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Obama Gave Fannie, Freddie Execs Millions

From the Center for Public Integrity’s iWatch News:

Obama’s Millions for Fannie, Freddie Execs. But Who’s Counting?

Obama administration approves $34 million in compensation without market analysis of executive pay

By John Solomon and Julie Vorman
Thu May 26, 2011

NEW YORK – The Obama administration’s approval of $34.4 million for six top officials, with little or no market guidance, is raising new questions about the inner workings of the failing mortgage giants. John Solomon and Julie Vorman, of the Center for Public Integrity’s iWatch News, report.

Over the last two years, the Obama administration has approved a whopping $34.4 million in compensation to the top six executives of the financially troubled Fannie Mae and Freddie Mac mortgage giants, and lacks the necessary protections to ensure such compensation is even warranted.

The largesse flowed to the six executives even though the two companies they run struggle to staunch billions of dollars in losses, remain in government conservatorship, and must compensate taxpayers for assuming the companies’ liabilities during the mortgage crisis. To compensate taxpayers, Fannie and Freddie are tapping Treasury Department funds to pay required 10 percent dividends each quarter to the U.S. government.

“The need for effectiveness, integrity, and transparency in [the Federal Housing Finance Agency’s] programs and operations cannot be overstated,” said Inspector General Steve Linick, a former Justice Department prosecutor confirmed by the Senate last year to watch over federal housing programs. “Fannie Mae and Freddie Mac have received almost $154 billion in taxpayer funding to support the still-fragile housing market. In addition, they own or guarantee about $5.4 trillion in residential mortgage obligations.”

Nitpicker. Still, this points up the difference between how things are run in the public sector compared to the private sector. If these Fannie and Freddie executives had run up this kind of track record for a private company they would have been cashiered instead of cashing in.

But in government incompetence seems to be rewarded most of all.

Linick said the [Federal Housing Finance Agency] rejected his recommendation that it test and independently verify the annual pay packages, which are set by the boards of Fannie and Freddie and approved by the agency in consultation with the Treasury Department…

The FHFA has defended executive pay at Fannie and Freddie in the past by saying the salaries were necessary to recruit and retain talented executives who can run big, complex companies

That’s funny. That’s the same thing Wall Street bankers say. And Mr. Obama and his news media claque mock them for it.

“Fannie and Freddie are government-sponsored enterprises, not government-sponsored enrichment programs. As long as they are backstopped by U.S. taxpayers, executives should be compensated on par with government officials. If these executives want to earn Wall Street paychecks, they should work on Wall Street,” Darrell Issa (R-CA), chairman of the House Oversight and Government Reform Committee, said in an email to iWatchNews…

Fannie Mae Chief Executive Michael J. Williams received a compensation package totaling $9.3 million in 2009 and 2010, according to a March report by the FHFA inspector general. That figure includes an annual salary around $900,000, a similar amount in long-term incentive awards each year, plus $2.9 million in annual deferred pay. All three types of compensation are paid in cash.

Fannie Mae’s chief financial officer, David M. Johnson, was paid $4.6 million in 2009 and 2010. The company’s general counsel, Timothy Mayopoulos, had a compensation package of $4.5 million for the two years, the inspector general said.

At Freddie Mac, Chief Executive Charles Haldeman had a two-year compensation package totaling $7.8 million in salary, incentive awards, and deferred pay. Freddie’s chief financial officer, Ross Kari, was paid $4 million and its general counsel, Robert Bostrom, took home $5.2 million, according to the inspector general

Fannie itself is still losing money, although losses have narrowed in recent quarters. But to pay the required dividends to the U.S. government, it must borrow additional money each quarter from the Treasury Department. For the first quarter of 2011, Fannie reported a net loss of $6.5 billion, and said it will have to pay about $10 billion in dividends this year to the U.S. government…

Freddie also said it “expects to request additional draws” from the Treasury Department in the future…

It’s weird. We’ve checked the New York Times and this report isn’t mentioned anywhere. In fact, it’s no where to be found in any of our mainstream media outlets.

Isn’t that odd? They are usually all over excessive compensation for executive stories like ducks on a June bug.

This article was posted by Steve on Friday, May 27th, 2011. Comments are currently closed.

7 Responses to “Obama Gave Fannie, Freddie Execs Millions”

  1. GetBackJack says:

    I’ve posted for years that most of the members of Congress are like Mafia Families and the Democratic Party is the Godfather pronuncia famiglia in control of the loose consortium of ‘familia mafioso’ that makes up Washington DC. More than one moderator informed me that this kind of characterization would be grounds for terminating posting privileges.

    I got kicked off Lucianne for just such a post.

    But dammit, I’m right.

    We’re pwned and controlled by political mafias.

    What really gets my goat, what makes me boiling mad is the numbers of my fellow American Citizens who willfully happily enforce obeisance, obedience and conformity to the Will of these mafias. Our police, the IRS, many and sundry Agencies, even unto our Military. They obey.

    They Obey Criminals.

    They Obey Criminals Who Pervert and Corrupt Our Constitution.

    And force us at the point of a gun to do likewise.

  2. Rusty Shackleford says:

    I’m no surgeon, but isn’t one of the things you want to do when pumping blood into a victim is to stop the bleeding at some point?

    Oh, sorry, what was I thinking? The article had the word “obama” in it. It makes sense now.

  3. BigOil says:

    Why wouldn’t the boy Marxist dole out big bonuses to Fannie and Freddie executives – they are doing a stellar job redistributing wealth.

  4. Airmail56 says:

    Can Congress PLEASE take away this jerkwads check book?

  5. Liberals Demise says:

    Freddie Fannie is Barney Fwanks personal “candy” store.

  6. eaglewingz08 says:

    If influential republicans were running these agencies rather than influential democrats, these same leaders would have been marched out in orange jumpsuits years ago and they would have been the subject of numerous lamestream media stories on their avaricious greed and incompetence. But there’s no double standard, no way.

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