washington, tonight on c-span's "q&a." >> >> from minneapolis, the life of hubert humphrey is profiled in "the contenders." [shouting]

>> stay right there. do not move. >> mr. chairman, my fellow americans, my fellow democrats, i proudly accept the nomination of our party. [applause] this moment, this moment is one

of personal pride and gratification. yet one cannot help but reflect the sadness that we feel over the troubles and the violence which have erupted in the streets of this great city. and for the personal injuries which have occurred. [applause] >> that is hubert humphrey accepting the 1968 democratic nomination for president. it was at chicago's hilton hotel. the democrats had gathered for the convention in the midst of the vietnam war while thousands of protesters demonstrated outside. the unsuccessful candidate in 1968, hubert humphrey is the focus of this week's program. we are live from minnesota history center. mick caouette is the documentarian of hubert humphrey's life. we are standing in the middle of an exhibit about the

tumultuous year of 1968. i want you to set the stage for people. as 1968 dawned, this country was in an uproar about the vietnam war. set the stage. >> the vietnam war had been going on for 15 years. it was obvious to everyone that the war was not being won. it reached all the way to the american embassy in saigon. president johnson's approval ratings just plummeted. mccarthy had been in the race in the fall. bobby kennedy was joining the race. it was utter chaos. right after, president johnson resigned, three days later martin luther king was assassinated. the first part of the year was a terrible chaos. >> people were turning on their

radios to wake up and there seemed to be another huge story every day. we will try to tell some of that story. we will be here for two hours. as we are here, we will learn more about the history of the time and the biography of senator humphrey. we will begin taking your telephone call so you can be part of our discussion. what is important for young people to understand is what is different about the wars we fight today is the draft. this was real in the sense for american families. a very different way than the professional army that we have today. can you talk about that? >> the draft was the point at which the protest started. when the draft was instituted. now people have a choice. if they are against the war, they can stay away. in those days, there was no choice. you either went to canada or did something to get out of being drafted. that is what caused the protests. people were not even able to

vote until they were 21, but they were being drafted at 18. that is probably the biggest difference. >> was it fair to say that every american family had a personal connection to this war? >> some have someone who went to the war and someone who was against it in the same family. in fact, lyndon johnson and robert macnamara, their kids were against it. families were broken over it. much like the civil war, i guess. >> the other thing that people should understand that made this real was television. television was bringing it into people's living rooms every night. when you talk about the effect of that? >> it was wide open because nobody had really done any kind

of -- television was not restricted. it was all brand new. nobody in the administration had any control over it. the journalists were just going out there and getting whatever they found. we do not have that now. it is much more controlled on the battlefield. we were seeing things that you would not see now. people being wounded. it had a profound effect on the country. another reason why people came out against the war because they were seeing it all the time on television. 300 body bags were coming back every week. they were showing the body bags coming back. it had a profound effect. it changed the average person's mind. >> we have to remind people that the war started before lyndon johnson's term. it had been raging for 15 years. lyndon johnson's attitude about the war was what? >> i think he was confused about it for a long time, but it was important to him to win the war. it colored everything that he did. when people tried to talk about

any kind of settlement, he would not do it. he was interested in winning the war. once he got into it, he did not have a lot of options. that was the only one he wanted. he had no other options. it affected when he left office, too. he wanted someone to come into the office to continue this war policy. >> lyndon johnson and hubert humphrey became teammates in 1964, following the assassination of kennedy. lyndon johnson ran in his own right. what was the relationship like? how was this period for senator humphrey? >> the intensity in vietnam started at the same time he became vice president. the tonkin gulf incident in the summer of 1964, there was a resolution in congress that lbj pushed for and it was passed. humphrey signed on to that. he was not yet vice-president. as did eugene mccarthy and others.

the convention came later in the summer and humphrey became vice president. he walked into the beginning of johnson's involvement with the war. campaigned all through the fall. they never really talked about vietnam during the campaign. it was more about barry goldwater being trigger happy. humphrey and johnson were the peace candidates. goldwater was the war candidate. vietnam was not talked about. >> in 1964. >> in 1964. >> they were talking more about nuclear annihilation. they won by a landslide. in the spring, in the early part of the year, there was

another incident in vietnam. johnson called a cabinet and adviser meeting. he has already decided to bomb north vietnam in retaliation. he asked people around the table what they thought of this. everybody pretty much agreed and humphrey said it was not a good idea. and he backed off. he had written a memo earlier that we should not get involved. this is not a good idea, both to you politically and for the country, people will not understand it. he brought it up again at the meeting. he spoke up again at this meeting. johnson got angry. humphrey went back and wrote another memo, long and detailed. at that point, he was completely frozen out of any discussion about vietnam. >> we have two videos to show you. the first one is 1964. lyndon johnson had been operating without a vice president. this was after the kennedy assassination. there was a great deal of speculation coming into the convention about who his choice would be. here is a film from the 1964 convention as lyndon johnson announces his choice for vice president.

>> the next vice-president of the united states -- my close, my long time -- [applause] my trusted colleague -- [applause] senator hubert humphrey of minnesota. [cheers and applause] >> democrats and most republicans in the senate vote for education legislation, but not senator goldwater. [applause] most democrats and most republicans in the the senate

voted to help the united nations and its peacekeeping functions when it was in financial difficulty, but not senator goldwater. [applause] >> i cannot help but think that particular moment how far we had come, all the hard work and effort, this was a great moment in my life. >> mr. johnson said in his judgment, mr. humphrey was the best man to be president in case anything happened to him. no longer is the vice presidency just another job. ♪ >> that video is from mick caouette's documentary on hubert humphrey, "the art of the possible." first of all, the scene of the energetic hubert humphrey

addressing the crowd and having the crowd eating out of his hand and the cutaway to lyndon johnson, who did not seem to share the moment. what was happening? >> he did not like the spotlight being taken from him. humphrey was believed to be a better public speaker. he was a little bit upset about humphrey taking the show away. he was that way. that was lyndon johnson. the goldwater part of that speech was written by a number of people. >> it was written by bill moyers. he wrote that. there was a call and response kind of thing that caught on. that was an early one. >> call and response? >> "not senator goldwater." and then the crowd respond. >> senator humphrey had ambitions for the presidency for quite a while. he toyed with it in 1952 and made a real bid in 1960. harry was finally at the convention accepting the vice- presidential nomination. you can see how excited he was about the moment.

he earned the nickname "the happy warrior." he loved politics, right? >> he loved politics. he was joyful about politics. he believed it was a way to better the country, to change the country. it was an innocent way. he believed in the american people. he really believed in our system. that was the way for him to change the country. >> another clip, and this was later on in 1974 when hubert humphrey made audiotapes. we're going to use some of those throughout the program. he talks a bit, and this is just one example, of the relationships you referenced. and how it became very testy

between lyndon johnson and hubert humphrey over vietnam. he reflects on some of the ways that lyndon johnson used the powers of the office to keep his vice president under control. let's listen. >> if anybody would ever tell you that johnson was extravagant, it surely was not with this vice president. many times he would say to me, it was better to take a smaller plane. if you have a plane that is too big, there will be too many people who want to ride with you. you will be encumbered with people that see there is an extra seat that has not been used. from time to time, on short trips, up and down the atlantic seaboard, i would take one of the smaller planes that were available. for our longer trips, we used the jet star. never, in the continental united states, did we use air force one

or two. those were to be only used for overseas trips. at no time was i ever permitted to bring a newspaper man or a person of the media with me on any trip within the united states. the president forbid it. i respected his command and his wish. i gather he felt that the vice- president should be heard and seen, but not reported upon too much. >> of course, lyndon johnson had been the majority leader in the senate. these two men had a long relationship and served in leadership together. could you talk more about how johnson used the levers of power

to control hubert humphrey? >> he had an argument with johnson about vietnam, and johnson froze him out for at least a year. about any talk about vietnam or any foreign-policy, basically. he cut off his privileges. he shortened his staff. he did not want him speaking out about vietnam. at one point, he tapped his phones. he did a number of things to control humphrey. he did not want him speaking out against vietnam. he did not want him speaking out about anything. he wanted him to keep quiet. he had a way of calling them "my planes" and "my boats." he had a possessive attitude about that. humphrey dealt with it a lot. he would give three or four speeches a week, and he would have to call and get permission for a plane for each one. the freeze lasted about a year. >> did hubert humphrey talk

about how he reacted to this? he had been unhappy. >> he was miserable for a long time. johnson was shutting him out of the inner circle. he was on the outside. he was not happy during that time. he wanted to be involved in what was going on. it was a bad time for him. then he went back to vietnam and things changed in 1966. >> we are going to walk around this exhibit tonight and give you a sense of the exhibit that has been put together. showing the year 1968. a focus on politics. i want to remind you about your participation. in about 10 or 12 minutes, we will start taking calls. here is how you can do it. the telephone numbers are on the screen.

we really look forward to your comments on 1968, the year in which hubert humphrey was a contender for the president of the united states. why don't you walk along with me and we will go to our next stop here? how did you first get interested in hubert humphrey? >> i grew up here, so he was always in the air when i was a kid. i spent some time working here and saw his archives. for a documentary filmmaker, that is a gold mine. >> hubert humphrey had four children. are they still here? >> his daughter is no longer alive. she died a couple of years ago. his grandson is more involved in politics than the others. the sons are basically in sales. one works for an advertising agency. >> we are at the exhibit about the politics and political life of hubert humphrey. it really was his life. he was not born in minnesota. >> he was born in south dakota. 90 miles from the minnesota border in one of those little

railroad towns. he was born in 1911. it was a remarkable little town. his father was the druggist. his mother was methodist, a social gospel christian. he got politics in his father's drugstore and then the social gospel. as bill moyers said, great combination of the preacher and the politician. >> he went to a pharmacy school himself. how did he end up in politics? >> he went to pharmacy school for a job.

he always wanted be in politics. he did it for a short time to help his father with the drug store. i do not think he ever really want to be a pharmacist. >> he ended up getting a doctorate as i understand. >> he went to get a master's degree. >> why was he studying politics? >> initially, he was going to get a doctorate and teach. that was his first idea. he was so good at public speaking and so good at communicating, a lot of people convinced him to run. he ended up coming back to minnesota and becoming the mayor of minneapolis. >> when did he serve as mayor? >> he came back from lsu from grad school. that was in 1940. minnesota had been a republican state and never elected a democrat to the senate. the non-republicans were divided between the democrats and the farmer- labor party. he helped to unite the two parties. he built himself his own political base. the city was corrupt, all kinds of problems with segregation. when he first came, the "nation" magazine called it the

capital of anti-semitism in the united states. when he left, he got an award from the national council of christians and jews for what he did. >> is the dfl still active in politics today? >> he was the greatest negotiator of the group. >> what does it stand for? from an ideology standpoint? >> at the time, it was a group of farmers and laborers who had differences with more professional democrats. fdr democrats. there was a split there. they just did not like each other and humphrey was one of the people that convinced them they will never win an election if they did not get together. >> he ran for senate when?

>> he ran for senate in 1948. >> we will talk a little bit about the speech. i have a clip from 1960, when he first seriously thought about running for president. this is one of those joy of being a politician. let's watch. >> how do you think your race is going? >> it has been an uphill fight. i think we have been doing quite well. >> what has been the most exciting part of the campaign? >> right now. i just had it. >> thank you, senator. >> this is good fun. politics ought to be fun. >> yes, sir. >> ♪ vote for hubert, hubert

humphrey, the president for you and me ♪ >> you see him enjoying life. did he bring this to his politics all the time? >> he would light up the room. >> it would be 11:00 at night and he would get off of a plane and work until 3:00 in the morning. he would still be like that. >> what were some of his other characteristics? i read that he was known for talking a lot. >> absolutely. he was also a good listener. people missed that part. he did talk a lot. he would come with a prepared speech and talk for an hour. he knew a lot about a lot of things. he was really intelligent. astounding memory. they estimate that he may have known up to 5000 people by first name. >> what a gift, to be able to remember names. >> he could remember their name, the family's name, what they did for a living. remarkable memory. >> we will start taking some calls. and then we will learn more about his political philosophy. first up is ohio.

>> it is a wonderful program to be participating in. >> thank you. >> you mentioned 1948. i remember hearing an actor named ronald reagan who endorsed hubert humphrey in 1948 for the u.s. senate. when you think about it, were they on the opposite end of the spectrum? even though they were both democrats at that time. i want to find out what hubert humphrey's relationship was with barry goldwater in the senate versus what their private life was like? did hubert humphrey and jack kennedy get along very well when they were running against each other in 1960?

in 1956, when they vied for the vice-presidential nomination to run with adlai stevenson? >> thank you so much. we're going to take those in order. his relationship with ronald reagan? >> he was a lifelong friend of ronald reagan. ronald reagan was pretty much the same politics back in those days. he was the head of the actors'

union, the actors' guild. he was a democrat and he had the same philosophy. ronald reagan changed, but humphrey remained the same. but they did remain friends. a great respect for each other. >> goldwater? >> they were even better friends. the best story i've heard about their friendship, they were giving speeches in iowa on the back of a hay wagon. they ripped each other apart. later on, someone saw them having dinner together. they were good, good friends. >> before we talk about kennedy, talk about the united states senate. people still recognize the names from history books today. was there bipartisanship? did people work across the aisle? >> there was a lot of camaraderie. humphrey was friends with a lot of republicans. it was more cordial and there was more camaraderie than there is now. i am not in the senate now, but they were very close. >> jfk and their relationship? >> in the early years, they voted together on many of the same bills. humphrey helped him with farm legislation because he knew nothing about it. their relationship changed dramatically in 1960. during the primaries and then the elections. >> in what way? >> they have these debates in the primaries in wisconsin and west virginia. they got to know each other that way. when kennedy became president, humphrey gave him many of his ideas to use in the administration. he was the idea factory in the kennedy administration. the peace corps was one of his ideas.

