Published November 16, 2011
With his rise to the top of the polls alongside perennial front-runner Mitt Romney, latest Republican presidential comer Newt Gingrich is facing fresh scrutiny over what exactly he did for Freddie Mac that earned him nearly $1.6 million over eight years.
Gingrich, who is head of the Gingrich Group, said he "offered strategic advice over a long period of time."
However, the description of Gingrich's services to the mortgage giant has changed with the questions of the past week. Last week at a Republican presidential debate, Gingrich claimed to have been Freddie Mac's resident historian, and something of a seer.
"My advice as a historian, when they walked in and said to me, 'We are now making loans to people who have no credit history and have no record of paying back anything, but that's what the government wants us to do.' As I said to them at the time, 'This is a bubble. This is insane. This is impossible,'" he said.
By Monday of this week, Gingrich was revising, though not extending, his remarks.
"I also want to say that there's a confidentiality agreement there that I can't go into detail with," he told Fox News' Sean Hannity.
A source with Freddie Mac familiar with the arrangement told Fox News that Gingrich was hired as a consultant, not a historian, and he never advised the organization on credit risk.
"He was hired because he was Newt Gingrich, basically," the source said.
Gingrich has catapulted into the top tier of Republican candidates for president, even notching a slight lead over steady front-runner Mitt Romney in the latest Fox News poll. The poll found 23 percent of voters now support Gingrich, while 22 percent picked Romney.
On Wednesday, Gingrich's staff offered a fuller picture of Gingrich's activities after a Bloomberg article revealed that he made about five times more than what was originally stated as a $300,000 income in 2006.
"Gingrich was given a briefing by one of the company's economists," spokesman R.C. Hammond told Fox News. As for claims Newt never flagged to Freddie that a bubble was coming, Hammond said that Gingrich's reaction after the briefing was "that's a bubble. You are creating a bubble." Though he never told the CEO directly, he did tell the company representative.
Hammond added that a dozen companies hired Gingrich to provide similar consulting as provided to Freddie, and in almost all cases the client would provide challenges and he would give advice to them on how to solve that problem. The Gingrich Group had contracts with Freddie Mac starting in 1999 but none with Fannie. The amount paid was similar to the figure he got from other companies he consulted for during that time.
Freddie itself had a robust internal and external government affairs division on the 1990s and hired a number of outside firms for lobbying and consulting services, of which The Gingrich Group was one. In 2008, Freddie fired all of its external lobbyists and dramatically pared back its internal shop.
While no one has accused Gingrich of lobbying for the government-sponsored enterprise, Hammond reinforced that notion that The Gingrich group is not a lobbying shop and Gingrich made a point after resigning from Congress that he would never be a lobbyist so no would would question the nature of his advice and perspectives.
"This prohibition against lobbying was made very clear to all Gingrich Group clients, and strict internal protocols were developed to prevent lobbying," the campaign said in the fact sheet.
It added that Freddie Mac was a small part of the client and revenue base of The Gingrich Group and Gingrich's various small businesses.
Speaking last week, Gingrich said that having spent the last 12 years out of Congress, he has run four small businesses, written several books and made several speeches
"So you can look at that say, you know, he understands the private sector," he told Fox News.
But Gingrich has also sought to make a virtue of his being a creature of the capital, even as others take him to task for it.
"I know a great deal about Washington. And if you want to change Washington, we just tried four years of amateur ignorance and it didn't work very well. So having somebody who actually knows Washington might be a really good thing," he said.
Other candidates say that's not necessarily a trait they would promote.
"I'm standing up for the little guy in the United States. And I believe that Fannie and Freddie need to be shut down. I wasn't shilling for them; I was fighting ... them," said Minnesota Rep. Michele Bachmann, one of Gingrich's GOP opponents.