Gingrich welcomes "insider" label as he deflects Freddie Mac questions
Updated at 4:30 p.m. ET
Republican presidential contender Newt Gingrich on Wednesday fended off questions about the hefty sums he received to give advice to mortgage finance giant Freddie Mac, insisting that he warned the company of its risky practices ahead of the 2008 financial crisis.
Moreover, the candidate says he isn't worried his association with the now government-controlled firm makes him look like a Washington "insider" -- if anything, he said Wednesday on CBS News radio, he embraces the label.
"There's no question when you serve 20 years in the House and as speaker of the House for four years, you know a fair amount about Washington," Gingrich told CBS News radio correspondent Dan Raviv. "We just tried an amateur for the last three years, and it didn't work very well... The country would be better off with someone determined to change Washington and who knows how to do it."
As Gingrich climbs in the polls just about two months ahead of the first presidential nominating contest, voters are taking a second look at the candidate known for bringing the House under Republican control in 1994. The former speaker came under new scrutiny today for the experience he gained after leaving Congress, when he served as a consultant for Freddie Mac -- a company that Gingrich and most other Republicans regularly criticize for contributing to the mortgage crisis of 2008. Its former public-private status is also held up as a symbol of poor government management.
On CBS' "The Early Show" this morning, presidential candidate Michele Bachmann took a shot at Gingrich for taking money from a firm at "the epicenter of the financial meltdown." Later on the campaign trail in Iowa, she blasted Gingrich for "shilling" for Freddie Mac. "While he was taking that money I was fighting against Fannie and Freddie," she said.
According to a Bloomberg report, Freddie Mac paid Gingrich between $1.6 million and $1.8 million, between 1999 and 2008. The total is more than five times the figure Gingrich had previously acknowledged. A former Freddie Mac official told the Associated Press that Gingrich's fees totaled at least $1.5 million.
At an economic debate hosted by CNBC last week, Gingrich was asked about his work for Freddie Mac, and the moderator said Gingrich's firm was paid $300,000. Gingrich gave no indication he was paid any more than that, and he said he earned by the money by offering advice as a historian. Gingrich said he told the mortgage company that their lending practices were "insane."
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At that debate, Gingrich continued on to say that he was proven right about the firm, which has taken more than $70 billion from taxpayers since the Bush administration seized it in 2008 amid mounting losses from mortgages gone bad.
"And I think it's a good case for breaking up Fannie Mae and Freddie Mac and getting much smaller institutions back into the private sector to be competitive and to be responsible for their behavior," Gingrich said at the CNBC debate.
On Wednesday with CBS News radio, Gingrich said he did not oppose the hybrid structure that allowed the private firms access to cheap credit with the implicit backing that if anything went wrong, Uncle Sam would step in.
"Government sponsored enterprises can have a positive role to play," Gingrich said, using the Washington jargon applied to Freddie Mac and sister firm Fannie Mae, which were chartered by Congress but ran as private sector firms before being put under total government control in 2008. That public-private status is at the heart of much of the criticism of the two firms.
Gingrich also told CBS that "towards the end I told them... there was clearly going to be a bubble. You couldn't possibly make the kinds of loans people were making without the whole thing crashing."
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He insisted that he doesn't think his association with the company will hurt his standing with Republican voters because "I did no lobbying and I am not going to defend any kind of bad business practices."
Gingrich added that he doesn't condemn government-sponsored entities as a business model.
Bloomberg reported that part of Gingrich's mission was to develop an argument to persuade conservatives to back the company's then public-private structure. On CBS News Radio today, Gingrich emphasized that he did no direct lobbying for the company.
"What I did was I advised, said look, these are the kinds of questions that are being asked and these are the things you need to be able to answer," he said.
"First of all it wasn't paid to me. Gingrich Group was a consulting firm that had lots of people doing things and we offered strategic advice," Gingrich said.
Gingrich told CBS News Radio that his business experience "proved that i know how to operate in the free market." But on top of that, he added, "I am the only candidate running on the Republican side who's actually had real responsibility in Washington," like balancing a federal budget and reforming welfare.
The Gingrich campaign later on Wednesday released a fact sheet pushing back against any criticism that may come from his work for Freddie Mac. The fact sheet largely made the points Gingrich has made in interviews today, confirming that the former speaker never engaged in lobbying for the company, and that he still supports government-sponsored enterprises.
"Newt Gingrich welcomes scrutiny of his record in public office and as a small businessman," the fact sheet says. "Newt believes that properly vetting the potential next president is absolutely necessary in a free society and that a properly vetted nominee for the Republican Party will better be able to defeat President Obama and lead our country in rebuilding the America we love."
With little time left to leverage his new momentum before the January 3 Iowa caucuses, Gingrich is now hitting the campaign trail hard. He travels to Florida on Thursday, followed by a stop in Harvard University, and then returns to Iowa over the weekend.
