Reporter Michael Luo undertook a moderately deep investigationon Thursday into the finances of Barack Obama's incoming White House Chief of Staff Rahm Emanuel, focusing on the period between Emanuel's service as a senior advisor in the Clinton White House and his time representing his Illinois district in Congress, a brief but fruitful period in which Emanuel made oodles of money as an investment banker. But there was a glaring omission - nothing on Emanuel's stint on the board of the disgraced Freddie Mac (h/t Matt Philbin of the Business and Media Institute.)
In 2000, Rahm Emanuel was named by President Clinton to the board of directors of the Federal Home Mortgage Corp. (Freddie Mac). He resigned in May 2001 to run for Congress, and won. But in a story devoted to Emanuel's banking career, Luo made no mention of his tie to Freddie Mac, a quasi-government organization guilty of gross financial irregularities.
As Jeff Poor of BMI unearthed, Emanuel was on the board of Freddie Mac during a period (2000-2002) when the Securities and Exchange Commission reported the authority had misrepresented its income to investors.
During the time Emanuel spent on the board, Freddie Mac was plagued with scandal involving campaign contributions and accounting irregularities. Freddie Mac and its sister organization Fannie Mae were taken over by the federal government in September 2008 after years of mismanagement and scandal. Treasury Secretary Henry Paulson put the two beleaguered GSEs into a conservatorship, stripping common stock shareholders of their rights to govern the companies.
Even while he was addressing what Emanuel was doing at the time, Luo managed to completely skip Emanuel's service on the board of Freddie Mac.
The period before he was elected to a House seat from Illinois is a little-known episode of Mr. Emanuel's biography. Former colleagues said the insight it afforded him on the financial services sector is invaluable especially now. But Mr. Emanuel built up strong ties with an industry now at the heart of the economic crisis, one that will be girding for a pitched lobbying battle next year as the incoming Democratic administration considers a potentially sweeping regulatory overhaul.
Philbin of BMI pointed out the amusing hypocrisy in Luo's account:
Michael Luo wrote, "The period before he was elected to a House seat from Illinois is a little-known episode of Mr. Emanuel's biography." And an important part of it seems destined to stay little-known.
Heavily sourced and researched, the nearly 1,700-word Times piece mentioned 12 separate companies and 16 individuals that figured in Emanuel's career over the three years in question. But Luo didn't find space for a single mention of Emanuel's involvement with Freddie Mac during the same time period.