THE CHICAGO WAY: How Did Rahm Emanuel Make $16 Million in Three Years As an Investment Banker? (Obama aide had stint at Freddie)

We call Obama supporters idiots for a reason. Rahm is one of them..

Reporting from Chicago — Before its portfolio of bad loans helped trigger the housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors.

One of those board members was Rahm Emanuel, now chief of staff to President Obama. Emanuel earned at least $320,000 for his 14-month stint at Freddie Mac.

Emanuel plays a critical role in addressing the nation's mortgage woes and fulfilling the administration's pledge to impose responsibility on the financial world -- the type of responsibility that appeared to be absent at Freddie Mac.

Emanuel, 49, is a veteran Democratic strategist and fundraiser who served three terms in the U.S. House after helping elect President Clinton and serving as his White House political director. The Freddie Mac money was part of $16 million that Emanuel earned in three years as an investment banker a decade ago.

Clinton appointed him to the Freddie Mac board in February 2000.

The board met no more than six times a year. Unlike most directors, Emanuel was not assigned to any of the board's working committees, according to company proxy statements. A spokeswoman for Emanuel disputed that.

Emanuel and other new directors qualified for more than $300,000 in stock and options plus a $20,000 annual fee, records indicate.

During Emanuel's stint on the board, Freddie Mac executives told the board of a plan to use accounting techniques to maximize profits that the government-chartered firm was reaping from risky investments, a 2003 investigative report found.

The report by Armando Falcon Jr., director of the Office of Federal Housing Enterprise Oversight, found that the goal was to shift earnings into the future, ensuring that Freddie Mac would appear profitable for years. Falcon noted that this action boosted executives' subsequent annual bonuses.

Falcon criticized the board for its acquiescence, saying it "became complacent" and "failed to make adequate inquiries of management and obtain sufficient information upon which to make decisions." His criticism was little noticed at the time.

The ensuing scandal forced Freddie Mac to restate $5 billion in earnings and pay $585 million in fines and legal settlements.