for the improper accounting practices.
Both Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow called for tougher oversight of Fannie and Freddie as early as 2004 because the magnitude of Fannie's operations coupled with their serious financial difficulties could put the nation's financial system at risk.
Republican members of Congress pushed for remedial action based on those warnings, but the very Democrats pointing their fingers today at President Bush, Republicans and capitalism openly, vehemently and nastily opposed their noble efforts.
The always-sanctimonious Barney Frank said: "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies the less we will see in terms of affordable housing."
Watch the YouTube video and see Frank, Maxine Waters, Gregory Meeks, Lacy Clay and Franklin Raines himself denying there was a problem and bludgeoning Republicans and regulators for trying to solve it. In exchange, the Democrats' corrupt gravy train -- political contributions in exchange for CEO bonuses -- continued unabated.
After highlighting all of this and pinning the financial-crisis tail squarely on the "donkey," McCain must then proceed, unabashedly, to tie Obama to the Association of Community Organizations for Reform Now, Obama's socialist community organization of choice. McCain must detail ACORN's complicity in creating this crisis when it forced an epidemic of politically correct, but woefully un-creditworthy loans. And he must show how until the very end, unrepentant and unaccountable Democrats tried to funnel 20 percent of the originally proposed $700 billion of "bailout" money to ACORN and its cousins.
Time for some straight talk, senator. And please, don't hold back.