When he wasn’t busy helping create a $127 billion mess for taxpayers
to clean up, former Fannie Mae Chief Executive Officer Franklin Raines,
two of his top underlings and select individuals in the "green" movement
were inventing a patented system to trade residential carbon credits.

Patent No. 6904336 was approved by the U.S. Patent and Trade Office
on Nov. 7, 2006 — the day after Democrats took control of Congress.
Former Sen. John Sununu, R-N.H., criticized the award at the time,
pointing out that it had "nothing to do with Fannie Maes charter,
nothing to do with making mortgages more affordable."

It wasn’t about mortgages. It was about greenbacks. The patent, which
Fannie Mae confirmed it still owns with Cantor Fitzgerald subsidiary
CO2e.com, gives the mortgage giant a lock on the fledgling carbon
trading market, thus also giving it a major financial stake in the
success of cap-and-trade legislation.

Besides Raines, the other "inventors" are:

* Former Fannie Vice President and Deputy General Counsel G. Scott
Lesmes, who provided legal advice on Fannie Maes debt and equity
offerings;

* Former Fannie Vice President Robert Sahadi, who now runs GreenSpace
Investment Financial Services out of his 5,002-square-foot Clarksburg
home;

* 2008 Barack Obama fundraiser Kenneth Berlin, an environmental law
partner at Skadden Arps;

* Michelle Desiderio, director of the National Green Building
Certification program, which trains "green" monitors;

* Former Cantor Fitzgerald employee Elizabeth Arner Cavey, wife of
Democratic donor Brian Cavey of the Stanton Park Group, which received
$200,000 last year to lobby on climate change legislation; and

* Jane Bartels, widow of former CO2e.com CEO Carlton Bartels. Three
weeks before Carlton Bartels was killed in the Sept. 11 attacks, he
filed for another patent on the software used in 2003 to set up the
Chicago Climate Exchange.

The patent, which covers both the "cap" and "trade" parts of Obamas
top domestic energy initiation, gives Fannie Mae proprietary control
over an automated trading system that pools and sells credits for
hard-to-quantify residential carbon reduction efforts (such as solar
panels and high-efficiency appliances) to companies and utilities that
don’t meet emission reduction targets. Depending on where the
Environmental Protection Agency sets arbitrary CO2 standards, that could
be every company in America.

The patent summary describes how carbon "and other pollutants yet to
be determined" would be "combined into a single emissions pool" and
traded — just as Fannies toxic portfolio of subprime mortgages were.

"Fannie Mae earns no money on this patent," communications director
Amy Bonitatibus told the Washington Examiner. "We can’t
conjecture as to the cap-and-trade legislation."

But passage of the legislation would create an artificial,
government-mandated, trillion-dollar carbon trading market that would
drive up the price of energy, indirectly making housing more expensive.

If the proprietary emissions trading system functions like other
exchanges such as the New York Stock Exchange, which makes most of its
revenue on listing and trading fees, its owners could see extremely
generous profits, especially with a patent that keeps out competition
for two decades.

So Fannie Mae, a quasi-governmental entity whose congressionally
mandated mission is to make housing more affordable, has been a
behind-the-scenes participant in a carbon trading scheme that would do
just the opposite.

In January, Europol announced that up to 90 percent of the volume in
the European Unions own carbon-trading market was fraudulent, costing
EU members $5 billion during the previous 18 months. That would be just
the tip of the iceberg if the Congress were to make a similar mistake.

But if it does, thanks to Raines and his fellow "inventors," Fannie
Mae will be laughing all the way to the (bailed-out) bank.