MCCAIN STATEMENT ON CO-SPONSORSHIP OF THE FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005

John McCain | 5.30.06 | John McCain

[meandog]

Washington D.C. – Today, U.S. Senator John McCain (R-AZ) submitted for the record the following statement regarding his co-sponsorship of the Federal Housing Enterprise Regulatory Act of 2005:

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the six years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

Mr. President, the OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac – known as government sponsored entities or GSEs – and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

[meandog]

Fannie Mae and Freddie Mac: Two institutions of debt that cost America's taxpayers.

[cotton1706]

Sorry, no more reforms from Senator McCain.

[Wuli]

This is nothing new; the details of the scandal and the size of the errors have been known and analyzed for some time, only lately receiving political confirmation of those facts from a normally slow congressional response.

McPain today is doing no more than Bush's eleventh hour national guard mission to the border - trying to look like he's out ahead on things he, like the rest of Congress, has ignored and failed to dominate the public's attention on when it mattered - when the errors were occuring.

McPain will out-chase Schumer over the next 24 months, in the political ambulance chasing, pandering, grandstanding business.

Smoke and mirrors full of sound and fury signifying nothing.

[Eric in the Ozarks]

No kiddin.

[cotton1706]

I'm well aware of the problem. My point is that anything McCain comes up with will not be a solution and will more than likely make things worse.

[Knitting A Conundrum]

I tend to agree with you.

[sheana]

Mr. President, the OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

So McCain is listening to a report? Hey McCain what about the Heritage Foundation report of what the costs will be to taxpayers for your amnesty? What about the report from GAO saying the same but only extended out for 10 years?

McCain you are a pandering POC!