The current financial crisis was sparked by the failure of the huge government backed mortgage companies Fannie Mae and Freddie Mac whose fraudulent accounting practices and willingness to encourage banks to make bad loans to people who could not afford them have undermined faith in the financial sector of the U.S. economy.
Caught in this mess are millions of Americans who have either had their homes foreclosed or whose investments or employment with the affected banks, mortgage companies and investment houses has come crashing down.
All Americans are affected by the downturn in the economy caused by this crisis and leaving taxpayers left to clean up the mess estimated to cost $150 billion or more.
It's a financial crisis that was avoidable and that's where the scandal comes in. And the responsibility should be placed squarely on the Democrats who milked this financial cow for their own enrichment while ignoring the growing dangers.
Worse than ENRON
The fraudulent accounting that allowed Enron executives to enrich themselves and led the company to bankruptcy and the loss of $68 billion in employee and investor assets is dwarfed by that at Fannie Mae and Freddie Mac whose loses to investors will top $103 billion. Fannie Mae's accounting fraud was $11 billion, 19 times larger than Enron's $567 million accounting restatement.
Enron 's CEO Jeff Skilling went to jail and Chairman Ken Lay died, probably as a result of the stress from prosecution. Both Franklin Raines and James Johnson , CEO's of Fannie Mae, who played key roles in previous Democrat administrations were fired, but later went to work for the Obama campaign. Clinton Deputy Attorney General Jamie Gorelick also was a highly paid executive at Fannie Mae but left to join the 9/11 Commission (she was chiefly responsible for the wall that prevented law enforcement and intelligence agencies from sharing information). Gorelick is considered as a possible Attorney General in an Obama Administration.
News organizations which ran daily stories linking the Bush Administration to Enron executives have been nearly silent on the direct, long term political connections between the Fannie Mae disaster and Democrats.
Both Fannie Mae and Freddie Mac used $174 million, to pay for lobbyists to insulate them from the tightened regulation and oversight that might have avoided this crisis. And it won't surprise many readers to learn that Obama received over $126,000 in campaign contributions since first running for the Senate in 2004. Obama ranked #2 on the list which includes mostly Democrats. By comparison, McCain received $21,550. Other top Democrats on Fannie Mae's money list include Senator Chris Dodd, who received a favorable loan from a related mortgage company, John Kerry, Hillary Clinton, Harry Reid and Nancy Pelosi.
David Frum summed it all up in three sentences:When will the hearings start? When will a special prosecutor be appointed? Don't hold your breath. Remember: this is a Democrat scandal!
Here is potentially the largest financial disaster in American history. The American taxpayer stands to lose billions; Democratic insiders have extracted tens of millions. If Enron was a party scandal ... what is this?