>> let's take a call from indianapolis. jerry, you are on the air. >> how are you doing? i love your show. i have a question. back in 1948, humphrey spent time with martin luther king -- >> we will spend quite a bit of time talking about the civil- rights movement. what we get into that part? this is from your film.

hubert humphrey talks about his view of the world and his brand of liberalism. let's listen. >> [no audio] >> we do not have that clip. we are getting it ready. help us understand what informed this? >> to answer the question, the civil-rights was in him from the time he was born. it was not new to hubert humphrey. lyndon johnson had to deal more with the idea of the issue of race and getting elected. it was quite different for him. humphrey felt and believed deeply what he was up against. what he did in that speech, lyndon johnson called the most courageous political act in the

20th century. he could have destroyed the democratic party. he could have destroyed truman and his own career. he really believed in civil- rights. >> the caller was asking about humphrey's commitment compared to the other two, to lyndon johnson and to john kennedy. can you make a value judgment? >> johnson was more in line with humphrey. kennedy was a reluctant civil- rights person that he came to later. bobby came to it even more. it was an issue for humphrey from the beginning. and it was an issue for johnson for many years, too. humphrey was involved with the african-american community. he did know a lot of the leaders. he did not know martin luther king in 1948, that early. but he knew other leaders.

>> let's listen to cynthia in iowa. >> good evening. i was a member of the television news team in iowa, but i happened to be in washington, d.c., reporting the day we withdrew from vietnam. i had the pleasure of interviewing hubert humphrey on that very day. i asked him how we felt about losing the vietnam war. he said he, too, was a casualty of the vietnam war. he was quite emotional and had a tear in his eye. i wondered if you could talk more about his vietnam policy. >> the two trips he made to vietnam while he was vice- president -- the first trip was scheduled for him.

it was a proscribed trip with all the stops planned for him. he was watched pretty closely. he saw only the good side of the war. the second time, he decided to go out on his own. he went to hospitals, talked to people. at that point, he all the other things going on what the war. he realized it was lost. he came back from the second trip knowing that the war needed to be over. he was boxed in. but he had been speaking out for the war for the last year. lyndon johnson was not going to let him speak against the war. he was in a bad situation. that conflict lasted all the way through 1968. >> the two great issues in his political career were civil rights and the vietnam war. the 1948 speech really launched him on to the national stage. we're going to listen to that speech to the convention in philadelphia in 1948. we will be joined by another

guest will me come back. juan williams, the author of a number of books that deal with civil rights and american history. to the 1948 clip now. >> mr. chairman, fellow democrats, fellow americans, i realize that in speaking on behalf of the minority report on civil rights that i am dealing with a charged issue. an issue which has been confused by emotionalism on all sides of the fence. i must rise at this time to support the minority report, the report that spells out our democracy. a report that the people of this country can and will understand and a report that they will enthusiastically acclaim on the great issue of civil rights. [applause] to those who say that we are rushing this issue of civil rights, i say to them, we are 172 years late. [applause] after all, i have been the

destroyer of the democratic party, the enemy of the south, the, quote-unquote, "nigger lover." i never felt so lonesome and so unwanted in all my life as i did in those first few weeks and months as a united states senator. >> that second clip was hubert humphrey reflecting on what it was like coming to washington in 1949 after his big speech in the 1948 convention. juan williams, welcome to our conversation. how important in the history of civil rights was hubert humphrey? >> that 1948 speech was truly a landmark. that is the moment at which you see organized politics get behind what we think of as the modern 20th-century civil-rights

movement. the democratic party shed some much of the paralysis. it had been reliant on the dixiecrats. remember, the south dominated the democratic party politically. you see someone rise up in the democratic party in the form of this very public convention. his voice is heard nationwide at the convention. he is saying to people across the land, this is an abomination. this is not what the democratic party, not what the american people should be standing for. he is speaking in terms of national morality. and they call to justice. he does it as a cost. many of the dixiecrat leaders walked out of the convention. it has a tremendous consequence that will fall like dominoes throughout american history. >> name some of those who walked out of the convention. >> i am trying to think. strom thurmond would be the big one. you had eastland, you had some

of the other governors and members of the senate who were right there. >> how risky was it for hubert humphrey to put his neck out on the line for civil rights? was it as controversial here at home? getting your talking about after he became senator. >> know, when he was running. >> he was still mayor, but he was a candidate. >> to speak out for civil rights, was that considered -- >> it resonated here fine. he came back as a hero here. in other parts of the country, it was a real problem. >> was there any risk for truman? >> absolutely. >> how did truman feel about it? >> when he first started the speech, truman called him a pipsqueak. he was really upset about it. he thought he had ruined the election for him. he was upset. truman condemned him for it. he learned later on that it had helped him.

he turned it around and used it to get the african-american vote in the north. and that helped him win. >> want inflamed his commitment to civil rights? where does it come from? >> nobody knows. he got it from his father, but where did his father get it in the middle of south dakota? his father raised him to believe that people are people. and they had their own form of color blindness. it was remarkable. there were no african americans in the small town he was in. one catholic family, one jewish family who both had crosses burned on their lawns. no one can come up with a reason. it certainly was there. >> let's go to another call. andrew from new york. >> good evening. how are you doing? >> your question? >> i was hoping that you could

comment on the relationship between senator robert kennedy and hubert humphrey and how it developed from 1960 to 1968 when they were vying for the democratic presidential nomination? >> ok. >> the rfk relationship started in 1960. he did not have much of a relationship with him before that. it did not start off well. the cause of the way that humphrey was treated in the primaries by the kennedys. he learned to like robert kennedy. he campaigned for kennedy in 1966 when he ran for the senate. in 1968, they had a meeting. they agreed that if humphrey got the nomination, kennedy would support him. if kennedy got the nomination, humphrey would support him. he was a party person.

bobby kennedy, and so was humphrey. >> next up is ron from washington. >> i would like to jump forward to the 1968 campaign. can you elaborate -- my recollection is that president johnson tried to scuttle humphrey's effort. that was one of the closest popular elections in history. it is my recollection that it -- the bombing pause, if that had been started a month earlier, it might have made the crucial difference. can you elaborate on that? thank you. >> did lyndon johnson tried to scuttle his bid for the white house? >> he did not help him very much. he did these kinds of things where he had nixon at the ranch and then hubert humphrey at the ranch. he would tell humphrey that no press could be there. part of the belief among

historians is that johnson believed that humphrey might end the war and make him look bad. nixon played a few dirty tricks, and so he came out for humphrey at that point. he thought he might lose texas at the end. he was really late in the campaign when he started working for humphrey. >> i want to bring the story back to civil rights. civil-rights legislation is being pushed forward. tell that story. >> humphrey's involvement is as the democratic whip. you have lbj as president. basically the inheritor of

kennedy's attempt to get civil rights legislation passed. kennedy, there was some doubt about his commitment, was he willing to pay the price in terms of the southerners that would oppose it? after the assassination, johnson had a commitment to get this done in honor to president kennedy. >> does he make humphrey the point man? >> humphrey becomes the point man in the senate. mike mansfield is the majority leader, a democrat. but it was humphrey, the man who has been persistent in terms of calling for civil rights and justice as part of the democratic agenda. he takes up the cause in the senate. he is up against it because the rules were different then. you could filibuster to no end. i believe the numbers were something like 67 votes required in order to end the filibuster. if you look through history, there are few points at which

you get enough votes to end a filibuster. it is almost unheard of. it takes a great deal of effort by hubert humphrey to hold off a republican effort to prolong the filibuster. he was finally able to do it. what is interesting is the legislation cannot even be put through the normal channels. if you put it through the judiciary committee, it would go through senator eastland. it is kind of an extra judicial process being put in place. and in the bill gets its overwhelming passage. >> what were the opponents to civil rights constitutional arguments? >> we have a right to run our business. we have a right to allow whoever we want in. the constitution allows us to

do that. that was one of the main arguments. there were a number of them. the dixiecrats, the southern democrats were the biggest obstacle for him. he had a number of republicans that were on his side. there were a coalition of republicans and democrats that made it happen. there was no way you're going to change any of their minds. it was an interesting group. the opposition was conservative republicans. barry goldwater was against the civil rights bill. and the dixiecrats, those were his obstacles. >> the drama of this filibuster coming down to the wire. we have another clip. this is hubert humphrey and strom thurmond debating the

1964 civil-rights bill. two clips back-to-back. let's watch the debate. >> we know that fellow americans who happen to be negro have been denied equal access to places of public accommodation. denied in their travels a chance for a place to rest and to eat. >> it is not public accommodations. it is invasion of private property. >> in the city of birmingham, alabama, there was an ordinance that said if you're going to have a restaurant and you were going to permit a negro to come in, you have a seven-foot wall down the middle of the restaurant, dividing the white from the colored. how foolish this is. isn't that an invasion of private property? >> we live in a country of freedom. under our constitution, a man

has a right to use his own public property as he sees fit. these bills create no jobs. so who jobs are these negros going to take, the white man's jobs or the negro's jobs? >> we must as individual citizens speak out against prejudice and discrimination. we must be willing to accept the fact that every american is entitled to equal rights under the constitution and under the law. no less than that. >> the most difficult task that i have as the floor leader of the civil-rights bill is just being there. having to watch every move and make sure that we have 51 senators present or readily available. one of the tactics of the opposition is to call for repeated quorums. it means we have to produce 51 senators to answer the roll.

>> that story, always to have 51 supporters of the legislation on the floor. how did he organize people? >> he had teams that would rotate. if they didn't get a quorum, the senate would be shut down. it would work in the favor of the anti-civil rights people. they were able to bring only two or three people. they had this rotating basis. they did things like drive to baseball games and take a senator out of a baseball game. they did all kinds of things. they had a list and they had a schedule for senators. it was well done. they had some moments when it did not work. they had to get people from outside the senate. >> was the opposition largely regional? >> you had goldwater, for

example. he is a westerner. he was from arizona. his opposition was libertarian. this is a free country, a matter of private property. you should not be telling a man what to do. you see much of this gets reflected in strom thurmond's language. he is not speaking in terms of racism. he is saying this is a violation of my rights as an american to make personal choices and freedom. humphrey is saying, this is ridiculous. this is not a genuine argument. what you are doing is perpetrating the worst kind of racism. that becomes the argument. it is interesting to go back and listen to that clip. we have such arguments today about the jobs in our country. you can hear strom thurmond

saying, this legislation does not produce jobs. he says that negros will take the white man's jobs. clearly, he was comfortable saying this. it had some effect in that era. it is not as if he was speaking into a void. to the contrary, it was generating a political response and strong opposition to the civil rights legislation. >> let's take a call from west virginia. >> i am so glad you called me. this is wonderful. ofaven't spoken but to one the sons of senator humphrey. and last well, since he died over the years. i am the fellow who sang the hubert humphrey songs. i have such a wonderful love for him. over the years, he took me everywhere. i sang everything. he taught me politics.

he had great respect for me because i came from a family -- my father worked railroad, my grandfather mccoy worked the coal mines. hubert humphrey heard me sing on a radio station in 1960. he gave me $25 a day to travel with them. teddy white became one of my best friends. teddy taught me a lot, and everyone in minnesota that i have met throughout america, the henry fondas and the presidents and vice-presidents, people all over this country. i am 77 years old. i did records for capitol records for years. i'm doing the stories about the hatfields and the mccoys, my mother's family.

hubert humphrey was, to me, like my father. >> thank you so much for that personal story. do you know the songs? >> i will not sing them, but i know them. he traveled with him all the time. he was with him very closely. he is one person i had lost in this whole search for interviews. i am glad he is alive and well. >> 77 years old. thank you for calling in and adding that personal touch. we have to get one more relationship established. he developed a friendship with martin luther king? >> he had a relationship with king around legislation. if you look inside the reaction of the black community, there were lots of people who were militants who did not see the value of this legislation.

king is saying, this is a necessary step. if you go back to the great march on washington in 1963, in large measure, it is to say to the congress, pass the civil rights act. humphrey is one of the great supporters of this. he is at the march on washington. he is someone who is emphatic in his support. even as you get people saying, we should not have a march on washington. they're just trying to pressure us politically. humphrey thought it was a good and necessary step. >> at the early stages of the filibuster, he met with martin luther king. he said to him, i want you to know that we are on the same page. his policy was to treat them with respect.

use the humphrey way rather than the johnson way. if i say things to them in public that you do not like, i am just saying this because we want this bill to get passed. >> we can hardly do justice to his career before he ran for president. at least to get some sense of his work on the national stage in 1968, he decided to run for president. we did not establish this, but lyndon johnson made the decision early in 1968 that he would not seek the office. that is setting the stage. at that point, how many democratic contenders are thinking about challenging lyndon johnson? >> bobby kennedy and eugene mccarthy. >> and they were anti-war candidates? >> yes, they were. >> when did johnson announce? >> early in 1968. >> was that a surprise to the

nation? >> it was a shock to humphrey. johnson showed up at humphrey's apartment. he said, "listen to my speech. i have two endings. i am not going to tell you which one. you should listen to the speech." he had not decided yet. humphrey was in mexico. he was called out to watch this broadcast. he announced that he was leaving the office. because of the chaos, they thought they heard that he was immediately leaving office, which would have made humphrey president. there was all this commotion. they realized he was leaving at the end of his term. it was a complete shock to him, and the country. >> susan, as you asked about who was running against him, it really was mccarthy. he is the one that was in new hampshire. he was taking on johnson. johnson is not actively campaigning, but he had people all around.

