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Wednesday, April 13, 2005

They Obsessed on Enron. Now MSM TV News Ignores $30 Billion Fannie Mae Scandal

Dan Gainor, head of the Freemarketproject.org and a former colleague of mine at The Washington Times, asks the question posed in the headline above by a superb New York Post op-ed that you can read here.

Dan points to the stark contrast between the saturation coverage given the Enron and other business scandals in recent years by the MSM broadcast and cable news operations and the virtual invisibility of a government financial scandal that is vastly bigger.

Here's Dan's basic point:
"Fannie Mae, the government-sponsored mortgage association, has been battling a mounting scandal since last year. It has accounting errors of about $11 billion. That's more than 19 times larger than Enron's $567 million error. Fannie faces a Justice Department inquiry, an SEC investigation and an Office of Federal Housing Enterprise complaint.
"The mess has caused the departure of CEO Franklin Raines and several other top executives. And Fannie Mae stock has dropped roughly 30 percent, from nearly $80 a share to around $55. That's an added loss of more than $20 billion.
"All of this is news — $30 billion worth of news — but the only journalists out there covering it on a regular basis are print reporters. TV news is out to lunch."

You don't think the fact Raines was one of Bill Clinton's OMB honchos has anything to do with it, do you?

Anyway, if the financial disparity of the Enron and Fannie Mae scandals strikes you as extreme, consider how much more extreme is the difference in coverage between the two:
"Just doing a LexisNexis search produced 3,017 hits for 'Enron' — 1,385 hits on CNN alone. During that nine-month time period, Enron disclosed that it had overstated its earnings by $567 million since 1997.
"A similar LexisNexis search was performed for the term 'Fannie Mae' for those same media, from June 1, 2004, to March 1, 2005, again during the time the story was breaking. This search discovered a paltry 37 matches.

"Through those nine months, Fannie Mae was asked by its regulator to revamp its accounting practices, key executives resigned and about $11 billion in accounting errors were revealed."

After you read Dan's column, check out the blog commentary compiled by Michelle Malkin here.

Frankly, having covered government waste and fraud for years, I am not surprised that Fannie Mae's travails don't get much attention on the boob tube and certainly has received less coverage in the print media than Enron continues to receive. The reason is simple: There are staggering levels of waste and fraud in Washington, D.C. and in every state and local government.

But the MSM is by and large supportive of government programs to deal with every major and most minor problems faced by our society. Exposing the real magnitude of fraud, inefficiency and corruption in the government would thus undermine its claims to be able to solve those problems (if you think government has solved problems, name one). So government waste usually gets a pass with the MSM.

Lets you think I exxaggerate the scope of government waste and fraud, check out this Top 10 list compiled by Heritage's budget analyst Brian Reidl and the Congressional Pig Book compiled by Citizens Against Government Waste.

And what has this to do with the Blogosphere? Think what would happen to all that waste, fraud and abuse if bloggers were fisking spending bills before they are voted on by Congress and contracts proposed by federal agencies before they are signed? Think about it.