On May 23, 2006, as a jury in Houston deliberated the case against top Enron executives Kenneth Lay and Jeffrey Skilling, a little-known regulatory agency in Washington, the Office of Federal Housing Enterprise Oversight (OFHEO), released a study with the dryly bureaucratic title “Report of the Special Examination of Fannie Mae.” The document received far less attention than the news from Enron, but its conclusions were stunning. In meticulous detail, it outlined a culture of corruption at the Federal National Mortgage Association — better known as Fannie Mae — that rivals the most serious corporate scandals in recent years. In this case, however, the main players are Washington insiders — some of them prominent veterans of the Clinton administration — and the scandal’s effects could ripple through Congress for years.
Fannie Mae is the biggest single source of money for mortgages in the United States. From 1998 to 2004, the years covered by the OFHEO investigation, it was headed by former Clinton budget director Franklin Raines, whose top management team included former Clinton Justice Department official Jamie Gorelick, sometimes mentioned as a future attorney general in a Democratic administration. During that period, the report says, Raines and his team grossly overstated Fannie Mae’s earnings — to the tune of $10.6 billion — for the purpose of paying themselves big bonuses. “By deliberately and intentionally manipulating accounting to hit earnings targets,” the report says, “senior management maximized the bonuses and other executive compensation they received, at the expense of shareholders.”
Democrat Party Corruption Bump
Franklin Raines AND Jamie Gorelick need to be in PRISON!
Jamie Gorelick and the wall of silence. How did they let this woman near the 9/11 commission?
President Bush proposed a new agency to oversee Fannie Mae and Freddie Mac to circumvent precisely this type of crisis. That was in 2003.
Senator McCain expressed his concern about the governing regulatory structure over Fannie and Freddie in 2006.
In 2004, a suit was filed on behalf of Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio and the Ohio Bureau of Workers' Compensation. Reason: Securities fraud.
Lastly, take a gander at the Fannie Mae/Freddie Mac campaign contribution list! The List covers 1989-2006, yet the #2 guy has not even been in the Senate four years!!!