mccarthy is the anti- establishment, anti-johnson candidate. he has support from people who were superstars. we still know barbra streisand. they were people who were anti- vietnam war. all of the college students are emphatic about mccarthy. gene mccarthy does surprisingly well in new hampshire. it legitimizes the idea that johnson is vulnerable. that is after mccarthy's success, is when you start to see robert kennedy willing to jump in. people are questioning why he is jumping in to block mccarthy's momentum. that sets the table. even as hubert humphrey is thinking that he is trying to pull back on the war, he is pressured by the fact that he

is loyal to the man who gave him the vice presidency, lyndon johnson. it is one of those wonderful political stories. hubert humphrey is a good guy. he is not going to put lyndon johnson in a position where johnson feels that he is being undercut by his number two. but at the same time, and as you discussed earlier, johnson is totally dismissive of humphrey. especially his contribution or desire -- this war is not the right war. >> let's get to another call. this is larry in sherman oaks, california. >> i am a big fan of humphrey. for many years, it took me quite a while to accept the fact that he was never going to be president. even after his passing. i was able to channel that into putting up my own humphrey website. in 1998, i visited the humphrey institute.

we looked and the catalogs and did not see any items surrounding middle east war. i would have thought humphrey would have made some speeches or interviews or something. i did not see anything. that surprised me. >> was he involved in middle east policy? did he speak out on it? >> i do not think that was at the forefront. there was too much else on his plate. i do not remember seeing anything either. i have been through all of his archives. >> the early primaries and lyndon johnson's announcement sent things into warp speed. it was the year of assassinations, the first being the assassination of martin luther king. what happened in the country with the king assassination? >> it is hard to summarize it. you have riots in cities like washington, d.c., chicago, kansas city.

it becomes a national moment of crisis. you had people fearful that there was going to be a large- scale racial war in the country. the unrest that surrounded the vietnam war is still present, but now it becomes a background. king was an opponent of the vietnam war. he said it was an unjust war. and why are black and white boys dying in this war? there were people who were trying to join the civil rights movement with the anti-war movement. king, who had not been political, is becoming more political. there are people inside the civil rights movement who

recognize that johnson has been so supportive in terms of civil rights. why are you, dr. king, challenging this administration? it has been so supportive of us. king says he feels a moral imperative to say that this is part of an injustice that is being perpetrated by america. america is on the wrong side of world history in pursuing the war effort. you have half a million americans at war, record numbers of debt. he is out there speaking against it. a year before he is assassinated, he is at the riverside church in new york making a speech that gets a lot of attention. shortly before he is assassinated, he is at the national cathedral in washington, d.c., speaking against the war. it becomes part of the energy that surrounds him. it puts him in a position of being an opponent of the johnson administration. >> syracuse, new york, this is

ralph. you are on the air. >> thank you for "the contenders." i am a proud uaw worker from upstate. i have a quick comment and a quick question. i have a video at home. it is from the afl-cio. it was hubert humphrey speaking at a gathering. he was speaking at an afl-cio gathering. it was towards the end of his life and he is still smiling. he knew was almost at the end. he had a great quote at the end of this speech. "i would rather live 50 years like a tiger than a hundred years like a chicken." i want to move up to 1968. i met a guy about 20 years ago who said that he worked on the humphrey campaign in 1968. he said he came on after working on the campaign and he was at the hotel. he was looking out at this park. the news came on and said there

was a anti-war humphrey protest in the park. he called humphrey the next day and he said there is nothing we can do about it. nixon was doing it to try to link humphrey to anti-war protesters. i was wondering if you've ever heard a story like this? and thank you very much. >> people were paid to cause trouble. it is hard to document. there were stories about it. it probably happened. there is no way to know for sure. >> he was a union caller. how important was the labor movement to the civil rights movement? >> on the civil rights front, they were slow to come along. they were trying to get the labor unions in this country to

understand the importance of racial equity. and here they are now linking hands with not only randolph but also dr. king to support the march on washington. the famous picture of dr. king speaking at the march on washington. he has several others right behind him. you can see the union involvement and the head of the afl-cio with them. it becomes not just a matter of a support mechanism but a controlling mechanism for the people in the kennedy administration who wanted to be able to have some levels of control over the march and the civil rights effort. >> we are going to take a call here. and then shortly after the king assassination, robert kennedy

assassinated. let's listen to a call. >> hello. i am a fellow brother of the construction trade. i do not want to turn this into a union rally, but my first ever political involvement in politics was with hubert humphrey. i was 18 years old. i lived in an inner ring suburb of the city of brooklyn, ohio. he had came to brooklyn. he was the vice president. you could imagine what was happening in 1968 and 1969 -- and all of the 1960's for that matter. he sat down with our mayor who turned out to be a mayor for 51 years. they were both mayors. they talked things over.

i got drafted the following year. it is a pleasure, the series you are running. thank you for having it. >> hubert humphrey, the happy warrior. the name he was given throughout his career. we are live from the history museum in st. paul right by the capital. a beautiful building. if you are here, come and visit. we are using it as our backdrop to talk about the presidential campaign of 1968 -- hubert humphrey. one of his many bids for president and the one he actually got the democratic nod. he made a major contribution to american history. in june, the california primary and the next presidential figure to be gunned down was robert kennedy. >> it set him way back. that is really the beginning of

his numbers sliding. earlier in the year, in the early primary season he was ahead 10 points over every candidate. after robert kennedy was shot, it looked like the democratic party was falling apart. when he got back on his feet in july, he was already behind nixon. >> what stands out to my mind is we were talking a moment ago about the king assassination. robert kennedy gives an amazing speech that so many people still remember in indianapolis on the night of the king assassination. there was rioting all over the country. there is racial anger and unease. he talks about the king assassination in terms of his

own brother's assassination. all we can do to try to ease the pain. the patience that is required. just a few months later, here he is laying dead in los angeles. i think the sense is that america's leaders are being killed. people who are the idealists. people who are to carry on the grand traditions of liberalism, people challenging the establishment are being eliminated. there is a sadness and despair in the american body politic at the moment. it is hard to capture the extent of it. sometimes we have arguments today about polarization that people always said, if you were here in 1968 you will understand how bad things could have been. it felt like the country was coming apart. we do not know the forces of evil at work and why so many great american leaders are being killed at this moment. don't forget president johnson's approval numbers are in the low 30's.

he can't even come out at a major event. he will not be able to go to the democratic convention. it really is an incredible moment in 1968. hubert humphrey was there. you talk about the happy warrior. he wants to stand up with people and say, there is reason to hope america can do it. he is seen as an establishment figure because of his association with the incumbent lyndon johnson. >> our cities are burning, kids are rioting, leaders are being burned out. people are trying to bring america to the next stage. we're going to go to the next stage as well. we will listen to a call. our next stop will be about the opposition that's gathering with george wallace and also the republicans. listen to jim from new york. >> hello. how are you? >> we are great. what is your question?

>> let me first say how much i am enjoying the program. i appreciate it. my question really deals with the first draft lottery, which i believe was either in 1967 or 1968. i do have great recollection of being eligible for that. i had a very low number which upset everyone in my family. what was hubert humphrey's position relative to the whole concept of the lottery? what did he do in that issue? >> i do not know if i ever heard hubert humphrey say anything about the lottery. i do know later on he worked to raise the voting age because he thought it was unfair people were being drafted at 18 and could not vote until they were 21. later on his life he had

different ideas. he probably felt the draft itself was probably not such a good idea. at the time i do not know if he said anything about it. >> the summer of 1968 and the country is in disarray. the assassination of both king and kennedy. on the republican side, richard nixon who had also been in the senate and former vice president wanted to be president as well. what was his campaign's reaction to all of the turmoil? how are they positioning their man? >> the principal response from richard nixon was law and order. he wanted to restore law and order in the streets and get the counterculture -- all of the young people and their antiwar efforts and protesting on campus -- he wanted to get that under control.

he appealed to a group of the silent majority in american politics who felt they were being put upon by all of these young people, some of which you had supported mccarthy. richard nixon in this period is a guy who himself has concerns about the war. he has questions about it. he positions himself as a staunch supporter of the military and the war as a counter to some of the democrats -- democratic efforts into separate himself from the johnson forces. >> hubert humphrey still suffering from being loyal to his president. the two candidates were able to distinguish themselves. but let me just say, it is interesting if you look on the republican side, it is not only richard nixon running but you have romney.

romney was trying to position himself as anti-war. it leads us to what we will remember in george romney's presidential run, he says he has been brainwashed by the general and political leaders about what is going on in vietnam. it alienated some of the silent majority base. they wanted to see the war continued and to win the war. romney thought that he could outflank nixon by be in the anti-war republican. turned out he hurt himself with his base and he was never able to challenge richard nixon after that. then you have people like rockefeller in that mix. guess who, ronald reagan is in that mix. ronald reagan is the strongest conservative as opposed to richard nixon at the miami convention.

it ultimately, it comes down to reagan and rockefeller knocking each other out and allowing richard nixon to have a clear path to the nomination. >> let's take a call from fred. >> hello. i wanted to mention one of my stories about hubert humphrey when he was the mayor of minneapolis. the mayor's office overlooked the bell telephone companies across the street. he saw them taking in food. taking in food to prepare for a long strike. they had already emptied the building and all of that stuff. the strike. hubert humphrey was always a great friend of the working people. that is my comment.

>> thank you for telling the story. let's move right on to another call from nancy in virginia. >> i was 14 years old in 1968. i was visiting in washington. my older cousin was a hubert humphrey supporter. i was always proud of that. i wanted to add since i heard on msnbc earlier that the occupy movement is coming to d.c. in december. i was wondering what your guests could offer in recognizing provocateurs. i know that dr. king was for non-violence in knoxville, tennessee. all of the 99%ers i approve of is nonviolent. thank you.

>> he studied at the highlander school as did rosa parks and others involved with the civil rights movement. initially, it is there to help people with union activities fighting against coal miners and teach them how to organize. those tactics expanded to civil rights protest and the like, obviously in the case that dr. king and rosa parks become so well known for. extending that to the lessons she would take to something like occupy, remember when king is assassinated, he was attending to lead a poor people's campaign. the poor people's campaign was going to be on the national mall right in front of the u.s. congress and the capital and the ideas dr. king expressed was he wanted to share the leaders of the free world that there was still poverty including in

appalachia. also in the big cities. he was going to build shanty huts right there on the mall. talk about an occupy movement. there was a fear that this was going to attract all kinds of anarchist elements. that is what we're seeing in occupy. >> we have a clip from a little bit later during the general election. talks about the fact there was no debates during the general election. a lot of discussion was of whether there would be. here is richard nixon talking about not debating. >> i happen to be of the opinion we need a debate in this country. i think you and hubert humphrey -- >> i think mr. hubert humphrey as having a great time debating himself. >> you are prejudiced, mr. nixon. if you do not want to debate with the third-party candidate

whose name shall not be mentioned, why don't you get your friends in the house of representatives to pass a special law permitting you and mr. hubert humphrey to debate. >> have you ever looked at the membership on that committee? it is always amusing to be when people said, why don't i get the republicans to do something of a debate. let's remember that the senate is 2-1 democratic. the house is 3-2 democratic. anytime that hubert humphrey with his influence on his side wants a debate, i would think he would be able to get the democrats to pass it. i think that my power in terms of what i can get the republican members in the house to do is greatly overestimated. that is the problem as you know it. they are not opposing the debate. they are sitting with wallace getting 21% of the poll -- i am sorry.

i should not have mentioned his name. with wallace getting 21% of the poll, they are insisting that they cannot go back to their constituents and laws that provide him an equal chance. >> if you got your friends and mr. humphrey got his friends, you would have enough friends to bring this thing on. >> i do not think he has that many friends. [laughter] >> richard nixon talking about the 1968 campaign. the focus of our discussion is hubert humphrey, democratic candidates for president unsuccessful in 1968. we will take a call from jim. >> great show. hello. >> we can hear you. go ahead. >> i have a purely speculative question i want to ask to mick dealing with the power of celebrities in 1968 that

supported mainly kennedy and mccarthy and after the announcements of a bombing halt possibilities, many of them came flocking back to humphrey. many participated in an election telethon. many of these stars were there like frank sinatra, paul newman, sonny and cher. there was a poll taken the next day on election day saying humphrey would win. my question is do you think that if these stars and this telethon taking questions on air, that humphrey might have pulled it off if they would have come to him earlier in the fall in 1968?

