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Covington & Burling, the law firm that has been hired by Freddie Mac to investigate a $2 million lobby campaign by the mortgage giant, was itself part of the effort by Freddie to thwart a 2005 Senate proposal that would have forced it to sell assets worth hundreds of billions of dollars.

The internal investigation into the stealth lobbying effort to stop legislation sponsored by then-Sen. Chuck Hagel (R-Neb.) was first reported by the Associated Press.

It is unclear whether Freddie Mac is using some of the $200 billion it received from the federal government to pay for the internal probe.

Freddie Mac spokeswoman Sharon McHale and Corinne Russell, a spokeswoman for the Federal Housing Finance Agency, which took control of the former government-sponsored enterprise after the housing market crashed, both declined to comment.

Covington has long served as legal counsel to Freddie Mac. Over the years, Covington has represented Freddie on matters large and small, including its defense and later settlement related to allegations that the company and its employees made illegal campaign contributions.

In 2006, Freddie settled with the Federal Election Commission, paying the agency a record $3.8 million.

Covington also has a history of lobbying for the financial services company. Starting in 1999 and continuing through July 2006, Freddie has paid Covington $1.26 million.

In 2005, Freddie paid Covington $420,000 for its partner Stuart Stock to lobby on its behalf, according to Senate disclosure records.

The firm has not publicly reported lobbying for Freddie Mac since 2006 when it reported getting paid $80,000 in a midyear termination filing.

Covington & Burling spokeswoman Kathy King declined to comment.

The law firm’s inquiry, which is being led by former Department of Justice prosecutor Stephen Anthony, is focused on Freddie Mac’s hiring of public affairs firm DCI Group to help stop the regulatory bill, according to the Associated Press.

DCI Group did not publicly register with the Senate or House to disclose its lobbying efforts.

The firm, which was paid $2 million by Freddie, largely worked to increase media attention and mobilize constituents on the local level.

According to a source close to the investigation, DCI Group’s actual lobbying for Freddie Mac, as defined under the Lobbying Disclosure Act of 1995, did not meet the 20 percent threshold of the firm’s work for the mortgage company, hence no registration was necessary.

“At the end of the day, what it really was, was part of what every modern corporate enterprise does in terms of lobbying and fostering a good legislative environment,” a former Freddie Mac consultant said of DCI’s tactics.

The firm has been contacted by Freddie Mac’s general counsel regarding the investigation, according to the source close to the probe.

“Throughout the entirety of DCI Group’s work with Freddie Mac, the firm practiced the highest ethical standards and coordinated with Freddie Mac’s lawyers to ensure uncompromising compliance with all applicable federal and state laws and regulations,” DCI spokesman Geoffrey Basye said in a statement.

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