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WASHINGTON — Now it’s Newt’s turn to take the heat.
Former House Speaker Newt Gingrich, rising in the polls for the Republican presidential nomination, is coming under fire for a $300,000 consulting contract he got with home-loan giant Freddie Mac before the housing market collapse.
Gingrich, asked at a Republican debate Saturday night about what he did under the contract, said he lectured company officials on their lending practices. “As I said to them at the time, ‘This is a bubble. This is insane. This is impossible,’ ” he said he told them.
Gingrich, who has slammed Democrats Chris Dodd and Barney Frank for encouraging easy credit that helped cause the financial collapse, said he guided the company as a historian, saying: “I offered them advice on precisely what they didn’t do.”
But former Freddie Mac officials are saying Gingrich’s lucrative arrangement was more traditional in nature: he was hired as a liaison to Republicans in an effort to protect the company’s unique public-private status from further regulation.
A person familiar with Freddie Mac’s internal discussions told Bloomberg News that Gingrich never shared his concerns over the company’s business model with then-CEO Richard Syron.
A Gingrich spokesman said he provided the company with “advice and counsel about how to improve,” sharing his thoughts about once a month, although he said he couldn’t explain more because of a confidentiality clause in the contract.
One of Gingrich’s rivals, former Godfathers Pizza CEO Herman Cain, was in Iowa outlining his foreign policy after a disastrous answer to a question on Libya at a Wisconsin newspaper editorial board.
“We need to clarify our relationship with friends and enemies around the world and make sure we stand with our friends,” Cain said while campaigning in Iowa.
On Monday, asked whether he disagreed with President Obama’s Libya policy, Cain fidgeted, looked upward, and stalled for time as he reached for an answer.
“OK, Libya. President Obama supported the uprising, correct? President Obama called for the removal of Khadafy? Just want make sure we’re talking about the same thing.” He continued: “I do not agree with the way he handled it for the following reason — nope, that’s a different one … Got all this stuff twirling around in my head.”
Cain’s staff explained he was working on only four hours sleep after taking a long flight, and Cain questioned the media for dwelling on the long pauses in his answer.
A new Iowa poll by Bloomberg shows a near tie between four front-runners in Iowa, with Cain at 20 percent, Ron Paul at 19, Mitt Romney at 18, and Gingrich at 17.
Texas Gov. Rick Perry is down at 7 percent in the poll, but yesterday rolled out a plan to “uproot” all three branches of government.
Perry said he wants to slash lawmakers’ pay in half and make Congress a part-time legislature.