>> it probably would have helped if he had come earlier in the year and joined the humphrey campaign. nothing else was going on at that time besides the telephone. they thought they had peace in vietnam the weekend before his poll ratings just kept going up. he almost passed nixon in most polls because peace in vietnam would have won him the presidency. richard nixon convinced the south vietnam's leader to not come to the peace talks because richard nixon would give him a better deal with president. this is documented all over the place. he backed out of peace talks. many people think that is what lost the election at the end. >> right behind you is a campaign poster for george wallace. when did he come into the race and what block did he represent? >> he represents southerners who were alienated not only by

hubert humphrey but by the student protesters. he is representing working-class people even in the northern cities who i think are frustrated with the entire climate. they think there is a lack of law and order. they think the minorities and the blacks are out of control. they think nobody is listening to them. this is the archie bunker element. that is who wallace comes to represent. a lot of people would have been democrats -- they argue in people or seven as per ed they -- they are union people or southerners, but they are not in line with what has become of the democratic party in terms of

mccarthy, they're just not there. wallace formed to their feelings. >> in the interest of time we have to fast forward to the story. the republicans meet in 1968. democrats convene at the outset of chicago. the party had series fractions about the war. chicago was what kind of scene? >> where do you begin with chicago? humphrey tried to get the entire convention moved to miami because he knew it was coming. johnson would not do it because he was so close with daley and he promised daley there would be a convention there. there were all kinds of strikes. there were baracades up. they expected 15,000 protesters. it was chaos. he was worried about threats to his family. there have been threats to kidnap his wife. he arrived at the convention without a peace plank. johnson squashed it right at the end.

he ended up coming to the convention. >> did he have the nomination in hand when he got there? >> people were nominated in different ways. it was not by primaries, it was by the delegates. he had the most delegates by way of lyndon johnson. he had some sway with the delegates that would nominate him for president. >> that is a critical moment in terms of political history. humphrey is the last nominee who gets the nomination not through the primary process. you get people but the other big city leaders and union leaders to get behind humphrey almost out of anger at the counterculture movement and the anti-war movement. daley is not only beating up on protesters in the street, he is beating up on media inside the convention. it is a horrible scene.

in terms of the american public that is watching this, a huge turn off. >> richard daley was determined to have law and order. >> the police were there and the national guard are all on the streets. they are whipping heads. it is a really horrible scene. humphry is put in a position of saying he stands with the bosses against people who are breaking down law and order civilization. the anarchist in the streets and the drugs that are being featured and the free sex. he is trying to appeal to the silent majority in saying he stands for law and order. democrats are not an out of control party. it is ironic. hubert humphrey is a guy who was not a great supporter of the war. he was an idealist. in this moment he becomes a representative of the big city mayor union boss, lbj bullying

hardball politics. >> mike is watching us from honolulu. >> i really enjoy your program. i am 69 years old now and i remember in 1961 i was in high school. i worked for kennedy. he was running against hubert humphrey. humphrey had a little campaign slogan or a campaign jingle to the tune of "give me that old- time religion." i remember that. of course, we go back to 1968 and i was married it then. i voted for hubert humphrey. my question for the author is this.

was there this animosity between the humphrey camp and the kennedy camp because of his anti-catholic campaign in 1960? thank you. >> i assume he means was it still there in 1968. i do not think so. i think it was gone at that point. the things that john kennedy did to hubert humphrey in the 1960 campaign paled in comparison. he basically bought that election in west virginia. >> we have a clip we did not show from 1960. i am going to take a call. we have jfk talking about hubert humphrey from 1960 to help show some of the relationship. let's get to john in tennessee. >> hubert humphrey and mccarthy were close friends for many years as fellow dfl'ers.

mccarthy told humphrey he would come out and support him soon. i think the assumption was something like september. mccarthy never did. that was a terrible burden for humphrey. probably mccarthy could have swung enough votes to get humphrey elected. i am just wondering whether our experts share that view or whether they have some other view. >> thank you. >> we interviewed walter mondale and he said if mccarthy would have come out on the stage at the convention and said humphrey is not our best candidate and we are against the war. if we need to vote for him instead of richard nixon, they would have won the election. they had a couple weeks before the convention where is that he

would come out for him by mid september. he never did. they were talking constantlyall throughout the campaign trying to get mccarthy to come on board with humphrey. he would not do it. he left the country for a while. nobody knows why. >> if you have joined us along the way, mick caouette has done a documentary. we will show you the cover along the way. many clips we are showing are from his research. this is from 1960 talking about his relationship with hubert humphrey and his influence on his presidential campaign. >> this week i had the opportunity to debate with mr. richard nixon. i feel i should reveal that i have a great advantage in that debate. i am not referring to anyone's makeup man. [applause]

the advantage i had was mr. nixon had just debated with krushchev. i debated with hubert humphrey and that gave me an edge. >> debating with hubert humphrey gave him an edge. greg, you are on. welcome to the conversation. hello? >> hello. i was just -- this kind of relates to what you were talking about earlier. humphrey and lbj's relationship, why would he have to attack his own over vietnam? >> why did lbj attack hubert

humphrey? because lbj wanted to win the war and he did not want anyone telling him -- getting off of it. he wanted people to do what he told them to do. humphrey had reservations about the war and he knew it. he had been a free spirit his whole career and suddenly he was in a situation where he had to be controlled. johnson really cost and some damage. >> i think basically he was protecting his own legacy. >> we are going to close out our conversation with a clip of the 1968 national guardsmen who were students themselves in the street holding back a student protesters. this is hubert humphrey in a clip from the convention as he accepts the nomination.

>> where there is hatred, let me show love. where there is injury, pardon. where there is doubt, faiths. where there is despair, hope. where there is darkness, light. those are the words of a saint. may those of us with less purity listen to them well and may america tonight resolve that never, never again shall we see what we have seen. [applause]

>> i was heartbroken. all at once there was this total disarray. what do i do under these circumstances? >> that was a clip directly from the documentary about hubert humphrey reflecting on the terrible turmoil at the 1968 convention. we have about 35 minutes left. we are going to move along to the next part of the exhibit and it takes some seats and round out our discussion of the life and career, continue taking telephone calls. as we do, we will show you some of the humphrey commercials of the 1968 presidential campaign. we'll see you in a couple of minutes. [no audio]

>> democrats have paved the way for them to get good summer jobs. you have more money today for little luxuries because democrats worked hard to push into a higher minimum wage. you do not have to worry about supporting your mother today and she does not worry about being a burden on you thanks to social security and medicare. quite an accomplishment -- you know it, and you only heard one minute's worth. what have the democrats ever done for you and yours? think about it. >> paid for by citizens for humphrey-muskie. >> the vice-president of the united states. >> we have seen the terrible results of violence for this country. it would be intolerable if a handful of violent people -- and that is what it is, just a handful -- could harden us to

needed change. i have seen a violence that perverts the spirit of the america. i saw it at the republican convention in 1964 when governor rockefeller were shouted down. i saw it in minneapolis when a man i disagree with, wallace, was heckled into silence. it happened to me in philadelphia. we should give notice to this violent few. there are americans that are willing to sacrifice for change but they want to do it without being threatened and want to do it peacefully. they are the nonviolent majority. black and white who are for change without violence. these are the people whose voice i want to be. >> the preceding was a pre- recorded political announcement paid for by citizens for humphrey. >> mr. richard nixon, where do you stand on federal aid education? where do you stand on expanded medicare? where do you stand on aid to higher education? mr. nixon, where do you stand on the program?

where do you stand? i must say -- >> you know something, richard nixon has not won an election on his own in 18 years. let's keep a good thing going. >> those were campaign commercials for the 1968 campaign as we talk about hubert h. humphrey, our featured contender in our series on 14 men who lost the election but changed history. we are live from the minnesota history center. this is a special exhibit they are doing in 1968 which i am told will travel to other cities. >> chicago for sure, and i believe atlanta or charlotte as well. >> chicago is certainly appropriate as we talk about this. >> it is time to talk about the fall campaign. juan williams on my left and

mick caouette on my right. both have written a number of books about the civil rights era. in the fall campaign, we have wallace, nixon, and hubert humphrey all fighting for the white house. we had riots in the spring, did they continue? >> there was some rioting that persisted. it was not of the major kind of smoke in the sky variety that we saw earlier in the year. the racial tension was palpable throughout the country. it is interesting the way that nixon presented himself was as someone who was going to restore order in the big cities. this also had a strong appeal to people who felt this civil rights movement had sowed chaos. it is way beyond a just a matter of the quality. it is creating instability in the country. combined with the anti-vietnam

war sentiment, you get richard nixon as the guy who is a man of stability, law, and order. a man who said, we can win in the vietnam even though we will know he goes on to be somebody to start the pullout from vietnam. he understands he is appealing to the silent majority and that is what his campaign is it out. >> hubert humphrey comes out on vietnam still tied to lyndon johnson's policy? >> probably worse. lyndon johnson has funding he is holding onto. the democratic national committee has no money. he has no money. he has to borrow money to start his campaign. no tv ads. the promotion whatsoever. he is 20 points down in the polls. that is how he starts his campaign. >> how does it play out? >> it runs into -- it continues like that until the end of

september. he is booed offstage in seattle by protesters. it continues and nothing changes. then he gives a speech in late september on september 30 in salt lake city where he has little left to lose at that point. he makes a break with johnson in a real subtle way where he call for a bombing halt and to bring the troops home. things change instantly. he gets something like $1 million in cash come into him. people saw it as a chance. the next place he went, it is humphrey ,we are for you. >> here is a scene from those months. a popular refrain he met from protesters -- dump the hump. >> i proceeded to go out the main door walking with students and protesters on each side of the sidewalk pushing and shoving and cursing.

there were throwing everything they could it to harass me. one of the things that were doing is throwing urine, cans of urine at me and my party, and other things. it was a terrible ordeal. i walked every step. i did no running. i got to my car. i waved back at the students and we started to drive away. [chanting] >> i believe that -- >> dump the hump! dump the hump! >> the republican candidate owes it to the people to come out of the shadows. >> dump the hump! dump the hump! dump the hump! dump the hump!

[unintelligible] >> what you heard and saw was hubert humphrey reminiscing about a visit to stanford university and scenes from events in boston and seattle. this is shirley from dallas. >> i first heard of you for -- hubert humphrey when i was in my 20's. he was the mayor of minneapolis. he was on a program called "town meeting of the air." he made a speech in favor of civil rights and similar to what he did in 1948. since then he was always my political hero.

i would like to ask a question. was he not active in the anti- nuclear weapons toward the end of his career? i would like to hear more about that. >> earlier in his career, he was actually the force behind the disarmament agency and the test ban treaty. he could not get in the middle of the 1950's -- he could not get the senate and congress because of the cold war to talk about disarmament and talk about negotiating with russians.

>> at one point, lemay suggested using nuclear weapons in vietnam. people were alarmed and had not forgotten what happened with the a-bomb and all the rest. it is an example of how extreme and harsh that was. it was about war and immense social change taking place. we talked about the idea of assassination. there was also a feminist movement. the campuses were on fire. there was great discontent about the draft. this time shaped so much of all politics. subsequently, we will see the change out of the democratic

primary process. it is no longer the case that the mayors and the union bosses are dictating everything. you will see the need for the democratic party to come back together and it did not for awhile. the south becomes increasingly republican. >> hubert humphrey chose muskie. >> he had known him for quite awhile. he wanted someone who he thought would be a good president if something happened to him. assassinations were afresh. they knew the vice president was a heartbeat away. he wanted someone that would be like and stable. i should say that he also spoke to nelson rockefeller about crossing party lines.

that would have been pretty remarkable. rockefeller could not do. they were friends. >> the next call is from virginia. you are on the air. >> i was intrigued about the comment earlier that humphrey was the originator of the idea for the peace corps and a lot of other ideas for kennedy. i wonder if kennedy ever give him credit for those ideas and what some of the other ideas of his were. >> he gave him credit for the test ban treaty. he gave him credit for the food for priests -- peace program. i do not know if he ever said it about the peace corps.

he might have said that these were ideas that helped him. when humphrey lost the primary to jfk, he said he wanted to get his ideas into the administration. he worked on them. in 1968 he was 57 years old. how did he present himself as a candidate? we have all of this change going on in society. was he conventional? >> extremely conventional. we talk a little bit about the difficulty he had portraying himself as an opponent of the war. he was born in 1911. he is not a counterculture and die. -- guy. there is no way he will be standing around in a dashiki or with long hair and be credible. he is trying to say that he understands the need for stability and law and order even though he is not a law-and- order candidate.

he is in a suit and tie and he has difficulty even with the kind of poetics that robert kennedy had employed when king was assassinated. that is not hubert humphrey. hubert humphrey is a great speaker. but how you speak -- you have people screaming at you and they see you as an operator for lyndon johnson who is unpopular. he is in a political vice. >> it is impossible for him to present himself as anything. it was done for him. he did not have much of a chance to beat himself. interestingly enough, he was the revolutionary in 1948. he was in the other role in 1948 and he became part of the establishment he attacked in 1948. >> a lot of change from 1948 to 1968. next telephone call. >> hello. i worked for hubert humphrey.

my husband in the 1960's was his press secretary. i worked for muriel humphrey. i was her press secretary. >> oh, my goodness. >> we were involved in his 1960 campaign. we were with him for all of 1968. we were at the democratic convention and the horror and tragedy of what was unfolding. i have the experience of escorting muriel humphrey and their children through the basement of the convention center with tear-gas seeping all around us as we were going into the convention hall on the evening that he would get the democratic nomination. on that night from the hotel

room at the conrad hilton, we were with him as he stood there looking out the window at the violence and the terrible tragedy unfolding in grant park. the atmosphere in the room was almost of a funeral. humphrey was the saddest man you could ever imagine on the night that he had achieved his greatest political victory to be the democratic presidential candidate. this was a man whose ideals and integrity carried through his whole life and in his personal life when you knew him at home or with him privately he was the same person with the same

passion. the same conviction for civil rights, for working americans, for the concerns of world peace that you heard in his public statements. i do not think we have had somebody with his gift in the years since. >> pat, our time is short. are we doing your boss justice tonight? is there one aspect of his political career you think it is important for our viewers to hear about? >> i think you are doing a beautiful job on him. you have touched on so many things. i was happy that he was being given some credit for the tremendous array of ideas and programs that he actually generated and then championed during the kennedy

administration. >> thank you for your call. what is your family name? >> my last name is griffith. >> my husband wrote a biography of hubert humphrey in 1963 called "humphrey -- a candid biography." >> thank you so much for being a part of our program. we have just 15 minutes left. we still have the long life of hubert humphrey to cover. let's talk about election night. where did he watched the returns? >> i think he was in the hotel in minneapolis. >> what were the results like? >> they really thought they had a chance at the end. illinois, ohio, and a couple of other states came in at the very end. they were very close. and they were ahead for a while. he basically went to bed

thinking he probably was not going to win and what he woke up found out he did not. >> it was very close. ohio, illinois, and california which all voted richard nixon. they do not go to nixon by a lot. it is very, very close. i think it is just a of a percentage point difference in terms of absolute percentage of votes in the national election. >> a close popular vote. the electoral college vote, 301 for richard nixon, 191 for humphrey. george wallace got 46 electoral votes. who did george wallace take votes away from? >> that is a good argument. i think if you think about the fact that the south was still mostly democratic and they are reacting to civil-rights efforts, i think those would have been available for a democrat who was operating at the behest of the democratic machine. the union bosses, the mayors, the wealthy in the country. that was gone. the had fallen apart.

