Senate Republicans Push Ban On GSE Lobbying

Seven Republican senators sent Sen. Harry Reid (D-Nev.) a letter on Wednesday urging the Majority Leader to include a ban on lobbying and political activity by Fannie Mae and Freddie Mac in legislation aimed at bolstering the two mortgage giants.

Sen. Jim DeMint (R-S.C.) has threatened to hold up the housing legislation unless it is amended to include a provision prohibiting the two companies from lobbying Congress.

Congress is currently debating a plan to save the struggling government-charted companies, who own or guarantee nearly half of the $12 trillion housing market. 

“Our nation has a longstanding tradition of preventing tax dollars from being used for lobbying and other political purposes, and we believe this legislation crosses that line,” wrote the Senators in their letter.

Sen. Reid responded in by sending an e-mail to business lobbyists, asking K Street for some help.

"We are informed that Sen. DeMint would like to seek an amendment to the House amendment," wrote a Reid staffer. "While we have not seen Sen. DeMint's amendment, it's fair to say that such an amendment could complicate debate and delay passage of the housing bill."

Last week, Politico reported (http://www.politico.com/news/stories/0708/11781.html) that the two mortgage giants had spent near $200 million on lobbying and campaign donations over the past decade.

“If American taxpayers are forced to buyout Fannie Mae and Freddie Mac, their lobbying and political activities should stop,” explained DeMint, who introduced the idea of a ban last week. “If we plan to use taxpayer dollars to buy shares of these troubled companies, they should be treated like other federal entities.”

But congressional ire hasn’t seemed to slow lobbying at the two companies. Both Fannie Mae and Freddie Mac plan to host receptions at the Democratic and Republican national conventions. 

At the Republican convention, the companies are co-hosting a party with the National Association of Home Builders, the Independent Community Bankers of
America and the National Association of Realtors at the luxury Graves Hotel.

A toast to government bail-outs, anyone?

(Text of the letter after the jump.)
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