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At least a half-dozen lobbying firms that worked for Fannie Mae and Freddie Mac have filed termination forms with the Senate Office of Public Records over the last two weeks.
The two giant mortgage companies have cut long ties with some of K Street’s biggest names, including firms well-connected to both the Democratic and Republican parties.
The wave of contract terminations is not surprising. When the two companies were taken over by the government, they said they would end lobbying practices that had made them a powerful force in Washington.
Still, the lost contracts could hit K Street hard.
Overall, 37 outside firms filed second-quarter reports for Fannie and Freddie, according to Senate records.
“If your client is in trouble, that’s good for business. They go out of business? Not so much,” said one consultant who has worked with Freddie Mac.
Fannie’s and Freddie’s largesse among political circles was mammoth, even by Washington standards.
The Center for Responsive Politics, a campaign finance watchdog group, estimates that the two housing giants spent nearly $200 million on lobbying and political contributions over the past two decades. Last year alone, Fannie spent $5.6 million on lobbying while Freddie spent $8.5 million.
“With Fannie and Freddie going down, dozens of lobbyists are now out … it ain’t good,” said the consultant, who added that other firms damaged by the mortgage crisis could also cut down on their lobbying expenses.
Observers suspect other financial services firms that have taken on government assistance because of the Wall Street crisis, such as American International Group, might also drop their K Street business.
“When you see other companies under stress, it is an unpredictable bounce to the football. You don’t know which way it is going,” said the consultant. “It could metastasize into many of the other in-house lobbying shops going down.”
Among those who have ended their agreements with Fannie are Ricchetti Inc., headed up by Steve Ricchetti, a former deputy chief of staff to President Bill Clinton and fundraiser for Sen. Hillary Rodham Clinton’s (D-N.Y.) presidential run; Fierce, Isakowitz & Blalock, with Kirk Blalock, former deputy special assistant to President Bush, as name partner; and Cauthen Forbes & Williams, which includes Jeff Forbes, a past staff director for the Senate Finance Committee.
A Fannie Mae spokeswoman declined to comment.
So far, only Arnold & Porter has filed termination forms for Freddie. Dwight Fettig, once legislative director to Sen. Tim Johnson (D-S.D.), worked on that contract.
But more could be on the way.
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