The Federal National Mortgage Association (FNMA) and its brother, the Federal Home Loan Mortgage Corporation (FHLMC), are quasi-governmental institutions chartered by congress. That is, they are government-sponsored enterprises that make loans implicitly guaranteed by the federal government.

So what, observers ask, are they doing playing politics?

• They have contributed more than $100,000 to an ad campaign to attack presidential candidate Steve Forbes' flat tax plan.

• The money was transferred to an organization called the Coalition to Preserve Home Ownership -- whose other members are the National Association of Realtors and the National Association of Home Builders.

• The Coalition has so far spent more than $270,000 for what some critics call "hysterical" commercials in Iowa and New Hampshire attacking the flat tax because it would eliminate the tax deductibility of home mortgage interest payments. According to a Heritage Foundation paper the ads weren't even accurate. For example, they over-estimated by 30 percent the average marginal tax rate that homeowners face. Observers are also calling attention to other questionable "charitable donations."

• In 1994, FNMA and FHLMC gave more than $10.5 million to such public policy and advocacy organizations as the Brookings Institution, the Urban Institute and the Center for Policy Alternatives.

• They also gave nearly $240,000 to the Children's Defense Fund -- a favorite of first lady Hillary Rodham Clinton.

Many are questioning the propriety of such contributions by even quasi-governmental institutions.