they were trying to pull together for a country as part of lbj's machine. lbj was not actively supporting. he did not let the money go. he did not make the effort to try to give those people a reason to vote for humphrey. if i look back on it, i take it those were democratic votes. we've not talked about african americans were coming into the process. what happened if king lives? does king get more involved at this point? as king say that he is for humphrey? he might have. would king possibly launch a third-party effort? i do not know. that would have changed the dynamic markedly. >> what was the african-american turn out like in 1968? >> it was pretty good. i do not know the exact numbers. this was right in the aftermath. you get the voting rights act in 1965 and the civil rights act

of 1964. much more in the north and west. in the south, there is still intimidation going on. but blacks are turning out in numbers. >> i would say the block of states or southern states, alabama, mississippi, georgia. if you look at it a different way, if they had a choice of only nixon or humphrey, they might have gone to nixon. it is hard to know where those votes really came from. >> wallace also took louisiana, arkansas, mississippi, and georgia. let's take a call. hi, jim. >> i would like to mention that in 1968 when johnson made his speech and he stepped down that two days before on friday, march 29 -- which i have to correct your guest on the date.

on march 29, mr. humphrey agreed to speak at a school. the speech was scheduled for three weeks later. on sunday, march 31 is when johnson made his speech. i always wondered since that event whether he had a clue on that friday because he scheduled some other speeches later in april on the same date that johnson was going to step down or he was simply anticipating that the possibility may exist. because of that speech, i was able to sit in the front row of his announcement speech on april 27 at the hotel along with the other students that helped invite him. i was also at the capitol the day the civil rights act was

passed in 1964. i feel like i will always have somewhat of a privilege from a front-row seat in parts of his life. finally, i would like to make a comment that most of the progress of legislation and programs that evolved during the 1950's, 1960's, and 1970's were a result of hubert humphrey's forward agenda. it seemed at that point when he ran for president in 1968, those who he supported with legislation turned on him and he suddenly became outdated or a little bit too conservative in their eyes. the progressives for civil

rights did not view him as a strong advocate, anti-war party did not consider him a strong advocate. >> ok, jim. we are going to jump in because i think our guests made that exact point earlier. he was a great influence but when it came time for his campaign -- >> he had his signature or hands on over 1000 bills for 10 years. the problem 1968 was there was only one issue and all of the rest were forgotten. it was only vietnam. all of that was lost unfortunately. >> richard nixon won. the war waged on for a couple other years. what about humphrey's life after this? >> nixon did not say he was going to end the war. he said he was going to win the war. >> that plan that he had. >> the secret plan. >> he had a secret plan. that was the effort to appeal

to the silent majority. the problem for humphrey again, we talk about how he is trapped in being lbj's vice-president and lbj is feeling he needs to win this war. he is also trapped with the larger argument with nixon were he wants to say, i am for stability. i am not for things going out of control. this is at the same time nixon really says he is a law-and- order candidate. humphrey can never be that because nixon has the space occupied. even as humphrey is trying, he is alienating people who would be his supporters. >> i will take a call. this is gavin from new york. >> hello. you touched upon this earlier. if george wallace had been out of the 1968 presidential race, would you have seen the outcome being even closer than it was?

in all of your opinions, who would it have been closer for? would it have been humphrey on the top where would it have put more ahead? thank you. >> do you have any more to say on that? >> i do not know why, but from my perspective, i think wallace beat humphrey. i think a lot of working-class union folks who had some allegiances to the democratic party going back to fdr, i think they peeled off. they went with wallace. i do not know if they would have done to the republican party and to nixon. >> we see that in the north. i think the south -- if wallace was not in the race in the south, nixon might have gotten those votes. >> did hubert humphrey give up his aspirations after his defeat in 1968? >> he came close to trying in 1972 but then he backed out to mcgovern.

he decided not to do it. he began to be ill at that point. >> but he did go back to the senate? >> in 1970 he took mccarthy's seat in the senate. his popularity had dropped and he left politics and humphry took it. it was one of the largest landslides of his senatorial career. he served there until 1978 until he died. >> how was his second stand? -- stint. >> he was at the bottom. he was a freshman. he had no committees. walter mondale was the senior senator and he was treated like somebody who was just starting. he was given no respect. he found his own way and with a short time he was working on bills again and he passed a couple of different bills during that time. he got back into it. >> let's take a call from michigan. hello, amy. what is your question? >> my question is since senator humphrey served during the

mccarthy era, what was his relationship with joe mccarthy? did mccarthy go after him because he was a liberal? >> that is a complicated question. he tried to pass something called the communist control act where he tried to make it illegal to be communist. that was done in some part because he was trying to make joe mccarthy -- to bring the truth out and force his hand so he would have to prove somebody was a communist and would be illegal. he could not be quite so passe about it or blase about how he attacked people. he would have to incriminate them. that was a bad plan. it did not work. he did not like joe mccarthy or any of his tactics. even though it was anti- communists. he did not like anything about what he did.

>> we just have two minutes left. he was very ill toward the end with cancer. what kind of cancer did he have? >> bladder cancer. >> he ended up dying in january of 1978. the time before he died, he was brought back to the capital for what seemed to be an unusual tribute. >> it never happened before. >> tell us about that. >> it was the first time the congress and the senate met for one senator. never happened before. they all met -- it was just to honor his work. he died two months later. his spirit was still there and republicans and democrats both spoke. >> he invited richard nixon to come back for his funeral in the capitol building. >> he called nixon at christmas and said you need to come back. i do not think any president should be not allowed in the city. i want you to come back. he said i do not think i can do it. he said you need to come to my

funeral. it is a dying wish. he showed up at the funeral. >> as we close i will ask both of you to bring us full arc. the premise of the series is people who are unsuccessful in the presidential bid but changed american history. how did he change american history? >> his speech at the 1948 convention changed history. if you think about social movement in the 20th century, it is the civil-rights movement. hubert humphrey was at the top of that order in terms of people who held elective office to put themselves out as advocates on the right side of history. he was well ahead of the curve in terms of pushing the democratic party, pushing politics in the direction of the passage of the civil-rights act and so much we have seen in this country when it comes to race relations.

when you think about barack obama as president today, that does not happen without some of the changes that come from the democratic party. again, here is hubert humphrey. he is the last selection by the party bosses and machines. in the aftermath of hubert humphrey's defeat in 1968, suddenly you have an allocation of delegates based on primaries and process. that is part of the hubert humphrey's legacy. then there are the social programs. we think about the end of the new deal. you have a whole new range of efforts on the social justice scene. social programs -- the work of hubert humphrey's mind. >> i apologize to you but we have run out of time. what i will do is encourage

people to find your documentary. he makes the case about how hubert humphrey changed history. here is what it looks like. "humbert humphrey -- the art of the possible." it is widely available. he was buried back here in minneapolis. his tombstone has this inscription on it -- i have enjoyed my life. disappointments outweighed by pleasures. i have loved my country in a way that some people consider sentimental and out of style. i still do and i remain an optimist with joy, without apology about this country and about the american experiment in democracy. that is hubert humphrey's gravestone. as we close on this "contenders" series, we will show you a bit of video from that very unusual session in the house of representatives chamber. some real familiar faces. when hubert humphrey just months before his death was invited back for a tribute and a celebration of his long political and legislative

career. thank you for being with us. [applause] >> we ask you here so we could tell you, we love you. [applause] >> mr. speaker, knowing full well the dangers of what i am about to do, i yield as much time as he may consume to the senior senator from minnesota. [laughter] [applause] >> i know where i am standing. i am standing where the president of the united states gives his state of the union address. my goodness. how i have longed for that opportunity.

[laughter] [applause] [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> "the contenders" features key people who have run for president and lost. next friday, we will be in montgomery to talk to historians and take your calls about the campaign of george wallace. the series airs live on friday nights through december 9 on c- span. for more information on our series come and go to our website. that is all at c-

span.org/thecontenders. >> on wednesday, executives said bonuses were necessary to attract and retain experienced people. the oversight committee was joined by the regulator who approved the bonuses for last year. this is three hours. >> americans have the right to know that the money is well spent. and deserts and efficient government that works for them. our duty is to protect these rights. our solemn responsibility is to

hold government accountable to taxpayers. taxpayers the right to know what they get from the government. we will work tirelessly in partnership with watchdogs to deliver the facts to american people and bring genuine reform to the federal bureaucracy. this is our mission statement. go ahead and roll the president. >> i see reports of massive and obscene bonuses. and did not run for office -- i did not run for office to be helping out fat cat bankers on wall street.

they are relying on bailouts or companies are doing badly, it offends our fundamental values. the only ones that should be paid out bonuses are those who have paid back the tarp money. if they are in shape to pay bonuses, they are surely in good enough shape to pay back every penny to taxpayers. >> i now recognize myself for an opening statement. in march of 2009, reports revealed that after receiving $170 billion of taxpayer-funded bailout, aig executives awarded $121 million in bonuses to talk -- top executives. president obama calls this obscene and shameful. he believes taxpayers should be paid back in full before millions of dollars in bonuses were paid out. freddie and family have become

day facto arms of the government. they have received $169 billion from the treasury department. they still owe approximately $141 billion. despite the outstanding balance, the top executives received $35 million in compensation. of that, 12 $0.70 9 billion were awarded to their executives. they've even gone as far as to pay someone $8.10 0.7 million signing bonus. we understand that could partially -- they have even gone as far as to pay someone a $1.7 million dollar bonus. the signing bonus was given with no correlation to performance. it was simply a recruiting tool financed by the american taxpayers. this bonus -- these bonuses have

come just as freddie mac and fannie mae have asked for a thetional money from taxpayers. they reported a third quarter loss of more than $10 billion. we all understand we're not paying bonuses for profits. bonuses under current law must be tied to performance. our committee has asked for and received scant documents about the performance required. none of the documents received would have qualified when i was on the board of a public company for due diligence by the compensation committee. they can be met simply because you were there.

that does not pass the sniff test. we're here to ask simple questions on behalf of the american taxpayers. who is footing the bill? do you agree with what president obama said? the bonuses should not be paid out to anyone until the american people have been paid back in full. do you believe in the concept of pay for performance? do you believe your performance warrants this type of bonus? should you profit while the taxpayers are paying the bill? are there any measurable standards to even evaluate the performance with in the documents we have received? do you have other documents we have been denied pursuant to our requests? are you any closer to unwinding freddie mac and fannie mae then years ago?

are these payouts -- i will not read the rest of that. are they payouts for other reasons? whose agenda are they on? is it a political agenda it that you are using taxpayer dollars to achieve? this committee believes the 2008 law requires you to minimize losses to taxpayers. business as usual of simply taking more money from the taxpayers and causing an agenda of getting more people into homes they cannot afford has not been authorized by congress. i now recognize the operanking member for his opening statement. >> thank you for calling today's hearing. thank you for agreeing to my

request. mr. demarco and i have been engaged in high-level meetings over the past several months. some of these have been heeded. others have been very constructive. i appreciate his willingness to appear today. i look forward to our continuing discussions. executive compensation is a worthwhile topic for this committee to address. we should examine the compensation of executives at fannie mae and freddie mac and also on wall street for those who put their interests ahead of those of the taxpayers and public. in reviewing the compensation packages of executives, we will have a tough questions for our witnesses about how they can claim credit and receive bonuses for achieving performance goals that they had

nothing to do with. we will examine why the faa -- fha and freddie mac and fannie mae have done so long to assist homeowners. congress passed emergency stabilization act. the president signed it in october. it states clearly that they shall implement a plan that seeks to maximize assistance to homeowners. the chairman and i do not agree on much, but we do agree the efforts to assist homeowners have been woefully inadequate. the modification program was supposed to help 4 million homeowners modify their loans. today, it has helped. the 800,000.

the refinancing program was supposed to help up to 5 million borrowers refinance at lower rates. . than 900,000 have refinanced to date. -- fewer than 900,000 refinance today. the chairman and other republicans believe we should stop assisting home owners, abandon efforts to address the housing crisis, and allow millions of additional foreclosures so that we can hit bottom. i come from a fundamentally different place. i believe we must redouble our efforts. we need to buckle down and to the harbor necessary to develop solutions that will address the crisis effectively. it is too easy to throw up our hands and blame the entire crisis on individual homeowners who took out loans the could not afford. those individuals are certainly

out there. but there are many more who did nothing wrong. they pay their mortgages every month. now they are under water through no fault of their own. they owe more on their houses and their worth. they cannot sell their homes and moved to in the city for a new job. they are in limbo along with our entire economy. the foreclosure crisis does not only affect individuals. it reduces the value of homes for entire neighborhoods. it lowers tax revenues resulting in a loss of more jobs. it degrades multiple levels of commerce across the country. it affects everyone of us whether we want to limit it or not. addressing the housing crisis is key to our economic recovery as a nation. the chief economist at moody's agrees. he has stated that housing is

ground zero for the economy's problems, high unemployment, and loss of jobs. ben bernanke recently testified that it will be almost impossible to resolve our economic situation when people are losing their homes at the rates there was in them. let me conclude by returning to the subject of today's hearing. in 2008, congress and the president passed a law directing fha and freddie mac and fannie mae to maximize assistance to homeowners. this has not happened. we're mired in a culture of mediocrity. nobody should be receiving million-dollar bonuses. i yield back. >> all members will have five days to include opening statements and additional remarks. we now recognize our first panel of witnesses.

