McCain, Obama connections to Fannie Mae

[Chris]

FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005
The United States Senate (May 25, 2006)
Senator John McCain, R-AZ

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 6 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.

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.

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

[Chris]

Jim Johnson to Help Barack Obama Find VP

Wasington insider James A. Johnson, known as Jim Johnson, will lead the selection process for Barack Obama's Vice President, according to the NYTimes and Associated Press.

Jim Johnson helped choose VPs for two other campaigns: John Kerry in 2004 and Walter Mondale in 1984.  Previously CEO of Fannie Mae, Jim Johnson has served on the boards of many prestigious organizations including the Brookings Institute and Kennedy Center for the Arts. 

Jim Johnson's professional career has included leadership at Princeton University, the US Senate, Lehman Brothers and teh Federal National Mortgage Association-- Fannie Mae. He was most recently Vice Chairman of private banking firm Perseus LLC. Jim Johnson's full biography lists his accomplishments and work in detail.

http://www.groundreport.com/Politics/Jim-Johnson-to-Help-Barack-Obama-Find-VP

[Chris]

On the Outside Now, Watching Fannie Falter

In the four years since he stepped down as Fannie Mae's chief executive under the shadow of a $6.3 billion accounting scandal, Franklin D. Raines has been quietly constructing a new life for himself. He has shaved eight points off his golf handicap, taken a corner office in Steve Case's D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters.

Raines settled charges brought by the Office of Federal Housing Enterprise Oversight by agreeing this spring to pay $2 million and forfeiting $22.7 million in stock and other benefits. And though none of it will come out of his pocket -- the payment was covered by insurance -- he has not emerged unscathed. He and his wife of more than 25 years, Wendy, are separated. Their house, a 1910 colonial in Northwest Washington, is for sale. An old friend, former Time Warner chairman Richard Parsons, describes him as being "in strong recovery mode."

In October 2003, even as Raines was invited to the Bush White House to receive a leadership award on behalf of Fannie Mae, investigators were about to look into the company's accounting books. A year later, Congress held a hearing on accounting irregularities at the company. By the end of 2004, Raines was forced out by the board, accused by regulators of overseeing accounting manipulations to bolster his compensation.

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/15/AR2008071502827.html

[Chris]

Feel free to add your own.  The Dems have had their fingers in the Fannie/Freddie pie for years.  They are far from innocent here.

[Wretched Excess]

you might wanna add bill clinton, and cite the changes made to the community reinvestment act in 1995 as they effected subprime mortgages.

[Chris]

NHSparky put a thread in the Political Ammo forum.  Maybe I put this in the wrong place.  I didn't want to jack his thread, but this is all related.

[Wretched Excess]

NHSparky put a thread in the Political Ammo forum.  Maybe I put this in the wrong place.  I didn't want to jack his thread, but this is all related.

looks like a perfectly acceptable place to me.

[Chris]

More Hope & Change... Obama Collected $105,849 From Freddie & Fannie

After having served less than 4 years in the US Senate and spending most of that time campaigning, Barack Obama was still able to collect $105,849 from mortgage giants Freddie Mac and Fannie Mae.

http://pfds.opensecrets.org/092408.html