Conflict of interest? Definitely.
U.S. Rep. Barney Frank admitted 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 — but he called questions of a potential ethical conflict “nonsense.”
“If it is (a conflict of interest), then much of Washington is involved (in conflicts),” Frank told the Herald last night. “It is a common thing in Washington for members of Congress to have spouses work for the federal government. There is no rule against it at all.”
The bubble was also fueled by pressure on Fannie and Freddie by members of Congress who insisted on home ownership for everyone. These factors allowed for the creation of more mortgage investment instruments, and more insurance swaps to hedge against the collapse that few thought would ever happen.