Frank and Gingrich keep sparring over who’s to blame for the subprime mortgage crisis

By Alex Katz, Globe Correspondent

WASHINGTON – A war of words between US Representative Barney Frank and Republican presidential candidate Newt Gingrich reached new heights today after a report that the former Speaker of the House earned at least $1.5 million in consulting fees from mortgage giant Freddie Mac.

It all started in October, when Gingrich during a GOP debate suggested that Frank should be imprisoned for his role in the subprime mortgage crisis. “If you want to put people in jail ... you ought to start with Barney Frank and Chris Dodd,” he said, referring to the Newton Democrat and the US senator from Connecticut. Then, following a report by Bloomberg News about Gingrich’s consulting fees from the mortgage agency, Frank today denounced Gingrich as “fundamentally intellectually dishonest.”

“He’s a man with no ethical core whatsoever,” Frank said of Gingrich in an interview with the Globe. “There are a number of conservatives whom I respect … Newt’s just never had any principles, so no I’m not surprised about this at all.”

At the GOP debate last week in Michigan, Gingrich was asked about his work for Freddie Mac in 2006, for which he was paid $300,000. He said that he advised the embattled firm as a “historian.” The Bloomberg story reported that Gingrich earned $1.6 million to $1.8 million between 1999 to 2007.

Gingrich today insisted that he wasn’t lobbying for Freddie Mac – he was simply offering “strategic advice.”

“I just want to emphasize this: I did no lobbying. I did not reach out to Capitol Hill. I was not directly engaged in that way. I gave them advice on what they could do,” Gingrich said on the Laura Ingraham radio show.

The government created Freddie Mac in 1970, joining it with Fannie Mae, in an effort to make mortgages more affordable. Their troubles began in the 1990s as both took on risky loans and more debt at the urging of the Clinton and Bush administrations, which sought to increase home ownership.

Gingrich added that he assumes he was hired because the company sought the counsel of someone who had served as Speaker of the House – as Gingrich did from 1995 to 1999. He told reporters in Iowa today that his staff is looking into the Bloomberg report, but couldn’t say for sure how much he was paid for his work.

A former Freddie Mac official, speaking on the condition of anonymity, said it was at least $1.5 million, according to report from the Associated Press.

The Gingrich campaign could not be reached for comment.

Frank has been long criticized by conservatives for his role in the subprime mortgage crisis, specifically regarding his oversight of Fannie Mae and Freddie Mac as chairman of the House Financial Services Committee.

Even as he faced questions about his work for the mortgage agency, Gingrich took another shot at Frank. “I wasn’t Speaker at the time, but Barney Frank was in Congress,” he said.

In an October 2010 Globe report, Frank said he missed the warning signs about the mortgage crisis because he was wearing ideological blinders. “I was late in seeing it, no question,” Frank said.

But he still maintains that Republicans are mostly at fault, pointing to today’s report about Gingrich as the latest example.

“It is part of a pattern of the Republicans blaming us for their failure,” he said. “We keep pointing out to people that the Republicans controlled congress from 1995 to 2006. Newt Gingrich was Speaker of the House, and he didn’t do a thing about Freddie Mac, not a thing.”