Nov 07 2008
Trouble for Obama Already? New Chief of Staff Rahm Emanuel and Freddie Mac
Politics is a rough sport. One minute you are on top of the world and the next, you are frowning at questions in front of bright lights. Barack Obama has his first issue with his first hire, Chief of Staff Rahm Emanuel
President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.
According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.
Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.”
In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for “13 months-a relatively short period of time.”
He’s only had the chief of staff postion a relatively short period of time as well. If Emanuel had a hand in the Freddie Mac disaster, this could be the first major gaff of the Obama Administration. We will have to watch closely and see how this one develops.
