Nice work if you can get it: how Fannie Mae became Washington's biggest power player - U.S. Federal National Mortgage Association - Cover Story

Washington Monthly, June, 1998 by Michelle Cottle

Fannie keeps a close eye on the media as well. Press attention tends to make the company unhappy -- unless, of course, reporters are covering one of the foundations PR events. No scrap of information is released by Fannie, or its foundation, without the requester first undergoing a thorough grilling. And when the Monthly tried to arrange interviews with company executives, we were informed that Fannie has "a low tolerance for these sorts of articles" and that this reporter would not be allowed to speak with top management, particularly "in light of the murderers row listed on your masthead." (In recent years, two former Monthly editors have written pieces criticizing Fannie.)

The end result of all this is that Fannie essentially operates without any meaningful checks on its behavior. The company is not a "bad guy" per se. Over the years, Fannie has helped raise the level of home ownership dramatically, and more recently has been working to improve its record in providing a market for low- and moderate-income housing. But the corporation has grown so big, so rich, and so powerful that it is largely beyond the control of both government regulators and free-market forces. No industry players can influence it through competition. Certainly no one on the Hill dares speak out. "What's so interesting is not only that they have preserved their cushy arrangement," says Charles Lewis, "but that there is no discourse on the subject -- not just in the halls of Congress, but even intellectually. It's a whole area that's been relatively ignored."

This, of course, suits Fannie just fine. And Bill Clinton would clearly be a top-notch recruit to help the corporation keep things that way.

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Sadly, our nation's capital has come to embody the old adage: It's a nice place to visit, but I wouldn't want to live there. Crime is rampant, the streets are a mess, the schools are falling down, the water is barely fit for consumption, and most residents consider themselves lucky if their garbage gets picked up at all. So what needs could the District start addressing with an extra $300 million(*) a year in tax revenue? Among other things:

Resurface severely potholed local roadways:             $62 million
Modernize the plumbing in schools:                      $14 million
Replace boilers in schools:                             $14 million
Upgrade electrical wiring in schools:                   $28 million
Remove asbestos from school facilities:                  $4 million
Rehabilitate decrepit police stations:                  $10 million
Repair fire department and emergency medical
service facilities:                                     $10 million
Replace/repair defective firefighting protective
equipment:                                             $1.5 million
Replace/update computer-assisted emergency
dispatch system:                                         $4 million
Rebuild/restore Fire-EMS training facility:              $7 million
Get 17 more ambulances on the streets/increase
staffing efficiency:                                    $11 million
Hire 150 additional teachers (salary costs):             $6 million
Hire 100 additional police officers (salary costs):      $4 million
Upgrade computers to deal with the year-2000
problem:                                              $44.5 million
Payment toward the $3.32 billion in long-term debt
the District carries:                                   $80 million
                                                       $300 million