2. When Watchdogs Snore: How ABC, CBS & NBC Ignored Fannie & Freddie
3. On GMA, ABC's Bill Weir Promotes 'Social Critic' Spike Lee
4. Hasselbeck Proclaims 'Hate Sarah Palin Day' On ABC's The View
5. As Read in Wasilla, 'Top Ten Surprising Facts About Sarah Palin'
On Thursday night, CBS anchor Katie Couric began a short news update on Senator Ted Stevens of Alaska by immediately highlighting his party affiliation: "The senior Republican in the U.S. Senate went on trial today for corruption..." Stevens was appointed to his seat in 1968. But the night before, in an item on ethical questions surrounding Congressman Charles Rangel of New York, a House veteran elected in 1970 who is Chairman of the tax-writing Ways and Means Committee, Couric failed to inform viewers he's a Democrat.
Though, as his bio recites, he's "Chairman of the Board of the Democratic Congressional Campaign Committee," sans any party ID Couric announced on Wednesday's CBS Evening News: "The House also plans to investigate one of its own: New York Congressman Charles Rangel. He's come under fire for, among other things, failure to pay taxes on a luxury villa he owns in the Dominican Republic. Rangel has rejected calls that he step down as Chairman of the House Ways and Means Committee."
Rangel's bio on his House site: www.house.gov
Couric on Stevens on Thursday night, September 25, as she also brought in Alaska's Governor, Sarah Palin: "The senior Republican in the U.S. Senate went on trial today for corruption -- Ted Stevens of Alaska. Prosecutors say a contractor renovated Stevens' home for free, but the Senator failed to report it as a gift. The defense told the court Stevens paid every bill he received for the project and had no idea the contractor wasn't billing him for all the work. Here in New York today, reporters asked Alaska Governor Sarah Palin if she supports Stevens' re-election. She replied, 'we'll see where his trial goes.'"
[This item, by the MRC's Brent Baker, was posted Thursday night on the MRC's blog, NewsBusters.org: newsbusters.org ]
Last week, however, ABC anchor Charles Gibson noted Rangel's party affiliation, reading this short update on the Thursday, September 18 World News: "The House ethics committee will meet next week to consider an investigation into Congressman Charles Rangel's personal finances. Rangel, a Democrat from New York, is Chairman of the powerful House committee which writes the tax laws. He's under pressure to step down over questions about unreported income and unpaid taxes on a beach house that he owns in the Dominican Republic."
The two mortgage giants Freddie Mac and Fannie Mae -- seized by the government September 7 before they went completely bankrupt, at a potential cost to taxpayers of more than $25 billion -- have been in obvious trouble for much of the past five years -- with criminal investigations, accounting scandals, firings, resignations, huge losses and warnings from the Federal Reserve that their huge portfolio of mortgage securities posed a risk to the overall financial system.
But prior to this year, the watchdogs at ABC, CBS and NBC found time for only 10 stories on the financial health and management of Fannie Mae and Freddie Mac. A review of the three networks' morning and evening news programs from January 1, 2003 through December 31, 2007 found nine anchor-read items or brief references to the companies troubles, plus one in-depth report by CBS's Anthony Mason on the May 23, 2006 Evening News, after Fannie Mae was fined $400 million for accounting fraud.
[This item, by the MRC's Rich Noyes, was posted Thursday afternoon on the MRC's blog, NewsBusters.org: newsbusters.org ]
It's not that the networks eschew business news. A 2005 report from the MRC's Business and Media Institute found heavy coverage of the scandal surrounding Enron, but no interest in the growing scandal surrounding Fannie Mae: "A LexisNexis search of ABC, CBS, NBC, and CNN on the term 'Enron' from the nine months around when the story first broke -- Oct. 1, 2001, to July 1, 2002, produced 3,017 hits....A similar LexisNexis search was performed for the term 'Fannie Mae' for those same media, from June 1, 2004, to March 1, 2005, again during the time the story was breaking. This search discovered a paltry 37 matches." See: www.businessandmedia.org
But the networks should (presumably) be more interested in monitoring these mortgage behemoths, since they're not normal private companies but rather Government Sponsored Entities (GSEs) chartered by Congress to promote the specific cause of promoting home ownership. This special status, along with the presumption that taxpayers would bail out the firms if they got into trouble, amounts to an implicit federal subsidy that the Federal Reserve in 2003 calculated was worth between $119 and $164 billion a year.