mr. michael williams is president and chief executive officer of fannie mae. we also have the chief executive officer of freddie mac. mr. edward demarco is the acting director of the federal housing and finance agency. pursuant to the rules of the committee, i will ask you all to rise and take the oath. please raise your right hands. do you solemnly swear and affirm that the testimony you are about to give will be the truth and nothing but the truth? let the record indicate all witnesses have answered in the affirmative. please be seated. i will not have the heaviest gavel today, but i will tell you when the yellow light comes on, try to summarize. i recognize mr. williams for

five minutes. >> i appreciate the opportunity to speak with you today. >> the closer you have the microphone, the better. >> i appreciate the opportunity to speak with you today about the important work that fannie mae is undertaking and the compensation program put in place for the executive team. fannie mae has a dedicated team of talented professionals working to carry out the critical work of the company in the housing finance market. we have immense responsibilities. the complexity of the challenges we confront each day requires experience and expertise and seasoned leaders. the executive management team in place today is different from the team that ran the company prior. we're working to fix the company and achieve the goals of conservatorship. our employees are committed to the mission of providing funding

to the market, help struggling homeowners, and reduced losses on loans originated prior to 2009. fannie mae is the largest source of funding for the u.s. housing market. since january of 2009, with the support of the federal government, the company has provided more than $2 trillion in funding to the market. the funding has enabled nearly 6 million households to refinance into safer, lower-cost mortgages. with help approximately 1.7 million homeowners purchase a home. we have provided financing for nearly 1 million units of quality rental housing. fannie mae is also acquiring new loans with conservative underwriting standards to promote sustainable homeownership. the mortgages purchased are guaranteed since 2009. the strong credit quality and are performing well. the new loans account for almost 50% of the loans owned or guaranteed by fannie mae.

these will be a valuable asset that we expect reduce taxpayer losses. our employees were to mitigate losses -- work to mitigate losses through 2009. this is affected by continued weakness in the markets. they remain under pressure from high levels of unemployment and prolonged decline in home prices. for distressed homeowners, the home retention solutions keep families in their homes. we expect this will reduce credit losses over the long term. since 2009, fannie mae has helped approximately 1 million homes rumors -- homeowners avoid foreclosure. unfortunately, foreclosures are not always avoidable. when foreclosure is the only option, we help to stabilize communities by properly maintaining and improving properties we acquire. we sell them to new owners

giving preference to families who live in them. our employees believe in our mission. we are proud of the work we're doing to serve the housing market. there is great uncertainty for the company and its employees. we know there will be reforms. we do not know when or what form it will take. this uncertainty makes it very difficult to attract and retain employees with highly specialized skills and experience. this is particularly true as other financial institutions can offer a long-term career opportunities and in many cases, substantially more compensation. attrition at our company this year is already double our historical experience. if we are to continue to provide the stability of the system needs and protect the taxpayers' investment in our company, we must retain and recruit qualified executives and

employees. as ceo, i am responsible for ensuring we effectively manage the resources we have received. to accomplish this, we employ talented professionals. these employees effectively manage 18 million loans. in 2009, ffha work with our board and the treasury department to develop a compensation program for the company. compensation has been substantially reduced from pre- conservatorship levels. total compensation for executive management is down 50% or more. we have reduced our senior managers at the company by 30%. i am proud of our team and of their dedication to our important work serving the nation's housing market. our ability to attract and retain top talent remains a critical priority as we continue to strengthen our business and deliver value for the taxpayers. thank you.

i look forward to your questions. >> thank you for inviting me to appear today. i am the ceo of freddie mac. i joined freddie mac in august of 2009, almost a year after the company was placed into conservatorship by the federal housing finance agency. i welcome the opportunity to be here today to address your questions and concerns about compensation for our executive team. let me begin by saying that i understand why the hearing is necessary. i understand why the american people are outraged about executive compensation in general. i understand totally why congress and the american people are outraged about

executive compensation at companies that have received federal support, including fannie mae and freddie mac. we have 9% unemployment in our country. there are millions of families at risk of losing their homes. i understand the outrage. how to reconcile the compensation system at freddie mac given the suffering so many families are living with? let me see if i could explain the dilemma i face. my number one objective since taking the job in the summer of 2009 was to keep the company functioning. i concluded there would be more families hurt and pain would last longer if there was a breakdown at freddie mac. my focus was on keeping the

machinery functioning well in order to do two things. first, provide liquidity to the housing market. second, help to implement programs that would keep more of our struggling families in their homes. with this guiding philosophy, it seemed that gradual change would be preferable to radical change in the operations of the company. here is the strategy we followed with regard to compensation and overall corporate expenses. we eliminated some senior executive positions. we no longer have a chief operating officer. that was the second-highest paid position in our company. we consolidated some senior executive positions. this allowed us to reduce the number of senior executives. we consolidated the credit and

enterprise risk functions at the company. when a senior executive leaves the company, we try hard to bring in a news executive at a lower compensation than their predecessors. as a result, the 15 highest-paid people at our company today receive about the same compensation as the top 15 received a decade ago. another way to look at the reduction is from peak levels. compensation for the executive team is down 40% from peak levels. -conservatorship. -- pre-conservatorship. with sought -- we have put a big emphasis on bringing down overall expenses at our company.

our overall general and administrative spending in the past year is down more than $120 million as compared to our spending levels of 2009. let me summarize. i understand the reason for this hearing. i understand the outrage. we have significantly reduced executive compensation and overall spending at freddie mac. we have tried to do it in a way that does not risk disrupting the functioning of the company. my belief is that disrupted the functioning of the company would put those families suffering at even greater risk of deeper and more prolonged difficulty. thank you for the opportunity to testify. i look forward to addressing your questions. thank you. >> mr. demarco.

>> i am pleased to be here today to discuss oversight of the executive compensation structure for fannie mae and freddie mac or "the enterprises" as i will refer to them. my written statement refers to how they support the statutory mandates of the enterprises in conservatorship. how it was developed and is structured. i would like to focus on two matters. first, fannie mae and freddie mac have been in conservatorship for more than three years. draws from the treasury exceed $180 billion, reflecting losses from mortgages originated during the years leading up to conservatorship. minimizing those losses as much as possible while maximizing assistance to homeowners is a key purpose of fhfa and the

enterprises. they have completed more than $ 1.9 million foreclosure prevention actions including nearly 1 million permanent loan modifications. while in conservatorship, we're also seeking to insure the country continues to have a reliable supply of mortgage finance. the enterprises of guaranteed roughly three out of four performing mortgages since conservatorship. we await congressional action on the future of housing finance. fhfa has initiated several projects to prepare for the future system on housing finance. these include standards for mortgage services, a reconsideration of mortgage servicing compensation, and establishing disclosures for mortgage-backed securities. i recognize there is a great deal of concern about executive compensation at the enterprises. i would like to make three

observations. first, the executives most responsible for the poor business decisions that led the enterprises into conservatorship and led to the taxpayer losses are long gone from the companies. second, the best way to address concerns with executive compensation is action by congress to restructure the nation's housing finance system and is of the conservatorship -- dissolve the conservatorship. i need to ensure the enterprises have people with the skills needed to manage $5 trillion worth of mortgage assets and $1 trillion in annual new business that the taxpayers are supporting. others may believe this sort of talent is quickly hired a compensation far below that of competing private firms, but i

do not. the bottom line is that this is a question of judgment. it is judgment exercised by balancing the need to limit compensation as much as possible while ensuring stable, continuous operations of the enterprises in support of america's housing finance system. it has been the judgment of fhfa that taxpayers who have been providing support and guarantees on $5 trillion of mortgages would not be better off if we promoted rapid turnover of senior management by further slashing compensation. such pay cuts would increase the risk of higher losses in the future. compensation is already reduced by 40% on average when the program was put in place. i would also note that continued employment in an enterprise risks substantial career uncertainty.

the work comes under a much higher degree of scrutiny at freddie mac than exists at private firms. executives who have spent their career developing reputations risk tarnish to their reputation under the highly charged environment in which these companies operate today. this is true regardless of how well they perform their duties or how great a financial sacrifice they may have made by forsaking other private-sector opportunities in order to assist the country's housing finance system. there has been intense criticism launched at corporate executives not even employed by the companies when the bad loans leading to the majority of today's losses were booked. people who arrived after conservatorship to try to make things better. i am trying to encourage these people to stay and continue to mitigate losses and keep the current infrastructure of the country's housing finance system operating. to repeat myself on one point, the only way to finally resolve

this question is for congress to end the conservatorship spanned chart a new course for the country's housing finance system. mr. chairman, thank you again for the opportunity, and i look forward to respond to the committee's questions. >> thank you. i now ask unanimous consent that the sellers of united states government officials -- of various officials going from the president of united states, the vice-president, down to the -- yourself -- be admitted into the record. without objection, so ordered. additionally, i ask unanimous consent that the article of yesterday in bloomberg news week entitled "ogle sam is a reluctant landlord of foreclosed homes" be placed into the record -- entitled "uncle sam is a reluctant landlord of foreclosed homes." i now recognize myself for

questions. mr. williams, you are a career employee, right? you came up through the ranks? what did you make in 2002, if you recall? >> what did i make in 2002? i do not know. of the top of my head. i would have to follow up. >> give me five years ago what you made. >> again, congressman, i do not have that off the top of my head. >> what was your starting pay when you came? >> i imagine it was around $115,000. when i joined the company over 20 years ago. and it 20 years ago, he came with an organization that paid you $15,000, right? >> $115,000. >> they paid you more than than

they paid congressman. that has not changed. less than the president. he was making $200,000 perhaps back then. when did you first make over $1 million? let me rephrase that -- i have the luxury of making over $1 million. in exactly remember -- i exactly remember the year i made over $1 million. i'm sure you do. >> congressman, i am not sure what your that was. >> so money is not that important to you? >> money is important to all of us who are here today. >> if you are a career government agency employee. >> i have been an employee at fannie mae for 20 years, serving under fast-related roles beginning to technology all the way to chief operating officer. >> ok. i do not want to beat the dead

horse, but you came out to an organization backed by the government that had a pay scale. did you ever have expectation that you were going to make not just seven figures, but several of them, that you would make $8 million or $9 million every two years? >> i think we all hope to aspire to advance in our careers and advance our compensation as we do. >> but you made $9.3 million in the last two years. the president made $800,000. you think that is okay? >> congressman, i have been brought in and asked to take on this role as ceo said that i could put in place a management team that can help achieve the goals of conservatorship, which is stabilize the company, provide liquidity to the market, and help -- >> but you are still losing money. you had taken $90 billion, and you are getting $9 million a year.

blumberg and other organizations -- bloomberg and other organizations were concerned because you do not come with a background like others that -- like others do appear basically, you are not qualified if you do not look at the resin in -- at the resume. what did you make your last year at putnam? >> i do not recall. >> did you make more than $1 million? >> yes, i did. >> was your compensation tied to performance? >> yes. >> was it tied tightly to performance where you could look at the yield or accounts in order to determine what your bonus would be? >> it was tied to the performance of the funds. it was tied to the economic performance of the company, and i had equity participation as well. >> equity participation always assumes that the stock goes up, right? >> it does not always.

it happened to during my tenure. >> your options were worthless the stock went down. >> that would be correct. >> at freddie mac, has your stock gone up? >> i and my tenure, it has not. >> i just want to make sure. $7.8 million in the last 10 years is based on the company not worth more today. for the record, if i were to look at the net profits for fannie mae, from 2003 to 2010, a with find that net profits workbooks a $10 billion or $11 billion loss. at freddie mac, i will find a $72 billion net loss over that same time of nearly a decade. including the time before you came in in which the books were being effectively cope by taking in bad debt that was going to go bad, but in fact, putting it on, there were paper profits, but over that time, you were in

an organization that certainly lost $14 billion in 2010 and was equally or more this year. that is the organization you are running for $4 million a year. that right? >> yes, we have lost money due to loans in 2005. >> i want to get one last thing in for the record. your salary is all you get, right? >> yes, they are all i get asthma salary. >> and you do stay for that menial amount of money for the unknown reason even though you could make more money elsewhere? >> i am still here, mr. chairman. >> thank you. >> thank you very much. i must tell you -- you all come from a different world than the one i come from. if i had made $1 million, i sure would know when i made it.

i want to just go to performance. i do not remember hearing the word "performance." i may have heard it, but i do not remember hearing it. you said your testimony as part of compensation executives receive is based on performance, but with all due respect, their performance and yours has been severely deficient, especially in the area of resisting homeowners. in 2008, congress and the president directed you to help homeowners in need. congress passed emergency economic stabilization act and the president signed it. freddie mac and fannie mae fell and demand a plan that seeks to maximize assistance to homeowners. in your testimony, you confirm this is one of your three goals, did you not? >> i did. >> but i have seen no plans do this. what i have seen is an agency that basically has to be dragged

to do its work by the congress. let's look at performance. the loan modification program was supposed to help homeowners modify their loans. so far, it has helped 800,000. is that true? >> i believe that is correct. it is not a correction -- correct for a function of loan modification activity and fannie mae and freddie mac. >> the home affordable refinance program -- that was supposed to help between 4 million or 5 million borrowers refinance their home loan rates. so far, fewer than 900,000 have been refinanced. is that right? >> there have been over 900,000 to date. as you know from the changes we have made to the program recently, we are expecting an uptick in that. >> of course we are, but we are talking about what we have done to date. these gentlemen are making this

money now. i am talking about today. i am looking at performance now. it was not until president obama made an address to congress that you started to revamp the program in a serious way. let's look at ha fa >> i actually directed those companies to work on a thorough re-examination of the program several weeks before the president was a draft. that work was already under way. >> you could have started that a lot earlier, could you not? >> we did try it last winter. we made some changes, and i regret that -- well, i do not regret anything. we redoubled our efforts in august, and i am pleased with the results. >> let me tell you, while you may not have regrets, i have regrets.

