In a pair of moves designed to polish the tarnished reputation of its Washington lobbying operation, home mortgage buying giant Freddie Mac has created a political fundraising arm and has laid plans to clean out its long roster of outside lobbyists by the end of the year.

The developments are part of a broader effort by Freddie Mac to revamp its government affairs practice after an accounting scandal forced out the company’s chief executive and a fundraising snafu cost the company its top lobbyist.

Richard Syron, the newly appointed Freddie Mac CEO, and Hollis McLoughlin, one of his top aides, hope to complete much of the reorganization between the November elections and the beginning of the next session of Congress, Freddie Mac officials say.

A Freddie Mac spokeswoman declined to comment on internal matters, but several Freddie Mac lobbyists confirmed the moves.

Freddie Mac wants to see whether Democrats or Republicans control the White House and Congress before settling on a successor for Mitch Delk, who headed the company’s government affairs office before being fired earlier this year after a series of fundraisers he orchestrated for Republican lawmakers became subject of an investigation by the Federal Election Commission.

If Sen. John Kerry (D-Mass.) wins the presidential election or if Democrats claim a majority in the Senate, Freddie Mac could give the top lobbying position to Clarke Camper, a Democrat who inherited the job of senior vice president of government relations and public policy on an interim basis after Delk left.

However, if the GOP maintains with political power in Washington, Freddie Mac is expected to look to a Republican to head its lobbying operation.

According to lobbyists familiar with the Freddie Mac search, top candidates for the post range from Terry Haines, a former chief aide to House Financial Services Chairman Mike Oxley (R-Ohio), to McLoughlin himself, who served as a top Treasury Department official in the first Bush administration.

A choice of a head lobbyist is critical to Freddie Mac because the Bush administration and several key lawmakers are are weighing an overhaul of the company’s privileged status as a government-sponsored entity.

Meanwhile, Freddie Mac officials have decided to review all of the firm’s lobbying contracts — a number that involves nearly three dozen outside firms, one of the most extensive networks in Washington.

“They spend a lot of money, and they want to see who is value-added and who is not,” said one Freddie Mac lobbyist. “They want to see if they are getting their money’s worth.”

Many of the firm’s outside lobbyists were hired by Delk. Freddie Mac executives would like to give the newly appointed chief lobbyist a clean slate to begin with.

Freddie Mac has retained 32 outside lobbying firms, according to the nonpartisan PoliticalMoneyLine, which tracks lobbying contracts.

For the second half of 2003, Freddie Mac spent $10 million on lobbying, more than any other U.S. corporation.

In part due to its team of outside lobbyists, Freddie Mac’s lobbying expenditures have swelled from $3 million in 1999 to $7.2 million in 2001 and $15.9 million for all of last year, according to PoliticalMoneyLine.

In addition to overhauling its lobbying operation, Freddie Mac has added a new weapon to its arsenal in Washington: a political action committee.

“We really wanted to give our employees a mechanism for supporting Freddie Mac,” said company spokeswoman Shawn Flaherty. “Most large corporations already have a PAC, and we wanted to have one, too.”

Freddie Mac filed the paperwork with the Federal Election Commission to start the PAC in late July. Company officials hope to start making contributions to Members of Congress by the end of the year, Flaherty said.

In creating the fundraising organization, Freddie Mac becomes one of the last major contributors of now-outlawed soft money to adopt to the new fundraising era by creating a PAC.

Freddie Mac gave $4 million in soft-money contributions to the Republican and Democratic parties during the 2001-02 election cycle, making the firm the largest corporate soft-money giver of the cycle, according to PoliticalMoneyLine.

But now that corporations are banned from writing such hefty checks to the national political parties, companies like Freddie Mac must channel political giving through a political action committee.

Corporate PACs are funded by individual donations from company executives, not from company funds.

PACs have been around for years, but Freddie Mac and a handful of other Washington heavyweights — including Fannie Mae — chose to rely on soft-money contributions to the Republican and Democratic party rather than sending smaller, hard-dollar checks directly to individual Members of Congress.

“It’s really a great way for our employees to participate,” Flaherty said.