Watchdog Calls for DOJ Investigation of Mortgage Bankers CEO
The Washington, D.C.-based watchdog organization Campaign for Accountability has called on the Department of Justice to investigate three former members of the Obama administration for revolving door practices related to the future of Fannie Mae and Freddie Mac.
In a Dec. 15 letter to the Justice Department, CFA Executive Director Anne Weismann asked for an investigation into the post-government activities of Mortgage Bankers Association President/CEO David Stevens, the former Assistant Secretary of Housing and Federal Housing Commissioner at HUD; Michael Berman, the former advisor to HUD Secretary Shaun Donovan; and Jim Parrott, the former adviser to Secretary Donovan.
Weismann cited a Dec. 7 New York Times article in which the three were reported to have assisted the nation’s largest banks in their effort “to unseat Fannie Mae and Freddie Mac … and capture their share of the profits in the country’s $5.7 trillion home loan market.”
The three worked on the restructuring of Fannie and Freddie in their governmental capacities and all three continued to work on housing finance policy after leaving their governmental jobs, including meeting with government officials responsible for matters involving Fannie and Freddie, the letter stated.
Further, Weismann said the three are potentially in violation of 18 U.S.C. § 207 which, according to the United States Office of Government Ethics, limits the activities of individuals after they leave government service. This includes a restriction that bars a former employee from representing another person or entity concerning the same “particular matter involving specific parties” with which the former employee was involved while serving the government.
The restriction lasts one year. If the matter was pending under the employee’s official responsibility during the employee’s last year of government service, the bar lasts for two years. If the employee participated in the matter “personally and substantially,” the bar is permanent.
Additionally, Weismann said that Stevens was in possible violation for not having registered as a lobbyist in his capacity at MBA.
The MBA said the accusations are not true.
"From the moment Dave was first contacted by MBA regarding potential employment, he worked closely with the General Counsel and Designated Ethics Official of the Department of Housing & Urban Development to ensure he completely complied with federal law and Obama Administration voluntary policies related to post-employment activities,” John Mechem, spokesman for the Mortgage Bankers Association, told CU Times in an email.
"After leaving government, he continued to consult with counsel to make sure he did not even approach the ethical or legal line. At every turn, he erred on the side of caution. Outside counsel has reviewed Dave's activities with and on behalf of MBA and its members and has confirmed there is no violation of either the letter or the spirit of the law,” Mechem added.