Skip to comments.Jamie Gorelick received $779,625 in improper bonus from Fannie Mae
Posted on 09/23/2004 3:31:49 PM PDT by Dems_R_Losers
Federal regulator OFHEO yesterday released a damning report on accounting irregularities at mortgage finance giant Fannie Mae. One critical finding was that in 1998, Fannie misstated expenses in order to meet earnings targets that triggered huge executive bonuses. The report states:
1998 Salary and Bonus of Senior Fannie Mae Executives
Officer Title Salary AIP Award/Bonus
James A. Johnson Chairman and CEO $966,000 $1,932,000
Franklin D. Raines Chairman and CEO Designate $526,154 $1,109,589
Lawrence M. Small President and COO $783,839 $1,108,259
Jamie Gorelick Vice-Chairman $567,000 $779,625
J. Timothy Howard EVP and CFO $395,000 $493,750
Robert J. Levin EVP, Housing and Comm. Develop. $395,000 $493,750
Keanu Reeves voice: "WHOAA..."
I forgot to add that the report says that had Fannie Mae followed proper acciunting procedures, there would have been no bonuses for anyone in 1998. They misstated income by over $125 million in order for these folks to get their bonuses. Jamie Gorelick was EVP and General Counsel while this was going on.
THATS GONNA LEAVE A MARK!!!!!!!!
Don't be dissin' Jamie - she's gonna be the new AG in a Kerry administration.
Worth a look
Damn! How can I get one of those jobs!
Ya know, I'm starting to wonder what the outcome of the MSM media will be now that it's been "Outed" that we FReepers are ALWAYS watching them. Their only hopes rode on the idea that if they say just a little bit about something now and then that nobody would be paying attention. Now that that illusion is shattered, what will be their avenue now?
Hide the news, perhaps?
And of course, Ms. Gorelick will face severe consequences for her actions, just as soon as Sandy Berger's case is over.
Hmmm. What else did they get?
THE FANNIE MAE & FREDDIE MAC RACKET
By Michelle Malkin. September 23, 2004
The Washington Post notes a new report slamming shoddy accounting practices at Fannie Mae, the behemoth, federally chartered mortgage finance company that receives a host of government benefits and exemptions from normal securities regulations:
Though it didn't quantify the effect of what it called pervasive misapplication of accounting rules on the company's books, the report by the Office of Federal Housing Enterprise Oversight cited one instance in 1998 where the company inappropriately deferred $200 million of estimated expenses, which enabled management to receive full annual bonuses. Had Fannie recorded the expenses in 1998, no bonus would have been paid, the report said.
The report also detailed numerous transactions over several years where it said Fannie Mae management intentionally smoothed out gyrations in its earnings to show investors it was a low-risk company. Fannie "maintained a corporate culture that emphasized stable earnings at the expense of accurate financial disclosures," regulators said in a letter to the company.
Chief executive Franklin D. Raines and the board of directors were not singled out for blame, but the report criticized "a culture and environment that made these problems possible." It did name J. Timothy Howard, the company's vice chairman and chief financial officer, saying he "failed to provide adequate oversight" of key control and reporting functions and had jobs in which he both set earnings targets and then the accounting policies that could be used to meet them.
The report said company management didn't adequately investigate allegations of irregularities by a former employee, Roger Barnes, who couldn't be reached for comment last night. It said his concerns were "substantive" and his cooperation with regulators important to their examination.
The findings echo those made last year about Freddie Mac, the other large government-chartered mortgage finance company. Regulators, who launched their Fannie Mae inquiry after the Freddie Mac problems came to light, found that Fannie failed to follow the rules in accounting for complex financial instruments known as derivatives, which the company uses to hedge against movements in interest rates. Much of rival Freddie Mac's accounting problems involved accounting for derivatives.
That probe resulted in a $125 million fine and a management shake-up at Freddie Mac.
The two companies were chartered by the government to provide a steady flow of funds for home mortgages. To do that, they borrow money from investors and buy mortgages from banks and other lenders. They also package mortgages into securities for sale to investors. Together they help finance half the home mortgages in the country.
The report's findings that Fannie lacks sufficient internal controls and that its accounting policymaking is "dysfunctional" added to the regulators' concern about the company's safety and soundness.
Federal Reserve Chairman Alan Greenspan and Treasury Secretary John W. Snow have called for tougher oversight of Fannie and Freddie because they worry that, given the huge scale of their operations, serious financial troubles at the companies could put nation's financial system at risk. Though the government disavows any responsibility for the companies' debts, public and private analysts say the government could be called upon to bail them out in a crunch....