Writing in Tuesday's Wall Street Journal, Charles Calomiris and Peter Wallison of the American Enterprise Institute explained how these two GSEs -- plus members of Congress who refused to hold them accountable -- are "largely to blame for our current mess." An excerpt:
Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves. Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac. The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess.
How did we get here? Let's review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of "affordable housing." They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse....
In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent.
Now the Democrats are blaming the financial crisis on "deregulation." This is a canard. There has indeed been deregulation in our economy -- in long-distance telephone rates, airline fares, securities brokerage and trucking, to name just a few -- and this has produced much innovation and lower consumer prices....
If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.
END of Excerpt
For the entire op-ed: online.wsj.com
Here's some of what the networks reported/ignored as the problems grew:
# June 11, 2003: Only NBC Nightly News anchor Tom Brokaw mentioned how "federal prosecutors have opened a criminal investigation into alleged misconduct among top officers of the home mortgage giant Freddie Mac. This just two days after its president was fired and the CEO and CFO resigned, amid disclosures the company is being investigated for accounting fraud." CBS and ABC were silent.
# December 11, 2003: The New York Times reported: "Federal regulators released a scathing report Wednesday on the corporate culture that fostered improper accounting at Freddie Mac, the same day that they announced that the company had agreed to pay a $125 million penalty and to take measures to prevent future misconduct." Not a peep on ABC, CBS and NBC.
# May 7, 2004: The Washington Post reported: "Fannie Mae's regulator said yesterday that the federally chartered mortgage funding giant improperly accounted for the declining values of two types of securities in its portfolio, though it did not say how big those unreported losses could be." No coverage from the networks.
# December 22, 2004: CBS's The Early Show carried a one-sentence report: "Fannie Mae has fired its CEO, Franklin Raines, over accounting problems at the mortgage giant." Raines was Bill Clinton's Director of the Office of Management and Budget, a major Democratic figure, but his party connections were not mentioned.
Six days later, the Early Show offered a follow-up: "And Fannie Mae's ousted CEO will be getting a massive payoff, if federal regulators don't block it. Franklin Raines could get more than $114,000 a month for life, plus deferred compensation. The mortgage giant's board of directors forced him out last week because of an accounting scandal." The other networks mentioned none of this.
# May 23,2006: After an investigation by the Office of Federal Housing Enterprise Oversight, Fannie Mae agreed to pay $400 million in fines for "cooking the books and deceiving investors," as CBS Evening News anchor Bob Schieffer described it. Reporter Anthony Mason presented the only in-depth report on Fannie Mae's bad business:
That morning, NBC's Ann Curry read a brief item on the Today show announcing that the report on Fannie Mae would be released later that day, while ABC skipped the development completely. Neither NBC nor CBS mentioned Raines' Democratic affiliation.
# On March 7, 2007, ABC's World News was the only program to mention (albeit briefly) a warning from the Federal Reserve Chairman Ben Bernanke: "Bernanke urged Congress today to tighten regulations on the giant mortgage companies Fannie Mae and Freddie Mac."
That morning's Washington Post elaborated on Bernanke's warning, which now seems all-too prescient:
Federal Reserve Chairman Ben S. Bernanke said yesterday that the scale of Fannie Mae's and Freddie Mac's mortgage investments could pose risks to the financial system, and he called for them to limit their holdings almost exclusively to loans for affordable housing.
Bernanke's proposal would sharply curtail the growth and profits of the government-chartered mortgage-funding companies, and it would force them to focus on investments that have, as he described it, "a clear and measurable public benefit."
Congressional efforts to overhaul regulation of Fannie Mae and Freddie Mac have been moving in a different direction....
