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FANNIE MAE FALLOUT

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By thisistwitchy  •  January 6, 2005 08:38 AM

Rep. Richard H. Baker (R-La.), chairman of the House Financial Services subcommittee that monitors government-chartered Fannie Mae, is continuing his relentless campaign to hold the financial behemoth accountable to taxpayers.

Fannie Mae’s current and former executives should be forced to return any of the millions of dollars in bonuses they received since 2001 that were based on faulty bookkeeping, a congressional overseer of the housing finance company has told its regulator.

“I request your office take action to recapture all bonus payments from executives that were awarded based upon the faulty and deeply flawed earnings statements of the enterprise,” Rep. Richard H. Baker (R-La.), chairman of the House Financial Services subcommittee that monitors government-chartered Fannie Mae, wrote in a Dec. 16 letter to Armando Falcon Jr., director of the Office of Federal Housing Enterprise Oversight.

He noted that bonus plans were determined in part by the District-based company’s profit and that the Securities and Exchange Commission chief accountant had ruled the day before that the company had violated two key accounting rules. That determination, Baker wrote, “invalidates the earnings on which millions of dollars in bonuses . . . were based.”

The SEC officials directed Fannie to correct its financial statements back to 2001. Fannie has said that the correction could wipe out as much as $9 billion in previously reported profit.

Execs, including Clinton crony and deposed Fannie Mae head Franklin Raines, could be required to fork over some $18 million in bonuses reaped over three years.

Good.

Previous coverage and background:

Spanking Fannie Mae
Spanking Fannie Mae, contd.
The mother of all financial scandals
Fed up with Fannie and Freddie

Fannie Mae and Jesse Jackson

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