Fannie the Unreformable

'We all should have done a better job." So said Senator Chris Dodd yesterday in discussing Fannie Mae and Freddie Mac, in what ought to go down as the understatement of the young 21st century. Yet such general and less-than-abject remorse wasn't enough for Mr. Dodd and his fellow Democrats to vote to reform the money-losing government-owned companies and clean up the mess they made in the mortgage market.

As Banking Chairman, Mr. Dodd was declaiming on the Senate floor that the toxic twins absolutely, positively, no doubt about it, need to be reformed—just not yet. He thus opposed Arizona Senator John McCain's amendment to his financial regulatory-reform bill to shrink the mortgage giants, raise their underwriting and capital standards, cap the taxpayer losses (now $145 billion and counting) and eventually shut down the failed enterprises.

Fannie and Freddie will lose north of 500Billion before the final collapse, PLUS the interest payments to pay off that $500B.
That is going to come out to over $2000 per capita for the country, or $5000 per household.

Add in the trillions of dollars of mis allocated capital stolen from American families’ pockets to prop up the banking industry, and we’re looking at one of the largest failures of government in the history of mankind.

And Dodd, Frank, Gramm, GW Bush, and a host of others are directly responsible, and will be written in to the history books as the men and women who destroyed modern America.

30 years of stripmining the American middle class is coming to an end.

The Fannie Mae exec who cooked the books, brought down Wall Street, and walked away with $90 million.....plus.

Franklin Raines: was Chairman and CEO at Fannie Mae. Raines was forced to retire from his position when auditing discovered severe irregularities in Fannie Mae's accounting activities.

At the time of his departure The Wall Street Journal noted, " Raines, who long defended the company's accounting despite mounting evidence that it wasn't proper, issued a statement late Tuesday conceding that "mistakes were made" and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company's books ran afoul of generally accepted accounting principles for four years."

Fannie Mae had to reduce its surplus by $9 billion but Raines left with a golden parachute valued at $240 Million in benefits.

The Government filed suit against Raines when the depth of the accounting scandal became clear. http://housingdoom.com/2006/12/18/fannie-charges/

The Government noted, "The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner."

These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the mis-stated Fannie Mae profits.

(Did Raines ever return the money?) let

===========================================

Raines cooked the FM books creating losses of $9B (that we know of) to create bonuses for himself .......The SEC said Raines broke accounting rules by playing with risky derivatives.

Yet he walked away w/ $90 million dollars, a $26 million parachute PLUS a MONTHLY pension of $116,300 for life.

Raines owns options giving him $5.8 million in net profit after redeeming them, plus another $8.7 million in deferred compensation for his six years at the helm. Raines has already collected $4.87 million in special performance shares this year.

He keeps $5 million of paid-up life insurance. He and his spouse get free medical and dental benefits for life, worth over $1 million.

Raines earned $20 million in salary, bonuses and stock awards (that we know of) in one year.

After he was fired, Raines told the F/M board that he's entitled to get paychecks until next June 22 giving him another $600,000, which triggers a $2,000 monthly raise in his lifetime pension. He also says he's entitled to disputed options with a gross value of about $5.6 million.

To keep Raines happy within philanthropic circles, Fannie Mae will match Raines' charitable contributions by $10,000 a year.

Franklin Raines looted and pillaged Fannie Mae as Clinton's appointee.

Raines' looting career continues. Now he's a charter member of the Ohaha criminal enterprise......Climate Change, Inc. I guess this means the Clintons get a cut of the CCX scam. (/snix)

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.