Fannie Mae and Freddie Mac have $1.4 trillion of mortgage-related investments, which are sensitive to movements in interest rates and require extensive hedging to reduce risk. The companies have debts and outstanding-credit guarantees of $5.2 trillion, exceeding the U.S. government's $4.9 trillion of publicly held debt, Bernanke said....
According to the Fed, the perception that the government stands behind Fannie Mae and Freddie Mac enables them to borrow at low interest rates and buy assets with higher returns in a kind of perpetual-profit machine. That gives them an incentive to expand their holdings, Bernanke said.
In his first speech on Fannie Mae and Freddie Mac, Bernanke echoed longstanding Fed concerns. Although the Fed has concluded that they do not seem to pose an immediate threat, "their portfolios represent a potentially significant source of systemic risk," Bernanke said.
END of Excerpt
Story in full: www.washingtonpost.com
# November 7, 2007: In a round-up of market action for the CBS Evening News, reporter Anthony Mason briefly mentioned that "the New York state attorney general [Andrew Cuomo] has subpoenaed the government-backed lenders Fannie Mae and Freddie Mac in his investigation into conflicts of interest in the mortgage industry."
The next morning on NBC's Today, CNBC's Jim Cramer railed against Cuomo, calling him "a communist" who was "making it so the very institutions we need right to provide money for people are gun-shy....If you're trying to buy a home right now, the last thing you want is Cuomo attacking the people, the companies, that make money available for you to buy a house."
# November 20, 2007: NBC Nightly News anchor Brian Williams briefly mentioned that "Freddie Mac, America's second biggest buyer and backer of home loans, said today it lost $2 billion in the third quarter of this year."
Until this summer's collapse, the networks offered extremely little coverage this year, too, although ABC's Good Morning America on May 6 noted in passing how Bernanke had once again "urged Congress to reform mortgage financiers Fannie Mae and Freddie Mac."
The paltry amount of coverage virtually ensured that the public would remain largely in the dark about the growing troubles at these GSEs, with no clamoring for the politicians to fix the mess they'd helped create. The media like to consider themselves the public's self-appointed watchdogs, monitoring the corridors of power for transgressions and abuse. When it came to Fannie and Freddie, the network watchdogs were asleep at the switch.
On Thursday's Good Morning America, journalist Bill Weir touted left-wing filmmaker Spike Lee as a "social critic" and ignored any mention of the director's bizarre conspiracy theories, such as his 2005 contention that the United States government intentionally blew up the levees during Hurricane Katrina in order to flood African American areas. Instead, Weir marveled: "No director in Hollywood has attacked the thorny issue of race quite like Spike Lee."
While promoting Lee's new World War II film, the anchor of the weekend edition of GMA enthused, "Do the Right Thing and Malcolm X, still loom over his 15 other feature films as ground breaking emblems of righteous anger." Weir also labeled the more hopeful tone of Lee's The Miracle at St. Anna as a "reflection of one social critic's mood in an age of change." Of course, Weir neglected to mention that this same "social critic" has also declared "it's not far-fetched" to think that the levees in New Orleans were destroyed by the United States government.
[This item, by the MRC's Scott Whitlock, was posted Thursday afternoon on the MRC's blog, NewsBusters.org: newsbusters.org ]
Appearing on the October 21, 2005 edition of HBO's Real Time With Bill Maher, Lee asserted that a "choice had to be made, one neighborhood got to save another neighborhood and flood another 'hood, flood another neighborhood." See a October 24, 2005 CyberAlert posting for more: www.mrc.org
In contrast to Weir, ABC reporter Steve Osunsami actually highlighted Spike Lee's conspiracy theories during a segment on race and Hurricane Katrina on the August 29, 2006 edition of "World News." However, Osunsami offered zero skepticism and failed to point out that there's absolutely no evidence to support the idea that the government destroyed the levees. Instead, he simply repeated, "In many black neighborhoods, they actually believe that white residents sent the barge that destroyed the levee and flooded their communities...To this day, the conspiracy theories are so widely held, director Spike Lee put them on film." See a August 31, 2006 CyberAlert posting for more: www.mrc.org
A transcript of the September 25 segment, which aired at 8:41am:
DIANE SAWYER: Spike Lee's new film, "The Miracle at St. Anna," based on true events It tells the story of a group of black soldiers caught behind enemy lines during World War II. And while the drama marks a departure from previous Lee movies, like "Do the Right Thing," the director remains just as provocative as ever, as ABC's Bill Weir found out.
