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Originally Posted by 427 S/O
Quote; race42008
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If you are interested, read this article that outlines a lot of history relating to this subject - democrats and republicans were involved - but, it appears that democrats pushed the envelope......
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Politics and the Fannie Mae Piggy Bank
Franklin Raines, Jamie Gorelick, and some very cooked books.
By Byron York
Editor’s note — The impending federal bailout of Fannie Mae and Freddie Mac has shed light not only on the seriousness of current housing market conditions but also on the mismanagement and corruption that helped cripple the mortgage giants. Although political figures from both parties have profited mightily from Fannie Mae, it has been a particular favorite of former officials of Democratic administrations, as NR’s Byron York found out when he looked into the situation in the summer of 2006.
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.
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Even though his salary never topped $1 million, Raines’s total compensation shot from $6.48 million in 1998 to $8.52 million in 1999, to $13.89 million in 2000, to $18.86 million in 2001, to $18.20 million in 2002, to $24.15 million in 2003, all on the strength of EPS bonuses. Investigators found that of the $90.12 million Raines was paid in that six-year period, more than $52 million came from EPS bonuses.
Gorelick’s situation was similar. OFHEO found that she took home $26.46 million in the period from 1998 to 2002 (she left in that year, so she wasn’t there for the entire period under investigation). Of that figure, nearly $15 million came from EPS bonuses.
Of course, it wasn’t legit. “Fannie Mae reported extremely smooth profit growth and hit announced targets for earnings per share precisely each quarter,” the OFHEO report says. “Those achievements were illusions deliberately and systematically created by [Fannie Mae’s] senior management with the aid of inappropriate accounting and improper earnings management.”
In other words, they cooked the books.
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http://article.nationalreview.com/?q...Dg1Y2Q=&w=MQ==
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