F.O.F.—Friends of Fannie
By Gretchen Morgenson, 10.06.97
FANNIE MAE always seeks friends in high places. The Clinton Administration is packed with her pals: Three Cabinet members recuse themselves on matters relating to Fannie Mae, either because they have worked there or they have done business with the company. Goldman, Sachs has raised so much capital for FannieMae that Treasury Secretary Rubin has a potential conflict of interest. Commerce Secretary William Daley left the board of Fannie Mae only this spring; Franklin Raines, new head of the Office of Management &Budget, was vice chairman of Fannie Mae between 1991 and 1996. Ellen Seidman, a former special assistant to Fannie Mae Chairman James Johnson, is Clinton's nominee to head the Office of Thrift Supervision.
The Clinton Administration is not unique in this respect. Chairman and Chief Executive Officer James Johnson ran the Mondale for President campaign. Johnson says he has worked in five presidential campaigns since he was 18.
Vice Chairman Jaime Gorelick was, until 1997, a deputy attorney general at the Department of Justice. Robert Zoellick, one of Fannie Mae's executive vice presidents, was Bush's White House deputy chief of staff; board member Ann McLaughlin was labor secretary under Reagan. John Buckley, of Fannie Mae's public relations staff, was communications director for Dole-Kemp 1996.
William Maloni and Gerald McMurray, Fannie's in-house lobbyists, were Hill staffers; Herbert Moses, a Fannie Mae manager, is better known as the domestic partner of Representative Barney Frank, a member of the House Banking Committee. Fannie Mae Vice President Mary Cannon was an assistant secretary for public affairs at HUD under Jack Kemp.
Outside lobbyists/consultants retained by Fannie Mae include Michael Boland, a former aide to Senate Majority Leader Trent Lott; Vin Weber, a House member from 1980 to 1992 and cochair of the 1996 Dole-Kemp campaign; Lawrence F. O'Brien III, son of the former chairman of the Democratic National Committee; and Kenneth Duberstein, chief of staff under Reagan.
For years this sort of political clout has protected Fannie Mae. But times change. With so many of its friends susceptible to conflict-of-interest charges, they will find it increasingly difficult to protect the company's interests. Meanwhile, its outsize profits and privileged position make it an increasingly tempting target. -G.M.
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