McCain Proposed Solutions to Fannie/Freddie Years Ago

GovTrack ^ | May 25, 2006 | John McCain

[Always Right]

FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005 (Bill pdf )

The United States Senate

May 25, 2006

Statement by John McCain

Sen. 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.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 1 90, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

---------------------------------------------------

New Agency Proposed to Oversee Freddie Mac and Fannie Mae - NY Times Sept 11, 2003

McCain - Federal Housing Enterprise Regulatory Reform Act of 2005 (Democrats blocked reform)

Sponsor:  Sen. Charles Hagel [R-NE]

Cosponsors [as of 2007-01-08]

Sen. Elizabeth Dole [R-NC]

Sen. John McCain [R-AZ]

Sen. John Sununu [R-NH]

[Always Right]

Where was Obama on this??? Democrats were busy blocking this. Democrats and Obama did nothing. Now Obama bitches after the Financial Markets collapses. McCain and Bush and the GOP were trying to fix these problems with Fannie and Freddie back in 2003, 2004, 2005, and 2006.

[mylife]

This cant be stressed enough!

[FlingWingFlyer]

Fannie and Freddie is a DemocRAT fiasco. For them to try to blame it on anyone else is criminal.

[Parley Baer]

This is good. Rush alluded to this today. I hope McCain puts this out so the msm will have trouble avoiding it.

[CatOwner]

Good detective work! Bookmarked!

[ari-freedom]

but but Obama said mccain doesn’t understand the economy and doesn’t get it!!!
We know Obama is an expert on the economy because he gave a speech about change and hope.

[Abbeville Conservative]

This is what’s pissing me off about the McCain camp. There is so much ammo they have to use and they’re choosing not to do it. They have come out with some really milk toast ads lately and the stump speeches never talk about things like this. I’m getting very depressed!!!! They need to punch, kick and destroy!!!!!

[mylife]

McCain is feeding Barama rope.

Let him keep yapping.

[Jaguarmike]

This needs to be McCain’s next commercial. The real candidate of reform proposed a solution - and the alleged party of reform blocked it.

[Jaguarmike]

Actually, McCain did bring this up in a network interview yesterday - along with the fact that Obama got a lot of money from Fannie Mae people.

[Doogle]

Where was Obama on this???

...well, two of the great swindlers of Fannie, Raines and Johnson (sp) are two financial advisers of "the 300" advisers Obambi has on his campaign staff

[ncfool]

Wow!

No wonder they gave money to Obama!

John McCain had already called them out.

This is big stuff. McCain today said that Bambi missed the vote on this as he was too busy on the road.

Not present is that like voting here?

[Abbeville Conservative]

But like you said, it needs to be in an ad for all to see and should be a part of this stump speech.

[mylife]

They ARE working the reform angle, and it is working.

They will give the knock out during the debates and afterward.

[Carley]

Can we keep this article at the top of the page thru tomorrow too please.

[mylife]

One thing you can say for McCain......He is a Fiscal Hawk

[RoadKingSE]

Fannie and Freddie is a DemocRAT fiasco. For them to try to blame it on anyone else is criminal.

And the disaster has the DNA signature of this dumbass all over it. He and the FannieMae multi-millionaires - Janet Reno's girlfriend Jamie Carpetlick and nObama's economic advisor Frank Raines, to name two - should all be frogmarched down to isolation cages at Gitmo.

[Doe Eyes]

The real candidate of reform proposed a solution - and the alleged party of reform blocked it.

Exactly, lets post the vote on the legislation they blocked.

[bamahead]

BTTT

[ari-freedom]

300 advisers? Obama is

[listenhillary]

From Wikipedia http://en.wikipedia.org/wiki/Franklin_Raines

In 1999, he returned to Fannie Mae as CEO, “the first black man to head a Fortune 500 company.”[1]

On December 21, 2004 Raines accepted what he called “early retirement” [2] from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses [3].

In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $50 million in payments made to Raines based on the overstated earnings [4] initially estimated to be $9 billion but have been announced as 6.3 billion.[2].

Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused.[5] On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie’s insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of “other benefits” said to be related to his pension and forgone bonuses.[6]

An editorial in The Wall Street Journal called it a “paltry settlement” which allowed Raines and the other two executives to “keep the bulk of their riches.” [7] In 2003 alone, Raines’s compensation was over $20 million.[3]

[Twinkie]

YES. Where was Obama on this? MCCAIN couldn’t have been more spot-on about this mess if he’d had a CRYSTAL BALL!
The Democrats were busy blocking McCain’s bill which was a prediction of exactly what has happened. (bless him and Elizabeth Dole & Sununu for trying at least)

Things have done nothing but slide into the toilet in earnest since the Nancy Pelosi nightmare began two years ago.

[Doogle]

*LOL*....wait and see if he’s elected

[Enchante]

Amazing — Republicans have tried to reform Fannie Mae and Freddie Mac for years, Bush admin. proposed overhaul in 2003, McCain called for major reforms in 2006, but Demagogues like Dodd have blocked every measure. Obama voted against in 2006.

This is a DemocRAT scandal and it must be hung around their greedy lying necks!!

[rivercat]

Here’s a couple of articles that (in addition to other stuff) talk about the repeal of the Glass-Steagall Act in 1999, and its impact on the housing market.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aDSFgf3DHR_A&refer=exclusive

http://www.prospect.org/cs/articles?article=the_bubble_economy

Here’s an article that talks about the oversight that the Bush Administration proposed in 2003.

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

I love the quote near the bottom by Rep. Barney Frank...

‘’These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,’’ said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘’The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’’

[Always Right]

Hannity is hitting this right now....finally getting some air time.

[Always Right]

‘’These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,’’ said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘’The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’’

Barney, the poster child for the Housing Crisis.

[uncbob]

Amazing — Republicans have tried to reform Fannie Mae and Freddie Mac for years, Bush admin. proposed overhaul in 2003, McCain called for major reforms in 2006, but Demagogues like Dodd have blocked every measure. Obama voted against in 2006. This is a DemocRAT scandal and it must be hung around their greedy lying necks!!

IF by some miracle this news starts to get out watch the MSM and the rat spin machine start with

"In this time of economic crisis the American public doesn't want finger pointing but bipartisan effort on solutions "

[tsowellfan]

I wonder if there’s a video of this somewhere online

[Chaguito]

"illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

Seriously, I need some help here...are these the guys who are heavily into Obama's campaign structure, or am I dreaming I heard it?

[ari-freedom]

and you know barney will still keep his seat

[listenhillary]

Barack tells Dirty Harry Reid to bugger off today when he asks for money to help the DNC for House and Senate races.

Pelosi announces an investigation today into the recent financial shenanigans knowing that Raines and Johnson are Barack’s dirty money men that could be smeared with by bringing up the dead from Fanny Mae and Freddy Mac.

Coincidence?

Will Barack throw them under the bus or will he cough up money to the Democrats?

[Pan_Yan]

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. ... and more recently, taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters.

Washington Post

Former Fannie Mae chief Franklin Raines and two other top executives have agreed to a $31.4 million settlement with the government announced today over their roles in a 2004 accounting scandal. ...

Raines, a Seattle native and prominent Washington figure who was President Clinton's budget director, is relinquishing company stock options, proceeds from stock sales and other benefits. His part of the settlement is worth $24.7 million

Seattle Times

[ncfool]

Ole Barney will have a Gay old time!

[ding_dong_daddy_from_dumas]

[uncbob]

Coincidence? Will Barack throw them under the bus or will he cough up money to the Democrats?

Interesting theory

[Blood of Tyrants]

A lot of money doesn’t describe it well enough. Only one other politician (Chris Dodd) got more money than Obama, yet Obama has been in the Senate only since 2005.

[FlyVet]

nObama's economic advisor Frank Raines,

What a friggin' disaster. Everything Obama touches is dirty.

Worse than Clintoon.

[revtown]

bump