Fannie Spent $87 Million on Ad Campaign

Fannie Mae spent $87 million for an advertising campaign that helped thwart efforts by Congress in 2003 and 2004 to create a tougher regulator for the government-chartered company, according to a University of Pennsylvania study released Tuesday.

Fannie Mae, the largest source of money for U.S. home mortgages, paid for 10,797 print and television ads during the two years of the 108th Congress, the university’s Annenberg Public Policy Center in Philadelphia said.

The ads were concentrated in the Washington area and aimed at swaying the country’s 100 senators, 435 representatives and their staffs, the study said.

“The ads are like having first-strike nuclear capability,” said Kathleen Hall Jamieson, director of the center. “You don’t have to use it nationally or in lawmakers’ home districts, but it says your capability is there.”

The company’s outlay, including the nonprofit Fannie Mae Foundation, was 22% of the $404.4 million spent by all companies and groups on “issue advertising” aimed at Congress during those two years and more than double the $33.5 million spent by GlaxoSmithKline, the second-largest ad buyer.

“The company has significantly cut back its advertising for 2005,” Fannie Mae spokesman Brian Faith said. He declined to provide a dollar figure for the ad budget.

The ad blitz helped stall an effort in Congress, backed by the Bush administration, to create a regulator with authority to alter capital standards, reject new lines of business and oversee other operations at Fannie Mae and Freddie Mac, the study said.

The effort to toughen regulation gained momentum this year because of accounting errors at the two companies.

The House and the Senate are again considering creating a tougher regulator.