Fannie, Freddie Lobbyists Waiting for Word

Several, however, said that Fannie Mae typically reviews outside contracts every six months, and has the right to terminate a lobbying firm during those reviews. Freddie Mac conducts a similar review that typically comes in late November and early December, lobbyists from two firms said.

The takeover has cast longtime Fannie and Freddie lobbyists in the unfamiliar role of outsiders: “We don’t know a whole lot on our end, as we’re not in the middle of what’s going on there,” says Stephanie Silverman, founding principal of Venn Strategies, which has a contract to lobby for Freddie, in a voicemail. Freddie Mac has paid Venn Strategies $100,000 so far this year, disclosure reports show.

BIG INFLUENCE

Fannie and Freddie have a reputation on K Street for paying well and paying their bills on time. They also spread the money around. At a 2004 House subcommittee hearing about Fannie Mae’s accounting problems, Rep. Christopher Shays (R-Conn.) said, “I am tempted to ask how many people in this room are on the payroll of Fannie Mae, because what they do is they basically hire every lobbyist they can possibly hire. They hire some people to lobby, and they hire some people not to lobby so that the opposition cannot hire them.”

Fannie’s highest-paid outside lobbyists so far this year are Johnson, Madigan, Peck, Boland & Stewart; Elmendorf Strategies (run by well-known Democratic strategist Steve Elmendorf); and all-Republican Fierce, Isakowitz & Blalock, which each reported receiving $100,000 in the first half of the year. Freddie paid $200,000 to Timmons & Co. during the first half of the year; the Timmons lobbying team includes Martin Paone, a former aide to Senate Democrats who joined the firm earlier this year.

Both Fannie and Freddie are among the top 20 spenders on lobbying over the past decade, according to the Center for Responsive Politics, which tracks lobbying expenditures. Freddie Mac is 12th on the list, with a total of $94.9 million, and Fannie Mae is No. 20, with $79.5 million in lobbying bills.

Despite their lobbying clout, a halt in spending by Fannie and Freddie isn’t likely to drown most of the firms who work for them. For players like Ogilvy Government Relations, which grossed $21.4 million last year, according to Legal Times’ Influence 50, lobbying for Fannie Mae means revenue of about $10,000 a month—a half percent of the firm’s annual revenue. Small firms and solo practitioners, however, depend far more heavily on the companies. Disclosure reports for Fannie lobbyist Katherine Childress of Bethesda, Md., for example, show the company has paid her $90,000 so far this year. Fannie is her lone registered lobbying client. (Childress declined to comment.)

The companies’ disclosure reports show they lobbied on legislation tied to housing, banking, investments, and securities—issues receiving a lot of attention in Congress this year. Mortgage and housing industry groups such as the Mortgage Bankers Association will make sure those issues don’t fall off the agenda. “The ban doesn’t apply to us, so we’ll continue to lobby,” says Jerry Howard, chief executive officer of the National Association of Home Builders.

At least one outside lobbyist for Freddie Mac said that even if he can’t do much under the ban, he will continue to monitor legislation affecting his client while he is under contract.

INSIDE JOBS

Also unclear is the fate of in-house lobbyists at Fannie and Freddie. Fannie employs a dozen such lobbyists, according to its second-quarter disclosure report, and Freddie lists eight. So far in 2008, Fannie has reported spending $2.9 million on its in-house lobbying effort, and Freddie has reported $4.47 million. In 2007, Fannie spent $5.62 million on in-house lobbying, and Freddie spent $8.5 million.

Five outside lobbyists registered to lobby for either Freddie or Fannie said in-house lobbyists could become well-connected congressional liaisons on the two companies’ behalf, especially since some members of Congress are questioning aspects of the bailout. They also could be dispatched to work with trade and industry associations.

At Fannie, the government and industry relations team is led by senior vice president Duane Duncan, a onetime aide to former Rep. Richard Baker (R-La.). At the 2004 hearing, held by the House Financial Services Committee’s subcommittee on capital markets, insurance, and government-sponsored enterprises, the company submitted a document that listed his 2002 compensation package as being worth $920,144. Other lobbyists were apparently making even more at the time: Thomas Donilon, who has since left the company for O’Melveny & Myers but was then Fannie’s executive vice president of law and policy, responsible for overseeing legal, regulatory, government affairs, and public policy issues, was making roughly $4.27 million in compensation in 2002, according to the same document. The compensation package numbers include bonuses, corporate contributions to retirement accounts, and other benefits, including stock options that have now plummeted in value.

Freddie Mac’s in-house government and industry relations team is led by senior vice president Timothy McBride and Lisa Ledbetter, a former deputy director in the office of policy development at the Federal Deposit Insurance Corp.

So far, Lockhart has said he wants employees to stay with both companies —though it remains to be seen whether their future includes lobbyists.