Obama Nominates Ethics Enemy To Regulate Fannie And Freddie

President Obama announces Rep. Melvin Watt as nominee for the FHFA / AP

President Obama announces Rep. Melvin Watt as nominee for the FHFA / AP


President Barack Obama nominated Democratic Rep. Melvin Watt (N.C.) to head the Federal Housing Finance Agency on Wednesday.

The agency oversees Fannie Mae and Freddie Mac as well as the country’s 12 Federal Home Loan Banks.

The longtime North Carolina representative is a curious nomination to head the regulatory agency.

Watt came under investigation of the Office of Congressional Ethics over a fundraising incident in 2009.

Watt, along with seven other lawmakers, was being investigated for attending a campaign fundraising event held in Watt’s honor just days before the House voted to rewrite legislation regarding federal financial regulation. Present at the event were financial institutions such as Bank of America, KPMG, Ameriprise Financial, and Goldman Sachs.

Watt withdrew an amendment from the legislation that focused on whether auto loans ought to be included in the proposed Consumer Financial Protection Agency two days after the event. Without the amendment, franchised auto dealers would have fallen out of the regulatory agency’s reach.

The ethics office did not formally charge Watt or any of the lawmakers, but that did not stop Watt from holding a grudge against it.

Watt proposed in July 2011 that Congress slash funding for the Office of Congressional Ethics by 40 percent.

Watt argued in a letter regarding his proposed cuts that the ethics office was a redundancy due to the existence of the House Ethics Committee. Watt also took issue with the office’s authority to “review information that is clearly privileged under the precedents of the House.”

Obama’s nomination is also being attacked from the left, which argues that Watt being in bed with large commercial banks is a serious problem for someone nominated to head a major regulatory agency.