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Shock: GOP Senator Behind Obamacare Looting Scheme
By Jerome Corsi
WASHINGTON, D.C. (Infowars) – Tennessee Republican Sen. Bob Corker, derisively tagged the “Senator from Wells Fargo” by those fighting to recapitalize Fannie Mae and Freddie Mac, is actively pushing President Trump to continue the Obama administration policy of sweeping Fannie and Freddie earnings to the Treasury Dept.
In a letter dated March 29, 2017, Corker rounded up four other U.S. Senators, including Virginia Democrat Sen. Mark Warner to write a letter to Melvin Watt, the director of the Federal Housing Finance Agency.
The letter asked President Trump to continue taking what is known as the “Net Worth Sweep” that sweeps all Freddie and Fannie earnings into the U.S. Treasury, without paying stockholders any dividends.
The Net Wort Sweep of all Freddie and Fannie earnings to the Treasury has been taking place since President Obama had the Treasury amend the Preferred Stock agreement that has stripped the two GSEs of more than $260 billion since August 2012.
In contrast, all the banks bailed out by the Obama administration were allowed to repay their debts, giving the government a $7.5 billion dollar gain or a 1.7 percent return on investment.
Senators Crocker and Warner in asking President Trump to make the Net Worth Sweep payment due March 31, 2017, were continuing the Obama administration Net Worth Sweep policy that since August 2012 had prohibited Fannie Mae and Freddie Mac from paying off the $187.5 billion the Treasury had invested in the two companies in 2008 as a bailout.
To date, Fannie and Freddie have returned $68 billion more than they borrowed in the 2008 bailout, providing the federal government the best return on investment Washington has made since the Louisiana Purchase – a ROI (Return on Investment) of 36 percent.
In what has amounted to the largest theft of dividends in corporate history, a careful analysis of the Treasury Department balance sheet makes clear the Obama administration saved Obamacare from failure in 2012-2013 by diverting Fannie and Freddie’s profits to pay the Obamacare low-income insurance subsidies that Congress has refused to fund.
In their appeal to Watt, Corker and Warner argued that if the Trump administration stopped the NWS, Fannie and Freddie would be allowed to recapitalize, something Congress envisioned in the 2008 decision to place Freddie and Fannie in a conservatorship.
But Corker and Warner do not want Freddie and Fannie to recapitalize because this would be directly counter the “housing finance reform” legislation Corker and Warner have co-sponsored since 2013.
That legislation aims to complete the Obama administration plan to shut down Fannie and Freddie, handing over all U.S. mortgage finance to Wall Street and to big banks, like Wells Fargo.
Corker and Warner, with their proposed legislation, have schemed to advance what leaked Geithner-era Treasury documents published by Infowars.com prove was an Obama administration plan to end “home ownership” as part of the American Dream.
These leaked documents show Obama’s Treasury Secretary Timothy Geithner lead a series of among Obama administration officials and outside real estate “experts” that were closed to the press, aiming to “wind down” Fannie and Freddie, knowing full well that closing Fannie and Freddie would turn the U.S. middle class into a nation of “well-housed” renters, on the model of the European Union.
In calling Corker the “Senator from Wells Fargo,” defenders of Fannie and Freddie are noting that Corker’s plan is the Obama plan to close the two Government Sponsored Entities (GSEs), in preference to creating a “bank-centric” system in Washington.
To put it simply, Corker endorses the Obama administration’s plan, developed largely by then Treasury Secretary Timothy Geithner, to turn over the U.S. mortgage finance markets to Wall Street and to large commercial banks, including Wells Fargo.
Wells Fargo is a major player in the U.S. secondary mortgage market that not coincidentally has lent billions of dollars over several decades to promote Corker’s political career, while lending him money on investments that have made Corker one of the wealthiest members of the U.S. Senate.
Corker’s ties to Wells Fargo trace back to before 2006, when a business associate and political backer, Henry Luken, acquired millions of dollars in risky real estate holdings that were headed underwater from the then-Chattanooga mayor, allowing Corker to pump millions into his campaign to become U.S. Senator.
The Chattanooga Times Free Press reported on Jan. 5, 2006, that Luken acquired from Corker several buildings in downtown Chattanooga, as well as a shopping center and several additional commercial buildings outside the central business district.
