Freddie found itself in Justice Department crosshairs in 2003, after it finally admitted to years of accounting schemes to underreport its earnings...to the tune of $5 billion. Freddie paid a $125 million fine to federal regulators, more than $400 million in shareholder lawsuit settlements, and $3.8 million in civil fines to settle Federal Election Commission charges of improper political fundraising.
Freddie's creative accounting was nothing compared to Fannie's. As determined by two separate federal reports in 2004 and 2006, Fannie Mae out-and-out cooked the books so the bigwigs at the top could rake in millions in windfall profits. The Washington Post reports that Fannie misstated its earnings by about $10.6 billion from 1998 through 2004. all so fraudulent multimillion dollar bonuses could kick in for Fannhie's bigwigs.
Those Fannie Mae bigwigs who cashed in on the cooked books? Chairman Franklin Raines, Bill Clinton's OMB director...A whopping $52 million. Vice Chair Jamie Gorelick (remember her from the 9-11 Commission hearings), Clinton's deputy ATTORNEY GENERAL, $15 million. Chairman and Chief Executive James A. Johnson, liberal lobbyist (the one who was kicked off Obama's VP vetting committee...looks like they should have vetted their committee) due to his role in the Countrywide financial scandal...$1.9 million. Raines and the CFO of Fannie Mae were ousted.
Dems, loathe to clean up Fannie and Freddie houses even though Greenspan said preventitive action needed to be taken "sooner than later," came up with a "reform bill" in early 2005. The Department of Housing and Urban Development (HUD) mandated that Fannie and Freddie had to start handing out mortgages to "minority and moderate income buyers." Whether these new customers were creditworthywas of little concern; Congress had race and bean-counting to achieve. And now they basically owned half of the US housing market.
And now the American taxpayer is bailing out BOTH of these companies.
Is Fannie Mae/Freddie Mac the Democrat's Enron? Sure looks like it to me.
And incidentally, Franklin Raines has been advising the Obama campaign on the mortgage and housing issues....ahem. |