My friends at CEI have been warning about such a nightmare scenario for years. Unfortunately, the mainstream press that puts Martha Stewart in the daily headlines has given short shrift to the Fannie/Freddie racket. Here's a bit of what I wrote about the problem last year:
Clothed in politically correct fashions ("Catch the dream," beckons Freddie Mac's program to boost minority home ownership; a "leader in diversity," brags a Fannie Mae press release), these public-private hybrids are two dangerous pigs feeding at the federal trough. Congress created Fannie Mae (nickname for the Federal National Mortgage Association) in 1938 to bolster home ownership during the Depression. Three decades later, it was partially privatized, but retained a host of government benefits. In 1970, Congress spawned Freddie Mac (nickname for the Federal Home Mortgage Corp.) to provide a lending competitor to Fannie Mae. Both entities expand the pool of money for home purchasers by snapping up loans that lenders make to homebuyers, and then converting those loans into relatively safe mortgage-backed securities that are attractive to investors.
So, what's wrong with this picture?
As Fred Smith, president of the Washington, D.C-based Competitive Enterprise Institute, has noted, these financial beasts are a textbook example of "profit-side capitalism and loss-side socialism." When things go right for Freddie Mac and Fannie Mae, they keep the profits. But when things go wrong, taxpayers -- not just private shareholders, managers, and employees -- will be on the hook.
Freddie Mac and Fannie Mae each receive $2.25 billion lines of credit with the U.S. Treasury. These special pipelines give the institutions an implied federal guarantee available to no other private sector competitors in the mortgage market. That protection makes them immune to the costs normally associated with riskier and riskier behavior. Moreover, Fannie Mae and Freddie Mac are not required to pay state and local income taxes. In addition, the standard for how much money the government requires them to keep on hand in case homebuyers default on their mortgages is lower for Freddie Mac and Fannie Mae than for fully private banks and thrifts. The two corporations receive an estimated $10 billion a year in hidden taxpayer subsidies.
Political appointees to the companies' boards pocket millions in stock options to bolster support on Capitol Hill. Clinton-appointed board members at Fannie Mae include Marc Rich lawyer Jack Quinn and Janet Reno's lieutenant at the Justice Department, Jamie Gorelick. At the helm of Fannie Mae is another Clinton appointee, Franklin Raines, who was paid more than $4 million and had almost $6 million in unexercised stock options in his first year at the helm. Cheerleaders in both major political parties have opposed privatizing Fannie and Freddie.
If Martha Stewart is the face of capitalist excess, Fannie Mae and Freddie Mac are the poster children for government-sponsored gluttony. The potential fall of Freddie Mac or Fannie Mae could rival the savings and loan collapse of the 1980s. Too bad the Martha bashers, blind to the far greater catastrophes of market socialism, won't pay attention until it's too late.
This has to be sent to Neal Cavuto at Fox News. This is so corrupt! And this scheming, conniving, unspeakable woman was on the 9/11 commission?
"WE also finally have our own copy of Gorelick's book "Destruction of Evidence"
and we will NEVER, NEVER, NEVER, be fired again by anyone."
On Aug. 22, 1996, just before the Democratic National Convention,
Ms. Gorelick oversaw a critical Justice Department meeting with the FBI.
mmediately after this meeting, as it happened,
all serious inquiry into the fate of TWA 800 came to an end.
"According to a 1998 Senate testimony of former CIA director James
Woolsey, powerful financier Khalid bin Mahfouz younger sister is
married to Osama bin Laden,. (US Senate, Senate Judiciary
Committee, Federal News Service, 3 Sept. 1998, See also Wayne
Madsen, Questionable Ties, In These Times,12 Nov. 2001 )
Bin Mahfouz is suspected to have funneled millions of dollars to the Al
Qaeda network.(See Tom Flocco, Scoop.co.nz 28 Aug. 2002)
Now, "by sheer coincidence", former New Jersey governor Thomas
Kean has business ties with bin Mahfouz and Al-Amoudi.
Thomas Kean is a director (and shareholder) of Amerada Hess
Corporation , which is involved in the Hess-Delta joint venture with
Delta Oil of Saudi Arabia (owned by the bin Mahfouz and Al-Amoudi
Now you would think that being a business partner of the brother in
law and alleged financier of "Enemy No. 1" would also be considered a
bona fide "conflict of interest", particularly when your mandate --as
part of the 9/11 Commission's work-- is to investigate "Enemy No. 1".
"(Michel Chossudovsky, New Chairman of 9/11 Commission had
business ties with Osama's Brother in Law,
Centre for Research on Globalization, December 2002 )
Bump for your excellent post.
I hope someone is preparing some invoices.
Well maybe with all that money she can go out and buy some self respect and a personality for good measure.
Like put a wall up to prevent properly protecting our nation from terrorist attacks to cover up the Chinese Military's bribery of the democrats and the Clintons.
Now I know.
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