i have regrets for the people being put out of their houses and need help and would like for the goals that were stated to be manifested, and that, i do have regret about. in this thin your lack of regrets. i am is so sorry to hear you have no regrets perak i wish you good people -- face the people out in the elements. that i did not say that with regard to american homeowners. please do not take my comments out of context. i believe we have been working very hard to provide assistance to american homeowners. with regard to the quotation from statute that you cited, it is quite right. eyesight it myself quite frequently, but the full quotation includes that we were to undertake this maximizing assistance to homeowners in consideration of the net present value to the taxpayers, and i believe that makes what we are doing in terms of providing relief to home was consistent with our mandate as conservative to preserve and conserve the

profit of the company and thereby minimize further losses to the taxpayer. them the mandate is that you shall implement a plan that seeks to maximize assistance for homeowners and use this authority to encourage the servicers of the underlying mortgages and considering the present value to the taxpayer to take advantage of the hope for homeowners program. is that correct? >> that is a concern. you raise an excellent point, and it is one of the key accomplishments we have had. the fhfa as with fannie mae and freddie mac to provide uniform standard so servicers would know how to effectively, efficiently, and timely response to troubled borrowers. i think we learned from some of the difficulties over the last few years. we put in place an identical set of service and requirements for mortgage servicers so that the moment embargo still in good,

they now have clear instructions and positive incentive to make early and robust contacted to borrowers to find out what the difficulty is. we are placing a tremendous amount of emphasis on getting immediate contact with the borrower and trying to find an appropriate solution to the difficulty because what we have learned is that after we do that, the greater the likelihood of success, and i believe our efforts in this way have been very much consistent with fulfilling the mandate that you quite rightly sign. >> really quick, i ask unanimous consent to yield the gentleman more time. >> thank you. i have said this before, and as i listen to your defense -- and i do consider the defense, and rightfully so -- i said to you and i beg you to not mistake a, -- a comma for a period.

that is what troubles me. that is what troubles many members of congress. i have said to you with all sincerity -- i am not trying to hurt your feelings or anything like that, but i have to tell you, i am talking about people who are in pain. i mean, big time. i beg you -- do not mistake a comma for a period. >> i appreciate that. i have benefited from our discussions the last couple of months, and i remain committed to making sure fannie mae and freddie mac doing all appropriate things to be able to help american homeowners who are in trouble in the mortgages. we will continue in that effort. i am taking under consideration all of the things you have told me, and i believe we share a deep concern for the number of american households that are troubled. we do share a desire to provide appropriate assistance to them,

and we will continue to try to improve our efforts in that way. >> thank you for your indulgence. >> i ask unanimous consent that the entirety of the act be placed in the record, and at particularly cite powers of the conservatorship. the agency may, as conservative, take such actions as may be necessary to regulate the entity in a sound and solid condition and appropriately to carry out the business of the regulated entity and preserve and conserve the access and properties of regulated entity. i believe that is what the gentleman is referring to. with that, we recognize the gentleman from michigan. >> thank you, mr. chairman. i heard you state that you appreciate as inviting you. thanks for your use of words there. i could not have said that

myself. however, this is a duty we have to do. the $12.79 million in bonus pay for 10 executives that we are discussing today -- bonuses that you approved -- was for providing "liquidity, stability, and affordability" to the housing market. bankers, lenders, financial institutions back at home who desire that would agree with that and want that to continue. but in light of that, what benchmarks are fannie and freddie meeting that would allow such bonuses to kick in? especially in light of taxpayer losses of approximately $170 billion. >> this is detailed in the annual securities filings of the two companies. as reported in my written statement, these losses that the taxpayers are absorbing are a

result of business decisions made pre-conservatorship and mortgages that were originated pre-conservatorship. they cannot undo mortgages that are made, but what they can do is they can take aggressive actions to mitigate those losses will loan modifications and other foreclosure prevention activities. i report monthly to the financial services committee and senate banking committee on the efforts that have been undertaken to that end and the raf things in which they are assessing go to efforts to minimize losses, undertake homeowner assistance, insure that there is ongoing liquidity in the market, and to be working with us on things such as the servicing improvements i talked about.

>> a lot of all that continues on, in light of what mr. cummins mentioned also about his people, likewise in my state of michigan -- you stated in your opposition -- you stated your opposition yesterday to putting these executives on par with the federal pay scale. position that you continue to suggest today in commons, i believe. a legislative proposal that would pass out of the house services committee yesterday to do just that. why do you oppose that. more aggressively, why do you oppose that, and in view of the federal agencies cannot perform their duties because they do not offer wall street-size paychecks? >> i oppose it simply for the matter that i believe immediately putting all the employees at fannie and freddie on a completely different pay scale will result in the taxpayer losses of fannie and freddie going up not down. put simply, the chairman read

the exit from the legislation regarding conservatorship. an important aspect of the and what you read is that i am conserving and preserving the axis of a business entity, and these remain business entities, and they remain regulated entity's. they are not government agencies. congress of united states wants to take action to make them government agencies, make the employees government employees, that is a different story and legal structure than the one that i am being held responsible for overseeing today. what i am being responsible for overseeing today, the way the law works today, fannie mae and freddie mac employees are not government employees. these are not government agencies. they remain private corporations undertaking trillions of dollars of business participating in the marketplace. they continue to be subject not just to fhfa regulations -- they continue to be subject to other

laws and regulations that apply to similar financial institutions. >> in the sand all of that. our citizens do not. we are in tough times, and sometimes, difficult decisions have to be made. if indeed there's public service like you indicated that you want to provide a service, and the gentlemen sitting next to you have indicated the same thing. in october, you announced that you would be stepping down from your position once a successor has been named. >> that is correct. >> did compensation play any role in this decision? >> it did not. >> mr. williams, earlier this year, you stated you would leave it to the fhfa to determine what your corporate compensation would be. if course was changed and it was decided your compensation should be curtailed, would be fine with that? >> congressman, i would evaluate my own personal options, but i

would leave it to the decision of the board and director. >> i thank you, gentlemen. i ask unanimous consent to enter into a record a study of 2011 compensation done by the association of corporate counsel southern chapter of 2011. would that that in public companies, compensation in 2011 was approximately $400,000 for general counsel, but freddie mac received $2.9 million and fannie mae received $2.6 million, more than four times the compensation that at least the southern california chapter believes is fair. >> if i may, i think this is pretty important because of the theme of your hearing here regarding protecting the american taxpayer. i would like to point out to the committee that fannie mae and freddie mac with fhfa has filed

lawsuits against 18 of the biggest financial institutions in the country and even the world to recover losses that we believe are the legal responsibility of others. this is part of our activity to protect the american taxpayer and carry out our conservatorship responsibility, but i would say, mr. chairman, that for us to be able successfully execute on such complex litigation regarding complex financial transactions and securities, i need to have qualified and experienced counsel to be working with us on that. i believe that this is an investment that we are making that is part of protecting the american taxpayer. these are the sorts of things that if we fundamentally and radically and immediately change the role of the game with respect to how we perceive fannie and freddie, we may gain in terms of compensation, but i

would like the committee to know that from my perspective as conservative, i believe we risk of the things that could harm the american taxpayer. >> i actually did not have any time. i know there will be further dialogue, and i will seek time to have this dialogue, but at this time, we recognize the gentleman from ohio for five minutes. >> thank you very much and thanks for holding this hearing. one of the things that is interesting is that occasionally, you get some insight into how people think in a broader sense about those who are supposed to serve. of the witnesses, only one seemed to understand the concerns that the american people have about this issue that faces this committee today. so i want to thank you for that. i also want to say that in listening to the testimony, my

concern is there may not be enough sympathy for people that are losing their homes. if there is a gap with tremendous pay being given to people at the top and we do not see enough sympathy for people who are losing their homes, that may mean that you just do not get it. you are too far removed. on november 1, your general counsel wrote a letter to the ranking member to disclose the last year, fannie mae and freddie mac impose a $150 million in penalties against banks for not foreclosing on homeowners fast enough. here is what your general counsel wrote -- "today, top-10 services account for the bulk of the fees do.

the total amount for servicers after approving appeals and corrections is approximately $150 million for 2010." this is astounding with all the abuses going on with robo- signing and filing a false course documents -- falls court documents. were you aware of these penalties? >> i am aware of them, and i can explain them. these buildings are a result of the failure of mortgage servicers to perform under their servicing contracts in a way that driving up costs to the american taxpayer. i went into some detail about the effort we have undertaken to ensure that servicers are reaching out to troubled borrowers from the moment that -- >> with a minute, there is a point you are missing. there was an inspector general

finding -- you are familiar with it -- that fhf directa and fannie mae to compose compensatory fees for violating foreclosure timeline limits. is that true? did you actually up for that? you were aware of the abuses going on but failed to report them? >> with all due respect, these are two different issues. the compensatory fees that had been assessed have been done so with recognition and allowance for the delays in foreclosure processing, either due to assisting the borrower is to try to find a foreclosure alternative or because of foreclosure delays that have been driven by things external to the servicers control'. >> the conclusion was that there were multiple foreclosure

abuse risks prior to 2010 that could have led to identifying an acting earlier on the issue. including consumer complaints alleging improper foreclosures, contemporaries -- contemporary media complex, a public court filings for such abuses. as you are aware of these abuses, why would you order hundreds of millions of dollars in penalties to try to speed up the process even further? why would you do that? >> i would like to again try to separate the abuses. servicers were not performing adequately in foreclosing on properties that have gone multiple years without any payments because this is driving up the cost of the taxpayer. we are foreclosing on properties that have had no payments for two, three years or more, and in all this time, the american taxpayer is funding those mortgages, and it is also

damaging local communities and damaging housing markets to have these properties sitting there with no action being taken against them. congressman, with all due respect -- >> with all due respect to you, sir, the report talked about supporting personnel overloaded with the volume of foreclosures, documentation filed for evidence, they said. members of the committee, what you have here is a situation where they are focusing on accelerating foreclosures and hurting our constituents. i am from finland. we have more foreclosures there than most areas. >> the gentleman's time is expired. mr. walsh of illinois is recognized for five minutes. >> thank you, mr. chairman, and thank you for being with us today. a couple of quick points and then an overall question. we talk in trillions, billions, and millions around here. we are $15 trillion in debt. fannie and freddie have been subsidized to the tune of about

$170 billion the last three years. executive compensation last year in 2009 and 2010 was about $35 million. big numbers. they jump out. quickly, two smaller numbers jumped out at me. fannie and freddie paid outside compensation consultants $655,000 in 2008 and $560,000 in 2009 to determine their own pay structure. we paid outside consultants that much money to determine the pace structure? does that sound right, mr. williams? does that sound excessive? >> congressman, we hired a company, and the board of directors hired compensation consultants to help them structure a compensation program format.

at the request of fhfa. they work in partnership with them and the treasury approach to develop their compensation. >> $655,000 in one year to help you determine your pay structure. does that sound excessive? >> it sounds like a lot of money, but there are compensation consultants better -- that are required for the board in addition to the company's compensation consultant. i think that number would include four consultants if i get it right. i think you were pointing out enterprise. >> i agree. it is a lot of money. >> one other point on your testimony -- you said that the 15 highest executives today are paid roughly the same as the top five a decade ago. i do not know that that is

something to rave about. james johnson, 1991 to 1998, and $100 million. franklin raines, we remember that name. the earned more than $90 million. i do not know that it furthers our topic. i appreciate the tone you took, that you understand the outrage, certainly, that congress feels. in theory and in practice, we reflect the outrage that is out there. but understand something -- many members of congress came here because this country is broke. big freshman class. republicans and democrats, most of whom left probably much

higher-paying positions to come here and serve this country because this country is broke. i am not unusual. there are other members like myself who came here. turned down my health benefits, turned down any pension benefits because we have all got to do something pretty quickly, or we will be in a heap of trouble and future generations will be in a lot of trouble. so i appreciate that you understand the outrage, but are you telling me that unlike congress and some other departments in government, we are fundamentally not able to find people who need to do what they need to do at fannie and freddie for less than the amount of money in base pay and bonuses that we are paying folks? and if so, do you understand how a lot of people might find that hard to believe?

