Barney Frank

The headlines and leads of news stories about U.S. Rep. Barney Frank on Friday, May 27, used words like “Frank admits” in relaying a story that the most senior openly gay member of Congress “used his influence” as a member of a House finance committee to “land a job at Fannie Mae” in 1991 for his then-lover Herb Moses.

“Rep. Frank denies partner’s job was payoff,” said the headline in the UPI wire story. “Rep. Barney Frank Admits to Helping Ex-Lover Land Job at Fannie Mae,” said one of several Fox News headlines.

The headlines and leads suggest that Frank has been caught for doing something improper 20 years ago—that he used his position on a House committee that helps regulate the mortgage industry to land a job for his then-lover, Herb Moses, with a giant member of that industry, Fannie Mae.

Fannie Mae (or, more formally, the Federal National Mortgage Association) is a Congressionally charted institution that helps ensure that lenders have funds to lend at affordable rates to home buyers. Frank, as a member of the House Financial Services Committee, was a staunch defender of Fannie Mae for many years, a fact that has prompted many of his critics to charge that he is partly to blame for the recent subprime mortgage crisis.

But the claims that Frank helped his then live-in companion get a job at Fannie Mae are based on a just-released book, Reckless Endangerment, written by Pulitzer Prize-winner journalist Gretchen Morgenson of the New York Times and co-author Joshua Rosner, a financial researcher and consultant.

According to the book, Frank told a Fannie Mae official that “Herb’s a very good economist and has a business degree.”

“Almost immediately,” says the book, “Moses was being interviewed by an array of executives at Fannie Mae.”

The book adds that a “former company executive” told her that he “believed” James Johnson “was behind hiring Moses.” Johnson, a prominent Democratic activist, became chairman of Fannie Mae in 1991.

The book also quotes this unidentified “former company executive” as saying, “Barney wanted [Moses] to have a job at Fannie Mae so the word was Johnson wanted him hired.”

Fannie Mae did hire Moses, who was just out of business school at Dartmouth. The company gave him an entry level position as assistant director for product initiatives. Two of Moses’ initiatives, said the book, “involved relaxing Fannie Mae’s restrictions on home improvement loans and small farm mortgages.” Moses left the company seven years later, at about the same time he and Frank broke up.

Morgenson wrote that she asked Frank in late 2010—12 years after the hiring—whether Fannie Mae’s hiring of Moses put Frank, as a legislator voting on matters that affected Fannie Mae, in a “conflicted position.”

“I don’t think it influenced me at all,” Frank responded, according to the book. “I was not totally engaged with Fannie Mae and Freddie Mac.”

Morgenson discussed this aspect of her book on National Public Radio’s Fresh Air May 24. She said Fannie Mae became a “political animal” when Johnson took the helm in 1991 and worked actively to influence legislators. She said that, in 1991, when Congress was writing legislation to enhance oversight of Fannie Mae, “Frank actually called up [Fannie Mae] and asked them to hire his companion….”

“Of course, the company was happy to provide a job for his companion,” said Morgenson on NPR, “and rolled out the red carpet in a series of interviews with a variety of executives, and it ultimately did hire the man.”

On NPR, Morgenson said that when she asked Frank whether this hiring put him in a conflicted spot, “he said absolutely not, that he didn’t really remember being interested or having much to do with the 1992 legislation.”

“But the record,” said Morgenson, “shows that he was very aggressive and really tough on those who were testifying in Congress about reining in Fannie Mae and Freddie Mac.”

Frank’s press spokesman, Harry Gural, said Morgenson “has recanted the words ‘called up’,” a point confirmed by a Boston Globe report published Friday, May 27.

After the news broke on NPR, Frank told the Boston Globe that the conversation about Moses took place with Fannie Mae official Jerry McMurray during a chance meeting at a reception on Capitol Hill. McMurray had been staff director of a House Financial Services subcommittee just two years earlier, and he also knew Frank when both men were at Harvard, noted the Globe.

How and when Frank talked to Fannie Mae about his then-companion is as important to the story as the fact that Frank did talk to Fannie Mae about Moses. It’s one thing for a company to try to influence a legislator –that’s a common practice and one that is regulated by law. But it’s quite another matter for a legislator to seek favors from a company, especially a company over which the legislator has oversight.

Frank told the Globe that he “never asked [Fannie Mae] to hire [Moses].” He said his oversight responsibilities with regard to Fannie Mae were minimal in 1991 because he did not serve on the subcommittee drafting the oversight bill. And he said the one time Moses’ job did pose a potential conflict for him with a vote, he voted “present” and noted that it was because his partner worked at Fannie Mae.

And Fannie Mae official Jerry McMurray, who hired Moses, told the Globe and the Boston Herald that he did not know Moses was in a relationship with Frank when he chose to interview him. He said Moses told him about his relationship with Frank during his interview.

“Barney never called or pressured me,” said McMurray, “in any way, shape, or form.”

In Frank’s defense, his press spokesman Gural notes that reporter Morgenson is a former press secretary to Republican presidential candidate Steve Forbes, who long argued for breaking up or even abolishing Fannie Mae.

Moses was already working for Fannie Mae in July 1991 when he penned a “First Person” essay for the Washington Post. He and Frank had been a couple for about three years at that point and, in the essay, he noted that he hoped to eventually achieve the recognition that other spouses of U.S. representatives have.