Rudman Report on Fannie Mae and Freddie Mac in March 2006

So I was surfing around the internet and found this wonderful article on how this whole economic crisis stems from Fannie Mae and Freddie Mac which basically pulled the same bullshit that Enron pulled on it’s employees and investors. Here is an excerpt from the article:

The Rudman Report on Fannie Mae recites facts eerily similar to what we now know about Enron. According to the report, the CFO of Fannie misled the board (and possibly the CEO) about the financial position of the company. The CEO, head of the corporate governance committee of the powerful Business Roundtable, regularly misled Wall Street and the board, but may not have understood the accounting. The auditors (this time not Arthur Andersen) failed to stand up to the management or didn’t understand what was happening. The board, primarily made up of independent directors, and the audit committee, made up entirely of independent directors, were unable to penetrate the scam and remained clueless as earnings were manipulated. In Fannie’s case there was also a regulator, but the regulator did not begin to look into any problems until it had been surprised by similar wrongdoing at Fannie’s smaller sibling, Freddie Mac.

Now remember people, Freddie and Fannie spent $200 million on lobbying so our wonderful politicians just sat back and let this shit happen. Fannie Mae CEO Jim Johnson stepped down from his campaign post in June. His resignation came in the wake of charges that he collected more then $7 million in home loans at special, below-average rates. Johnson headed Fannie Mae from 1991 to 1998, leaving with a $21 million payout. Even after he left, Fannie continued to pay him an annual fee of at least $300,000 a year for consulting services and a $71,000 monthly pension. From 2001 to 2005, Fannie also paid for Johnson’s support staff, communications services and provided him a car and driver. Read the full story from American Enterprise Institute for Public Policy Research.

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