NEWS: Are Trump officials mining gov't data to target his enemies -- and covering it up?

The nation's top housing agency was being investigated for political interference. Then the investigators were fired.

If you wanted to design the perfect scandal for the Trump era, you couldn’t do much better than what’s unfolding right now inside the nation’s top housing regulator.

While the subject of mortgage data never sounds intriguing, beneath the alphabet soup of agencies that are responsible for home loans sits a story that is, in its essence, chillingly simple. Trump officials appear to have weaponized the U.S. mortgage system to dig up dirt on the president’s political enemies — and then fired the watchdogs who caught them.

Several stories this week, when taken together, paint a breathtaking picture of what’s happening inside America’s obscure housing agency and how it seems to be on the front lines of Donald Trump’s revenge agenda. This morning, I explained “why” this is so unusual on our latest DEFIANCE Radio broadcast (click the image below to listen to today’s broadcast, or read on for details).

Let’s walk through it all because this is becoming a very tangled web.

FIRST, Donald Trump’s housing chief keeps “discovering” mortgage crimes by Trump’s enemies.

Bill Pulte, the 37-year-old multimillionaire heir who runs the Federal Housing Finance Agency (which oversees Fannie Mae and Freddie Mac), has spent months sending criminal referrals to the Justice Department accusing Trump’s critics of mortgage fraud.

Who has he targeted? So far, New York AG Letitia James, who beat Trump in court… Sen. Adam Schiff, Trump’s impeachment nemesis… Fed Governor Lisa Cook, appointed by Biden and who Trump tried to throw overboard, unsuccessfully, as part of an apparent “takeover” effort at the Fed… and then just this week, Rep. Eric Swalwell, one of Trump’s most consistent public critics.

Now ask yourself, seriously: Why do all of these alleged “mortgage crimes” just happen to involve the president’s political adversaries? And why did none of this ever come up until Pulte — a Trump mega-donor and loyalist — took over the agency?

Pulte’s team seems to want us to believe that these cases arose organically like mushrooms after rain. But that explanation becomes impossible to believe when you see the rest of the story and how this agency few of us hardly ever hear about keeps popping up in our newsfeeds.

SECOND, one of Pulte’s lieutenants was accused this week of leaking super-confidential mortgage data, and officials who objected were recently fired.

The Associated Press uncovered emails showing that a Pulte confidant inside Fannie Mae took confidential, competitively sensitive mortgage pricing data and handed it over to Freddie Mac (Fannie’s main competitor). This is reportedly the kind of conduct that triggers antitrust investigations in the private sector, and to insiders, it was a massive legal red flag.

Senior Fannie Mae officials immediately objected, according to the report. They said this could expose the entire institution to accusations of price-fixing. They elevated it internally. They documented it and sought legal guidance.

And then… they were fired. The axed employees include the mortgage giant CEO, the top lawyer, the executive running single-family mortgages, and others who were inquiring. All gone within weeks. Meanwhile, one of Pulte’s loyalists, who was on the same email chain, was promoted to co-president of Fannie Mae.

A lot of ink has been spilled about Trump’s “mob-like” tactics. But if you’re looking for the moment where a federal agency starts to resemble his mafia crew, this is it. It doesn’t stop there, though.

THIRD, internal watchdogs tried to investigate misuse of the mortgage data, and they were purged, too.

The Wall Street Journal broke the story that that internal ethics officials at Fannie Mae ALSO began investigating whether Pulte’s team was improperly accessing mortgage files belonging to Trump’s political foes, as a result of internal complaints from inside the housing agency itself. That’s the data that led to criminal referrals against Letitia James, Eric Swalwell, and others.

Those officials apparently did what investigators are supposed to do. They escalated the issue to the Inspector General. Then IG’s office reportedly forwarded it to the U.S. Attorney in the Eastern District of Virginia. But Trump had just installed Lindsey Halligan — the same prosecutor he handpicked to indict Comey and Letitia James — into that job.

Halligan is said to have been annoyed to receive the information of political meddling in mortgage data. Why? Because if she pursued it, the information would have to be turned over to Letitia James’s lawyers as part of discovery.

So what happened next? The Inspector General at the housing juggernaut was removed from his post. His office is now vacant. A host of ethics officials and investigators were also fired. And amidst the shakeup, several of Pulte’s allies were elevated into senior positions under the agency. In other words, it appears that the people trying to expose the misuse of mortgage data for Trump’s revenge campaign were eliminated, while loyalists were promoted.

FOURTH and finally, the mortgage charges themselves are collapsing.

The Justice Department indicted Letitia James weeks ago for alleged mortgage fraud — based on that criminal referral from Pulte’s housing agency — claiming she violated her loan terms by renting out her home years ago. But Politico obtained the mortgage contract, and it turns out the contract explicitly allows the property to be rented under certain conditions.

James and her lawyers went in front of a judge this week to ask the case to be thrown out, which the judge has said she’ll rule on before Thanksgiving.

Meanwhile, the mortgage fraud allegations against Senator Adam Schiff appear to be falling apart for similar reasons, i.e. that the claims from the housing agency were so flimsy that they’re allegedly not prosecutable.

* * *

FINALLY, the overall pattern here becomes so obvious it hits you in the face.

The White House installed a diehard loyalist atop the nation’s main housing agency. That agency continues to supply what it believes is damaging information about the president’s enemies to the Justice Department. The Justice Department opens federal investigations. And then it tries to charge those Trump enemies with crimes (real or imagined) to humiliate them. Now the people probing possible corruption have been thrown out of government.

You could say this is a dangerous drift of federal power toward abuse. But you’d be wrong. It’s much more than that, in my view. “Open-air authoritarianism” is a better phrase for it. When the government uses the machinery of the federal state in an apparent effort to hunt political opponents, all trust in the system begins to collapses.

Although the FHFA is an agency that most Americans can’t even identify, its obscurity doesn’t make this story any less alarming. There are dozens of obscure agencies where a determined president could carry out political vendettas without the public noticing. FHFA is merely the first to be exposed. There will be more, and surely there are other ways such agencies are being abused that we don’t know about.

I’ll also note there is something especially worrying about the mortgage system — of all the different bureaucracies that would be weaponized — being turned into a political weapon. The data in that world touches millions upon millions of Americans (just like the IRS, which is already under scrutiny as a place where the White House has an appetite for mining data to go after Trump’s opponents). Fannie Mae and Freddie Mac exist to stabilize the U.S. housing market, not to supply opposition research for the president.

If the public loses faith that mortgage records are private, or that regulators are neutral, or that home loans aren’t being reviewed for political loyalty, the consequences could be catastrophic. In the most extreme case, banks could stop trusting federal guarantees, investors could doubt mortgage-backed securities, and borrowers could face higher rates or tighter standards. That’s how a market worth trillions could begin to wobble.

Mark my words. This story is going to get bigger. Trump allies at FHFA are reportedly using sensitive mortgage data to target the president’s political enemies and recently fired the people who were investigating the allegations of impropriety. At best, this seems to be reckless subversion from within the bureaucracy and, at worst, a full-blown coverup.

I won’t stop pointing out that these are the types of actions authoritarian governments take in their early stages. They weaponize the dullest corners of government, where no one is looking, as a way to silence critics. But we are looking now. We are pulling the thread. And we will keep pulling it for years to come until it’s all out in the sunlight.

Your friend, in defiance,

P.S. WHAT’S HAPPENING ON DEFIANCE NEWS

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