More Waste, Fraud & Abuse @ Fannie Mae (Surprised?)

The vast empty cavern between my two ears. | 3/5/09 | Me

[Renkluaf]

Jamie Gorelick has been a lightning rod for years and for very good reason. However, Ms. Gorelick’s tenure at Fannie Mae has been little scrutinized. Yes, we know she was there as the company was imploding under questionable accounting practices. However, what was she doing?

A quick look Fannie’s Proxy from 2002 (see page 24) raises some interesting questions. (Note: Fannie has announced that its SEC documents prior to 2003 are “unreliable.” As a result, they are no longer available on the company’s web-site and Edgar’s (SEC) documents appear to be gone as well with the exception of some old 13G filings. Not to be a conspiracy theorist but…?)

What’s interesting about this filing as shown in the table below is that Ms. Gorelick was being paid – quite handsomely I might add – to be Vice Chair of the Board of Directors. More importantly, she was being paid as if she were a senior executive of Fannie Mae but she was one with no operating responsibilities. Mr. Raines was Chairman of the Board and Chief Executive Officer. Mr. Mudd was Vice Chair and Chief Operating Office; but nothing for Ms. Gorelick. And her “duties” as defined in her employment agreement of 1997 state that she will “serve as Vice Chair-Designate and Vice Chair of the Board of the Corporation...” no more and no less.

	Sal+Bonus	LT Comp
2000	$1,486,598	$2,458,528
2001	$1,741,371	$2,791,087
2002	$1,601,957	$3,049,012

At the time of this filing, members of the Board received $32,000 annually as compensation. Apparently that wasn’t sufficient for the Democrat cabal that controls Fannie Mae. Ms. Gorelick looks to have been designated as an “employee” in a phantom position for the sole purpose of cashing in at the taxpayers expense. And we know she did so in more ways than one.

[Renkluaf]

What was it that the woman with the white hair used to scream on TV?

Stop the insanity!

[icwhatudo]

WIKI:

Even though she had no previous training nor experience in finance, Gorelick was appointed Vice Chairman of Federal National Mortgage Association (Fannie Mae) from 1997 to 2003. She served alongside former Clinton Administration official Franklin Raines.[2] During that period, Fannie Mae developed a $10 billion accounting scandal.[3]

On March 25, 2002, Business Week interviewed Gorelick about the health of Fannie Mae. Gorelick is quoted as saying, “We believe we are managed safely. We are very pleased that Moody’s gave us an A-minus in the area of bank financial strength — without a reference to the government in any way. Fannie Mae is among the handful of top-quality institutions.”[4] One year later, Government Regulators “accused Fannie Mae of improper accounting to the tune of $9 billion in unrecorded losses”.[5]

In an additional scandal concerning falsified financial transactions that helped the company meet earnings targets for 1998, a “manipulation” that triggered multimillion-dollar bonuses for top executives,[6] Gorelick received $779,625.

[icwhatudo]

One of Countrywide’s previously undisclosed customers at Fannie was Jamie Gorelick, an influential Democratic Party figure whose $960,000 mortgage refinancing in 2003 was handled through a program reserved for influential figures and friends of Countrywide’s chief executive at the time, Angelo Mozilo. Ms. Gorelick was Fannie Mae’s vice chairman at the time.

http://online.wsj.com/article/SB122230672551773977.html

[AuntB]

Not only that, but Fannie Mae gave millions in contributions to left wing outfits like LaRaza, Maldef, Rainbow coalition....has that stopped?? Not likely.

[Turret Gunner A20]

At the time of this filing, members of the Board received $32,000 annually as compensation. Apparently that wasn’t sufficient for the Democrat cabal that controls Fannie Mae. Ms. Gorelick looks to have been designated as an “employee” in a phantom position for the sole purpose of cashing in at the taxpayers expense.

And we know she did so in more ways than one.

[TASMANIANRED]

Needs to be a lot of prosecuting going on.

[LTCJ]

Ms. Gorelick looks to have been designated as an “employee” in a phantom position for the sole purpose of cashing in at the taxpayers expense.

Things like this seem to be so widespread that I'm not sure which is more likely for these slimeballs: prison, a noose at the hands of an angry mob, or a lifetime post in a full-fledged fascist state.

[mcshot]

These damned crooks just don’t go away. gorelick should have been deported for creating the “Wall” that resulted in the death of thousands of working Americans. I truly detest these people for their personal greed and lack of Patriotism.

[Timeout]

Hate to be dumb, but what is “L T Comp”?

[Renkluaf]

Long Term Compensation

[Timeout]

Yeah, I kind of figured that out. But what is it?

Stock options?
Deferred bonuses?
I presume it’s in ADDITION to current compensation?

I just wondered if anyone knew anymore about the $8+Million in that column. Did she actually receive that?

[Renkluaf]

Yes! Here's the description from the Proxy but the important point is that she appears to have been "given" wildly lucrative "executive" compensation but had no operating responsibilities. She was just another member of the board despite the "Vice Chair" title.

Variable Long-Term Incentive Awards. Variable long-term incentive awards are delivered in the form of stock options, and performance shares or restricted stock. All variable long-term incentive compensation programs are paid solely in Fannie Mae common stock, thereby reinforcing the shared interests of officers and shareholders. Officers at the senior vice president level and above receive half of the value of their annual variable long-term incentive award in the form of performance shares and half in the form of stock options.

Performance Shares. Performance shares are pay for performance incentive awards that compensate senior management for meeting performance objectives over a three-year period. Each year, the Committee establishes designated award periods (“cycles”) of three years. At the beginning of each cycle, at the Committee’s request, the Board establishes program targets based on both financial and non-financial goals. The financial goals currently are tied to growth in EPS and the non-financial goals are tied to Fannie Mae’s strategic plan. The Committee has established a scorecard to measure Fannie Mae’s achievement of the strategic plan in the following areas:

• leadership in increasing access to affordable housing;
• leading presence in the secondary mortgage market;
• optimal interest rate, credit, and policy risk management;
• development of a corporate culture to enhance strategy execution; and
• development of an e-commerce infrastructure to increase capabilities and lower costs.

The EPS goals and the strategic goals are given equal weighting (i.e., 50 percent each) in determining award payout. The Committee determines actual achievement against these goals at the conclusion of each cycle. An actual award payout can range from 40 percent of the performance shares granted for threshold achievement to 150 percent for goal achievement at maximum levels. No payment is made if achievement is below the pre-determined threshold. Fannie Mae exceeded the EPS growth goals established for the three-year performance share cycle that concluded in 2002. The Committee also determined that Fannie Mae met or exceeded each of the 2000-2002 performance share cycle’s strategic non-financial goals set forth above.

Stock Options. Stock Options link the interests of executives and shareholders by providing value to the executive only when the stock price increases over a number of years. Stock options vest over a four-year period at the rate of 25% per year and generally have a ten-year term. The number of stock options received by Fannie Mae executive officers is targeted, when combined with performance shares, to bring total compensation to the 65th percentile of the comparative market.