Investors suing the federal government to reclaim the profits of Fannie Mae and Freddie Mac have embraced an unexpected new ally: An author best known for arguing at book length that Barack Obama was not eligible to be president.
InfoWars Washington bureau chief Jerome Corsi, the author of the 2011 book Where’s the Birth Certificate?: The Case that Barack Obama is not Eligible to be President and other bestsellers, last month published a long piece accusing the Obama administration of illegally diverting profits from Fannie and Freddie to pay for Obamacare subsidies imperiled by a federal lawsuit. In the weeks since, he has returned to the same topic several times, saying that Obamacare was designed to end the dream of middle-class ownership.
On Friday, Corsi’s writings on the bailed-out mortgage giants were promoted by Investors Unite, a group of Fannie and Freddie shareholders involved in litigation against the government to recover profits from the companies.
The investor group, which plays a significant role in the unfolding legal and legislative battles over housing finance, amplified Corsi’s account in a blog post published Friday, saying that it “raises an intriguing and equally disturbing possibility …”
The investors’ endorsement of Corsi’s criticism represents an escalation in shareholders’ campaign against the government over Fannie and Freddie’s profits. That effort already has been marked by hostility on the part of some parties — in January, Sen. Mark Warner, D-Va., decried the “character assassination” involved in the debate.
InfoWars is known for publishing anti-globalist and conspiracy theory-minded articles. In recent months, however, it has gained prominence thanks to its ties to President Trump, who during the presidential campaign appeared on the radio show of InfoWars’ founder, Alex Jones. Jones, who has a large audience, has said that he remains in contact with Trump.
Investors in Fannie and Freddie have long maintained that Obama broke the law in 2012 by changing the terms of the bailout to direct all of the companies’ profits to the Treasury. The firms were taken over by the government in 2008 and eventually received $189.5 billion in bailout funds, but since have returned $256 billion in dividends to the Treasury.
Corsi’s account, however, adds the new twist that the Treasury’s sweep of all the companies’ profits was undertaken to pay out Obamacare subsidies.
Asked to respond to Corsi’s lengthy and complex allegations, former Obama Treasury and White House housing adviser Michael Stegman, now a fellow at the Bipartisan Policy Center, responded only: “This is pure fantasy.”
Tim Pagliara, the head of Investors Unite, did not respond to an inquiry Friday afternoon.
Interviewed Friday, Corsi said that is wading into the topic because of recent court decisions related to the bailout and because of the prospect of Obama administration lobbying the Trump administration to eliminate Fannie and Freddie and give Wall Street a bigger say in the secondary mortgage market.
“I want to expose how the Obama administration just saw cash there, and they knew they could divert it to Obamacare, and they did,” he said.
Corsi said that he has no investments in Fannie or Freddie, nor any ties to investor groups. Rather, he favors the government-sponsored enterprise model for bolstering liquidity for middle-class home loans and is skeptical of Democratic influence on the companies.
He said that he is planning a series of exposes on the bailouts. Those will establish a more direct connection, he said, between the funds taken from Fannie and Freddie and the funds paid out as Obamacare subsidies.
Corsi’s first expose, which is hard to follow at points, makes the case that the Obama administration sought alternative funding streams for Obamacare subsidies after a federal judge ruled last year that some subsidies to insurers were made improperly.
They found that stream in the incoming profits from Fannie and Freddie, he said, which the administration began taking all of since the 2012 change in terms to the bailout.
His case is premised on a disparity in budget treatment of the government-sponsored enterprises between the White House Office of Management and Budget and the Congressional Budget Office, Congress’ budget scorekeeping agency. While the OMB has treated Fannie and Freddie as off-budget for accounting purposes, the CBO has determined that they should be viewed as government entities and their payments to the Treasury should be considered intra-governmental payments.
Corsi interprets the CBO’s budgetary opinion as a judgment that the Obama administration used “off-budget” funds to fund the Obamacare subsidies, allowing it to circumvent the restriction on paying those subsidies out of the budget.
The federal court that ruled that the payments were illegal allowed the government to continue making payments, pending an appeal.
And the CBO has always been explicit that its budgetary treatment of the government-sponsored enterprises differs from that of the administration, since before Obamacare was written or implemented. The CBO did not respond to a request for comment on Corsi’s article Friday.
Corsi, however, said that he has more granular data tying the revenue from Fannie and Freddie to Obamacare subsidies. “I’ve completed the analysis but have not had time to write it up,” he said.
As the author of the book questioning Obama’s birth certificate, Corsi would appear to have a lot in common with Trump, who for years was the most vocal proponent of the “birther” conspiracy theory. In 2011, however, he contradicted Corsi’s claim that Trump had hired an expert who concluded that Obama’s birth certificate was inauthentic. Mother Jones reported that Trump said instead that he had merely wished Corsi good luck.
