Freddie Mac and “Stealth Lobbying”

The Post reports that Freddie Mac is undertaking an internal investigation into alleged “stealth lobbying.”

The inquiry inside Freddie Mac follows stories by the AP about the company secretly hiring Republican consulting firm DCI Group of Washington to stop a proposal in the Senate in 2005 sponsored by Sen. Chuck Hagel, R-Neb. The legislation would have forced Freddie Mac and Fannie Mae to sell hundreds of billions of dollars worth of assets from their portfolios of mortgages and mortgage-backed securities. At the time, the portfolios were highly lucrative but their value plunged when the housing market collapsed.

The DCI Group did not file lobbying reports describing the work it was performing. At the time, Freddie Mac executives who knew about the initiative referred to it among themselves as “the stealth lobbying campaign,” according to people familiar with the matter. DCI Group spokesman Geoffrey M. Basye says the firm practiced the highest ethical standards and coordinated with Freddie Mac’s lawyers to ensure uncompromising compliance with all applicable federal and state laws and regulations.

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