U.S. Covers Millions in Legal Fees for Ex-Freddie, Fannie Executives

January 25, 2011


Taxpayers have spent more than $160 million defending executives of Fannie Mae and Freddie Mac, infuriating lawmakers who want to know why taxpayers are footing the bill for heads of agencies that have already cost Americans at least $150 billion.

According to The New York Times, the bulk of those legal expenses — $132 million — went to pay for the defense of former top executives named in civil lawsuits accusing them of fraud and in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted.

Of the payments, $24 million went to defend former Fannie CEO Franklin Raines and two other executives.

Rep. Randy Neugebauer, R-Texas, chairman of the House Financial Services oversight subcommittee, told Fox News that he wants to know why the U.S. would defend executives who were fired from the lenders.

“The question I think that doesn’t pass the smell test is: why are we paying the legal fees for former employees?” Neugebauer asked. “What kind of litigation is pending that would cause us to think we need to continue to put taxpayers’ money in legal fees for people that actually got fired?”

Neugebauer said his committee wants to hold hearings on why the U.S. continued to pick up the tab for these defenses after the two lenders went into conservatorship.

The government took over Fannie and Freddie in 2008 after the housing bust that was, in part, attributed to disreputable accounting practices by the mortgage lenders, including years of inflated profit reports. In 2008, ex-Fannie chief Franklin Raines, who left the agency in 2004, personally paid back nearly $25 million in compensation after settling a lawsuit that claimed he had been improperly rewarded for the billions of dollars in profits that didn’t exist.

To read more: http://www.foxnews.com/politics/2011/01/24/covers-millions-legal-fees-ex-freddie-fannie-executives/#ixzz1C11DRmvh

1 Comment - what are your thoughts?

Leave a Reply

Your email address will not be published. Required fields are marked *

Keep the Fake News Media in check.

Don’t let the MSM censor your news as America becomes Great Again. Over 500,000 Americans receive our daily dose of life, liberty and pursuit of happiness along with Breaking News direct to their inbox—and you can too. Sign up to receive news and views from The 1776Coalition!

We know how important your privacy is and your information is SAFE with us. We’ll never sell
your email address and you can unsubscribe at any time directly from your inbox.
View our full privacy policy.