Tom Donilon's Revolving Door

President Obama's new National Security Advisor spent the decade prior to joining the White House as a legal advisor to powerful interests including Goldman Sachs and Citigroup, and as a lobbyist for Fannie Mae, where he oversaw the mortgage giant's aggressive campaign to undermine the credibility of a probe into its accounting irregularities, according to government reports and public disclosure forms.

Thomas E. Donilon has been formally advising Obama on national security matters since the president's transition to the White House, and he worked in President Clinton's state department during the 1990s. But in between these high-profile public-sector assignments, Donilon was a highly paid lobbyist who represented an array of well-heeled and powerful clients, including former Republican New Jersey Gov. Christie Todd Whitman and Obama's 2008 campaign fundraising chairman, billionaire heiress Penny Pritzker.

After a stint at the law firm O'Melveny & Myers, where Donilon was registered as a lobbyist for Fannie Mae, he took on full-time work with the mortgage giant as executive vice president for law and policy. Donilon's name appears on Fannie Mae's public lobbying disclosure reports between 2000 and 2005.

While housing sales were still booming, internally these were troubled years for the company. In a report first noted by ABC News in 2008, Donilon is described as someone who lobbied for and helped paint a rosy picture of Fannie Mae's financial health to the company's board. He did so at a time when Fannie Mae faced accusations that it was misstating its earnings from 1998 to 2004. Fannie Mae settled with the Securities and Exchange Commission for $400 million in 2006, and did not admit any wrongdoing.

Donilon's tactics reportedly included attacks on the agency responsible for policing Fannie Mae's operations, the Office of Federal Housing Enterprise Oversight, and an attempt to launch a separate investigation into OFHEO itself, according to a 2006 government report about Fannie Mae. Those efforts were ultimately unsuccessful, and regulators eventually discovered top Fannie Mae executives had been manipulating the company's financial reporting to maximize their bonuses.

During his 2008 campaign, Obama took a hard line on the behavior of lobbyists and decried the revolving door that allowed government employees to use their public sector connections to earn big money when they pass into the private sector. He created a rule that required lobbyists entering his administration to receive a waiver if they planned to do work related to their earlier lobbying efforts. But the restriction only covered those who had been lobbying within two years of taking their administration post. Donilon last registered to lobby in 2005.

A White House official told ABC News Friday that Donilon "did not require or receive a Pledge Waiver before starting as Deputy and does not need one now."

The administration official also noted that Donilon "divested all stock holdings in individual companies by 2/17/09 and did not need a waiver for his remaining assets," which are held in a variety of mutual funds, cash accounts and assorted bonds.

Shortly after Obama's election, ABC News reported on Donilon's efforts on behalf of Fannie Mae from his position overseeing the company's sizeable legal and government affairs divisions.

Donilon did not comment for the 2008 report and his spokesman, Mike Hammer, did not offer comment when contacted Friday.

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