Elisabeth Hasselbeck finally called out some of The View co-hosts on the Sarah Palin bashing as she finally proclaimed September 25 as "hate Sarah Palin day." Immediately, all co-hosts defensively swarmed over the comment denying there is any hate for Governor Palin. Joy Behar claimed "it's not personal. It's my country that I'm worried about."
Hasselbeck's remark was sparked by a discussion over a new YouTube video displaying a Kenyan bishop praying to protect a woman, who resembles Mrs. Palin, from witchcraft. Sherri Shepherd and Elisabeth Hasselbeck explained to the other two theologically challenged co-hosts that this is simply a prayer to protect this woman, possibly Sarah Palin, from evil.
Whoopi Goldberg also defended playing and discussing the video: "If Barack Obama had been in that church and somebody was praying over him to keep him free from witchcraft, we'd be having this discussion, okay?" However, the previous day, Goldberg sang a different tune responding to Elisabeth's mention of Joe Biden's many gaffes. She opined "these are not, these are not the issues. What we want to know is what does Sarah Palin speak -- I want to hear her speak. And that to me from now on, I don't want to hear any more talking heads like you [Elisabeth Hasselbeck] saying -- no more BS. Let's get to what the real facts are."
Hasselbeck also tested Joy Behar's consistency, quoting Biden citing "Catholic social doctrine" in his defense on tax increases. Behar responded: "I don't like any discussion of God and religion in the political conversation."
[This item, by the MRC's Justin McCarthy, was posted Thursday on the MRC's blog, NewsBusters.org: newsbusters.org ]
Paris Hilton appeared in the show's first segment. In a humorous moment, just as she did the Constitution, Joy Behar demonstrated her lack of basic knowledge of our legal system: newsbusters.org
JOY BEHAR: You're not going to be able to vote are you? I have a friend who was in the slammer. He can't vote. Weren't you in jail?
Earlier on the September 25 show:
GOLDBERG: There's a YouTube video of a Kenyan bishop supposedly given Sarah Palin a blessing against every form of witchcraft at her home town church in 2005. I, I don't know if it's her, it looks like her. You take a look and tell me what you think.
As read by ten residents of Wasilla, Alaska standing in front of Lake Lucille, from the September 25 Late Show with David Letterman, the "Top Ten Surprising Facts About Sarah Palin."
10. Sometimes Sarah calls John McCain "grandpa" (Interior Designer, May-Lynn Pauling)
9. She stole that sexy librarian look from me (Grasshopper Aviation Pilot, Dave Glenn)
8. Recently passed legislation to build a bridge to Funkytown (General Manager of a Mexican Restaurant, Jerry Ochoa)
7. Does great impression of Tina Fey (Banker and Race Car Driver, Erika Bills)
6. Favorite meal: moose nuggets and beaver jerky (Private Music Teacher, Ana Hartman)
5. Working on "Knight Rider" spin-off about a talking snowmobile (Virtual Golf-Shooting Range Owner, Calvin Culverwell)
4. Favorite book? "Late Show Fun Facts" -- available at fine stores everywhere (Flight Paramedic, Steven Heyano)
3. Once spent a week in the hospital after attempting to put lipstick on a pit bull (Dental Hygenist, Kathy McCone)
2. To improve her foreign policy experience, she recently went to the International House of Pancakes (Deputy Mayor and Chiropractor, Kris Larson)
1. Only person I know who's not afraid to go hunting with Dick Cheney (From the Wasilla Chamber of Commerce, Lyn Carden)
To watch Flash video of the presentation, click on the video-camera icon at the top of the list on this page: lateshow.cbs.com
-- Brent Baker