The transaction that allowed Corker to dump approximately $75 million in risky real estate loans that had saddled Corker with subprime real estate loans issued by GE Capital in 1999 that Corker had used to buy four of the properties sold to Luken.
As reported by the Chattanooga Times Free Press on March 27, 2010, when the GE Capital loans came due in 2009, GE Capital refused to renew the loans, agreeing only to award Luken two six-month extensions that allowed Luken to remain solvent into 2010.
Corker had retained a contingent liability on the properties financed by the risky sub-prime GE Capital loans.
What this means is that Corker faced bankruptcy if Luken could not find a solution to Luken’s inability to meet the interest payments on the money Luken borrowed to buy Corker’s property.
Wells Fargo solved the problem for Luken and Corker in March 2010 when Wells Fargo agreed to refinance Luken on more than $28 million dollars of borrowings Luken made to buy the Corker properties.
With this $28 million-dollar refinancing, Wells Fargo bailed out Luken and Corker when Luken’s real estate company was technically in default, three months before the GE Capital extensions were scheduled to expire.
The Wells Fargo loan helped Corker avoid the contingent liability that might have thrown him into bankruptcy.
This left Corker free to use for political purposes the proceeds he realized in the property sale to Luken.
As his 2006 campaign for the Senate was drawing to a close, Corker made a loan of $4.2 million to his Senate campaign.
That loan accounted for nearly all Corker’s spending in the final weeks of his campaign, enabling Corker to outspend his Democratic challenger Harold E. Ford, Jr. by $18.6 million to Ford’s $15.6 million, enabling Corker to defeat Ford narrowly, 51 percent to 48 percent.
According to a report written by staff writer Michael Davis, published in the Chattanooga Times Free Press on Feb. 3, 2007, only $500,000 of Corker’s $4.2 million could be repaid under federal elections laws.
This left Corker nearly $3.7 million-dollars of his loan having to be considered a gift Corker made to his campaign.
Without the last-minute loan to his campaign, it is unclear whether Corker would have defeated Ford, a former congressman who served for 10 years representing the Memphis-based 9th Congressional District, who had then only recently been appointed to become chairman of the centrist Democratic Party Leadership Council.
Wells Fargo stands to gain the most should Fannie and Freddie be closed according to Corker’s proposed legislation, given that Wells Fargo currently dominates other banks in the U.S. mortgage market.
In the first half of 2016, Wells Fargo generated $105 billion in mortgage originations, more than twice that of runner-up JPMorgan Chase, and almost four times that of Bank of America.
Moreover, where most of the TBTF (“too big to fail”) banks are shrinking their mortgage market footprint, Wells Fargo is still focused on making warehouse loans to mom-and-pop lenders, with a plan to purchase from them the mortgages these lenders originate.
Wells Fargo has a long history of committing improprieties in mortgage financing, most recently forced in February 2016 to pay $1.2 billion to settle a federal 2012 lawsuit in which prosecutors claimed Wells Fargo “engaged in a regular practice of reckless origination and underwriting” of Federal Housing Administration loans backed by federal insurance that was intended to help first-time home buyers.
Michael Bright, a former senior Corker aide who is reported to have drafted the Corker-Warner legislation to shut down Fannie and Freddie, worked as a senior derivatives trader at Wachovia from 2006 to 2008, when Wells Fargo acquired Wachovia in a $15.1 billion deal.
Subsequently Michael Bright joined his father, a senior executive at Countrywide Financial, as a market-maker.
Countrywide should be a familiar name to all, as Countrywide was one of the main culprits in selling sub-prime mortgage loans to the secondary mortgage security market that led to the 2008 financial crash, while also defrauding Fannie Mae by selling loans to the GSE that were not of the quality Countrywide had fraudulently represented the mortgages as being.
Infowars.com has previously reported that in an email dated Nov. 16, 2013, obtained under a FOIA request, Bright, then an aide to Sen. Corker, advised officials at the Federal Housing Finance Administration to ignore the advice of Randall D. Guynn, an attorney widely recognized as one of the nation’s leading bank regulatory authorities.
Specifically, Guynn had advised Bright and Corker that continuing the Net Worth Sweep “will undermine the confidence of investors in the rule of law (not only those in Fannie and Freddie, but also in the U.S. financial system more generally) and potentially have an adverse effect on financial stability in the United States, and are therefore bad public policy.”
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