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Posted on 09/18/2008 6:17:41 PM PDT by mathprof
Franklin Raines
Franklin Delano Raines (born January 14, 1949 in Seattle, Washington) is the former chairman and chief executive officer of Fannie Mae who served as White House budget director under President Bill Clinton. He is currently employed by Barack Obama's Presidential Campaign as an economic adviser.
The son of a Seattle janitor [1], Raines graduated from Harvard University, Harvard Law School; and Magdalen College, Oxford University as a Rhodes Scholar. Raines was of age during the Vietnam War, but performed no military service. He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979. Then he joined Lazard Freres and Co., where he worked for 11 years and became a general partner. In 1991 he became Fannie's Mae's Vice Chairman, a post he left in 1996 in order to join the Clinton Administration as the Director of the U.S. Office of Management and Budget, where he served until 1998. 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]
A statement issued by Raines said of the consent order, "is consistent with my acceptance of accountability as the leader of Fannie Mae and with my strong denial of the allegations made against me by OFHEO."[4]
In a settlement with OFHEO and the Securities and Exchange Commission, Fannie paid a record $400 million civil fine. Fannie, which is the largest American financier and guarantor of home mortgages, also agreed to make changes in its corporate culture and accounting procedures and ways of managing risk. [8]
In June 2008 Wall Street Journal reported that Franklin Raines was one of several politicians who received below market rates loans at Countrywide Financial because the corporation considered the officeholders "FOA's"--"Friends of Angelo" (Countrywide Chief Executive Angelo Mozilo). He received loans for over $3 million while CEO of Fannie Mae. [5] Franklin Raines is currently one of Barack Obama's chief economic advisers.
lookie here!
Great find - who made the changes ???
Get this to the McCain Campaign & Fox News POST HASTE!!!
Excellent work!
I was looking at Obama’s wiki page today — no mention of the Global Poverty Act that he sponsored!
Any accusation is racist.
.....by "TALK".....
18:51, 17 September 2008 128.118.28.39 (Talk) (6,138 bytes) (Add Obama reference) (undo)
.....wonder who "TALK" is?.....
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Maybe someone working for the NYT? |
Corrected
From the Congressional Record, John McCain touting the FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005 — (Senate - May 25, 2006):
“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. 190, 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.”
http://thomas.loc.gov/cgi-bin/query/D?r109:16:./temp/~r109bH76BX::
A person named Copysan.
I made sure to leave him a note in his wiki user page.
THANK YOU!!!!!!!!
bttt
T.A.L.K = The Amazing Liberal Kook?
lol
Another example was the TUCC site -- drastically sanitized after Obama became a serious candidate.
Obama is such a LIAR!!
Ah, I did not know Raines was a gentleman of color. Not that it makes a lick of difference but surely we can expect the race card to slap down on the table at any moment. Let’s show that we are equal opportunity indicters and get him and the others in front of a grand jury. Can a citizen file the papers?
It’s moments like these that I am most proud to be a FReeper ;)
Nice work mathprof, everyone who loves this country owes you one.
Free Republic-Doing the job the Mainstream Media Refuses.
I referenced to this very entry on a local board last night to tie Raines to Obama.
Went back tonight, after I heard the denial, and ‘poof’...that one line was gone!
Thanks!
Interesting. I went back to September 11, and the final paragraph read:
“When Franklin Raines took over Fannie Mae in 1999, he set an objective of doubling earnings per share. This is not quite what Franklin Roosevelt had in mind when he founded it in 1938.
The two GSEs became increasingly aggressive, took unnecessary risks and ran close to – and, on occasion, beyond – their loose regulatory requirements. It can therefore be stated that Raines is implicitly responsible for the downfall of Fannie Mae.”
It was changed on September 14, 2008 apparently.
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