Newt Gingrich made some pretty bold claims at last week's Republican debate when asked about a $300,000 consulting gig he took with Freddie Mac in 2006. First off, he said, he was merely there as an "historian." Second, he warned them that the subprime mortgage market was about to set off a financial collapse. Neither of those are true, according to former Freddie Mac officials."My advice as an historian when they walked in and said we are now making loans to people that have no credit history and have no record of paying back anything but that's what the government wants us to do," Gingrich said in the CNBC debate. "I said at the time, this is a bubble. This is insane. This is impossible. It turned out unfortunately I was right and the people who were doing exactly what Congresswoman Bachmann talked about were wrong."
Bloomberg spoke to a number of unnamed officials who worked with Gingrich at the housing giant and described his role as an ambassador to Congressional Republicans sent to dissuade them from trying to dismantle Freddie Mac. And as for whether Gingrich warned his bosses about an impending collapse:
If Gingrich concluded that the company's business model was at risk and that the housing market was a "bubble," as he said during the debate, he didn't share those concerns with Richard Syron, Freddie Mac's chief executive officer at the time, a person familiar with the company's internal discussions said.
Government watchdogs say that contracts like Gingrich's are common among former politicians, allowing them to technically avoid registering as lobbyists while performing many similar functions.