>> first of all, i think all of us appreciate the public service of the entire congress and realize that many have made a personal sacrifice to take on those roles. i commend the acting director for the public service that he has given the country, and there are many examples of people who have done that. the dilemma i face -- maybe i can bring the numbers down a little bit in size. one of the important functions we perform at freddie mac is managing an investment portfolio. when i took over my job in august 2009, that investment portfolio was $900 billion. we brought it down continuously. it is now about $680 billion in size. there are people who are managing that portfolio. what i worry about is if they make a 1% mistake, that costs the taxpayers $6.8 billion. if they make 8.1% mistake, it

is $680 million, and the people that are required to effectively manage that money and that investment portfolio and not make those mistakes are highly skilled, sophisticated, decent people -- seasoned people that have many opportunities for high-paying jobs, and we need some of them to make sure we do not make some of those mistakes. that is the dilemma. >> thank you, mr. chairman. >> thank you. let me change tax here and live and if i can. i want to ask you about principle reductions. that will be no surprise to you, coming from our many previous discussions, but first, i want to share some comments. former special inspector general -- "then needs to be a recognition that many borrowers will not make the required payments on their underwater mortgages, that the owners of the mortgages have already watched any chance of recovering the outstanding principal. as soon as this is a dress, the

sooner a recovery can take hold. as such, an aggressive principal reduction program is necessary. former vice chair of the federal reserve act said most economists see principal reductions as central to preventing foreclosures. ben bernanke, the federal reserve chairman said in this environment, principal reductions that restore equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure. chief economist for moody's analytics, the week of an anticipated hat -- a weaker than anticipated housing market poses a threat to expansion. he proposes the government facilitating loan modifications with substantial write-downs. when congress passed the emergency economic stabilization act of 2008, we directed fhfa, fanny, and freddie to implement a plan that seeks to maximize the system for homeowners. it does talk about having the mortgage services and coverage services to take advantage of

programs to minimize foreclosures. there is nothing in the law that ic that prevents you from approving a program to reduce principal if it is in the interest of the taxpayers. fannie mae's second quarter credit supplement says the average return for fannie mae this year on foreclosed properties is 55% of unpaid principal balance. you lose 45% of the foreclosed property. if that is the case, but you would only lose 5% of the principal reduction program, why not reduce the principal and keep the borrowers in their homes. >> we have been through the analytics of the underwater bar wars and with that the alternative -- the foreclosure alternative programs that are available. we have concluded that the use of a principal reduction within the context of a loan modification is not going to be the least cost approach for the taxpayer to allow this homeowner an opportunity to stay

in their home. we are using aggressively loan modification activities that include principal forbearance, which will zero out the interest rate charge on the underwater portion of the mortgage without forgiving the debt of the mortgage, and this is all designed to get the bar were into an affordable monthly payments so that they can continue in their home. that has been the basic calculus that has guided this decision. as i said before, i do not believe that i have been appropriated taxpayer funds for the purpose of providing this more general support for the housing market. we are supposed to undertake our loss mitigation activities with regard to the cost to the taxpayer. >> but you have been empowered. you have the fiduciary responsibility of maximizing the value of the taxpayer's assets, and it is less costly to modify the principal, modify the loan than it is to build a foreclosure, i would think would be breaking the fiduciary responsibility.

you are telling that all the people -- you just come up with a different idea. maybe you would share with us your calculations so we could run it by some of these other people who see it quite differently than you do. several of the banks are already doing principal reductions right now. we have the service to reduce the loans to 95% of the homeowners their market value. excess principles for given over three years as long as the homeowner remains current. when the home is sold or refinanced, the borrower pays 25% of the appreciated value. according to the company's ceo, shared appreciation modifications help homeowners avoid foreclosure, restore equity, providing a significant benefit to the customer, the economy, and the housing market. they are not doing that to be nice. you know that. it is in their financial self- interest, and i do not think you have made a compelling argument why it is not in the self- interest of fannie mae, freddie mac, and the taxpayer. j.p. morgan chase is doing it. bank of america, wells fargo.

they reduced by an average of $50,000. is everybody else wrong? >> i believe -- congressman, i believe that the decisions with regard to forgiveness are consistent with our statutory mandate. i believe we are taking all the effort to provide assistance to homeowners, and i did not believe i have been authorized to use taxpayer money for a general program of principal forgiveness. >> i would like to do two things for the committee if you will. first, i want you to identify anywhere in the statute that prohibits you from developing programs because, as i read the law, you do not have the authority to do that. second, i would like you to submit whatever analysis you have done that shows why reducing the principal of some mortgages is worse for the united states taxpayer than foreclosure.

if he could provide that analysis, i would appreciate it. will you do that for us? >> we will provide the information, as you suggest. >> time is expired. gentleman from texas. >> thank you. i would like to start my questions with you. a lot of your -- first off, i want to commend you for being here. if i were taking a salary like you guys work it sounds, i would be reluctant to be up and facing the people. i admire you for taking the heat on this. let me ask you a question. you compare your salaries in justifying them to those made in private sector companies. in those private sector companies, very often, the compensation package is based on very specific design results and the performance of the company, and you are -- you basically serve at the pleasure

of the shareholders through a board of directors. you guys basically are serving the taxpayers. we have invested a whole lot of money in your company, and, really, this committee and congress is about the total level of oversight we have. what i have heard from people back home is a pretty consistent, "wow, what are you taking this much money and performing so poorly? i have heard you say that it would be doing worse if you were not doing what you do, so let me ask you this -- would you all invest in freddie and fannie? would you put your own money in that and expect a return or to see it level out? i guess we will start with mr. williams. then a congressman, let me start with a few points. first of all, to your comment, the losses that we have been incurring are due to the loans

that were booked prior to thousand nine. secondly, the management team that we have brought in is a new management team to deal with the challenges that we are facing and the specific issues we have been asked to serve as conservative. stabilize the company to provide the necessary liquidity and support to the market, insurer the adequate supply of affordable rental housing and help distressed homeowners wherever we can. >> i understand, but you started this company 20 years ago -- in this company 20 years ago. i think you testified earlier well over $100,000. you have been there through this. again, tell me if you were -- where were you kicking and screaming to say we were about to get in a lot of trouble? >> congressman, i am happy to discuss my role prior to conservatorship. in the years leading up to conservatorship, i served as chief operating officer of the company. i was responsible for managing

our regulatory agreements that were put in place prior to conservatorship and making sure we achieved all the objectives under that. i was responsible for leading the company's efforts to get current with sec filings, which we did all that, and i led the company -- i oversaw the company's areas such as technology, human resources, as well as -- >> but did you not have to see some of this coming from the executive level? >> congressman, in hindsight, i am sure we all wish we could have made different decisions back in that time. >> let me ask one more question. i think it would be fair to say there are a lot of people that take jobs for less money than they would make in other jobs, for reasons beyond compensation. take the president. it does not pay all that well. the supreme court does not pay nearly what a good lawyer can make in the private sector. certainly, our teachers who are

underpaid throughout this country take jobs for reasons beyond compensation. and you look at the private sector. vikram pandit of citigroup says he will not take compensation until the company turns a profit. do you think we could get qualified people to do your jobs and the jobs of those other senior executives without having to pay millions of dollars? >> congressman, i am happy to address that question. first of all, as i noted, this is a new team. we have reduced executive compensation by 50%. we have reduced the number of senior executives by 30%, but i can tell you -- are these jobs competitive? >> yes. in the course of three months, i lost by a senior vice presidents out of the company to financial services in other companies where i can assure you they were making more money and had better career prospects as a result.

these are challenging jobs in challenging circumstances, and we need to reward the people who are doing the jobs. >> i see that my time is about to expire. i apologize for not getting to you, mr. alderman. >> mr. davis of illinois is recognized for five minutes. >> thank you, mr. chairman. when you announce these compensation packages in 2009, you issued a press release explaining that these million- dollar salaries were necessary" patch -- "attract and attain -- necessary to pass that attract and retain the talent needed." in a recent letter, you wrote that you were also concerned about a rapid turnover of management and staff, replacing people lacking the institutional, technical, operational, and risk- management knowledge needed for

the running of corporations with thousands of employees with more than $2 trillion in financial obligations. let me ask -- what kind of analysis did you do prior to making these conclusions? did you survey the current staff that was present? and do you have some kind of document that you could share with us that would demonstrate the potential effect of lower salaries on the work force on the agency's and ultimately on the homeowners who have mortgages to pay? >> congressman, with regard to the announcement of the pay structure that took place in 2009, the background for that was developed over the course of time by my predecessor, and when i became acting director, i assumed a completion of that work. it was done in consultation with

other government agencies. it was done in consultation with pay consultants. it was done in a lot of consultation with a special master for compensation at the treasury department who assessed what the market was like for compensation in troubled large and complex financial institutions and what the right structure and balance was to wait between the need to have competent, skilled professionals running these complex financial institutions against market conditions at the time and the market opportunities that they had. that was all part of the determinations that went into the announcement in 2009. since then -- >> let me just ask you, since time is going to expire. earlier this year, the inspector general for the federal housing finance agency issued a report evaluating your oversight of

executive compensation at fannie mae and freddie mac. the report stated that you never seriously considered comparing compensation at fannie and freddie to compensation at other housing agencies. is that true? >> we did not consider the fha commissioner or head of ginnie mae to be market comparable to private companies that operated with all the liabilities and responsibilities of a private company. government employees are well aware of the compensation that those executives have. >> you are saying you did not make a comparative analysis of other housing agencies that might have some of the same responsibilities, although certainly not as much and certainly not of exactly the same type?

>> that is right. i am saying we did not find that to be comparable to two private companies that were operating in the marketplace with all the legal responsibilities and liabilities of private, complex financial institutions. >> do you think that the federal housing administration, ginnie mae, and other agencies, who seemingly were doing much better, did not take into consideration the same factors and the same market and the overall conditions of the economic climate? >> i am not sure i follow the question, but certainly, government employees have a completely different set of benefits and personal liabilities or lack thereof when it comes to their engagement, and i do believe, and i have a great deal of respect for people that come into political positions in government. they take a huge cut in

compensation for the opportunity to be direct players in assisting the country and in guiding policy making in the country. these are temporary positions that they fill before going back out into the private sector. i do believe that the leadership of a company that has $2 trillion with the obligations needs to have -- >> bottom line, do you think that the salaries are necessary and we could not do it any other way? >> i believe what we have in place is best to minimize the losses to the taxpayer in terms of the overall situation that we have as long as fannie and freddie are in conservatorship, and it is why i said in a statement i really wish that we could have the administration and the congress of the united states get together and come up with legislation that will bring these conservatorship to an end and to build an appropriate housing finance system. >> thank you very much, chairman. >> i thank my colleague for 5

minutes. >> first of all, let me just say that the problem started in 1994 when you loosen up -- you were not here. none of you were here -- when we loosened up the underwriting standards to give loans to people who cannot afford to make the payments. it is crazy. i was an underwriter for an insurance company for a long time and i know how the company works. you just do not do it. and it is not rocket science. the minute you get a loan to somebody who does not have the capability to make the payments, you have created a mess that is inevitably going to end in disaster. that is what you have inherited. i do not know how you did not see part of this, but nevertheless, the problem was pretty apparent to somebody that has any idea how finances work. let me just ask a couple of questions.

you had an outside entity make a recommendation on compensation. then, you as conservatives made a recommendation to the board, and that was pretty much approve. is that the way it works? >> i had responsibility for the final decision. >> you made the decision on compensation? them ultimately pirie the work was well under way before i became acting director, but ultimately -- >> we talk a little bit about this before. for legal counsel, for public companies. i heard what you said about the expertise of these guys. the 2010 salary for public companies was averaging about $266,000 and with a bonus was about $104,000. for a private company, the salary was $204,000, and the bonus around $104,000. under freddie mac, the general counsel got $2.9 million in

2010, and the general counsel got $2.6 million in total compensation in 2010. in the stand that they have the expertise and i understand it had to have a good staff in order to make sure that the litigation was processed and pursued in a very rapid way, but that just seems very excessive to me. are competent in many ways, and i do not have the time or inclination to go into their qualifications, but when you looked in the salaries and realize the problems the country faces, it is just excessive. i do not think anyone would disagree with that. i am very disappointed. you talk about being very cognizant of the taxpayers' money. i am very disappointed that this kind of take is being given with the bonuses and everything when it is far in excess of the

private sector in most cases. you inherited a lot of the problem. do not misunderstand. i understand that. the underwriting was terrible before. i do not know how we will get out of this quagmire, but the fact is it is excessive and i think it needs to be corrected. we have to have competent people. we have to make sure we have competent people that can do the job. but i think that when you start giving the salaries out to these people, you have to make absolutely sure you are not being excessive. i am sure you are trying to do the job to the best of your ability, but i hope you will try a little bit harder, and if you have recommendations on what congress can do to help deal with this problem, i would sure like to see it. i would like to see fannie mae and freddie mac be done away with and go back to the private market where sound business principles are applied to make sure that qualified people are buying these houses instead of trying to help everybody out,

especially those who cannot afford them. you just did a bigger and bigger hole, and that is why the country is in the mess that it is in right now. i yield back. >> from former chairman to former chairman, mr. towns is recognized for five minutes. >> thank you very much, mr. chairman. let me begin by saying i want you to help me to be able to determine how you arrive at these bonuses. i know that an education, if you are able to lower the dropout rate, you are able to improve the reading score. have great attention in terms of students graduating on time or staying in school. based on that, the teacher gets a bonus. i think that makes sense. they have done something outstanding. now, they are rewarded.

tell me how you arrived at the bonuses. >> fhfa in consultation with the boards of directors of each company directed corporate scorecards for each company outlining an array of areas of performance regarding minimizing losses to the taxpayer, read mediating operational and risk- management weaknesses at the company, and insuring that the businesses operated effectively and efficiently, so there was an array of items that were put into the corporate scorecard. these are then scored by management at the end of the year. finally by my staff in terms of assessing performance. that becomes a key. it is a determination of these bonuses. it has the following components

-- instead of target compensations for each executive, it is aligned to be at or below the median of a comparable position in a comparable firm. in the target compensation, 1/3 is set aside to be paid in the form of a target incentive opportunity or what you will refer to as a bonus. that gets paid out over a two- year period after the performance year. the rest is salary. the majority is held off as the first salary to be paid the following year, and that is done for retention purposes. furthermore, to incentivize performance there, a powerful image a portion of that deferred salary tied to corporate performance allowing for a reduction in the actual amount of deferred salary that is paid if performance does not measure up. as detailed in my written statement, in each of the years we have done these assessments,

we have not awarded full amounts for the the the deferred salary or either the target incentive opportunities. we have awarded less than the targeted amount. >> let me just say that i noticed in terms of my good friend and colleague, indicated what happened, but i think there is one thing we are not considering, the fact that in many families, one person has lost his or her job, and that has created a lot of problems along the way. when i walk the streets in my district, i listened to the people that are losing their homes. you look at the salaries, and you might ask, "why don't we take these salaries and save a whole block?" this is what you hear from the people in the district that i represent.