Three Democrats with close ties to Obama who served as Fannie Mae executives:
Franklin Raines, former Clinton administration budget director; James Johnson,
former aide to Democratic Vice President Walter Mondale; and Jamie Gorelick,
former Clinton administration deputy attorney general.
All three Obama-related executives earned millions in compensation from Fannie
Mae.
Johnson earned $21 million in just serving as Fannie Mae CEO from 1991 to 1998;
Raines earned $90 million in his five years as Fannie Mae CEO, from 1999 to
2004; and Gorelick earned an estimated $26 million serving as vice chair of
Fannie Mae from 1998 to 2003
All three have been involved in mortgage-related financial scandals.
In 1998, according to the Washington Post, Gorelick, as Fannie Mae vice
chairman, received a bonus of $779,625, despite a scandal in which employees
falsified signatures on accounting transactions to manipulate books to meet
1998 earning targets. The moves, in turn, triggered multi-million-dollar
bonuses for top executives.
Gorelick was embroiled in another controversy over an alleged conflict of
interest when a 1995 memo she authored as deputy attorney general surfaced
while she was a member of the 9/11 commission.
The memo, which became known as the "Gorelick Wall," appeared to establish
barriers that barred federal anti-terrorist criminal investigators from
accessing various federal records and databases that may have assisted them in
their criminal investigations.
According to the Associated Press, Raines and several other Fannie Mae top
executives were ordered in a civil lawsuit to pay nearly $31.4 million for
manipulating Fannie Mae earnings over a period of six years to trigger their
massive bonuses.
Raines was also forced in the settlement to give up Fannie Mae stock options
valued at $15.6 million.
Last year, the Securities and Exchange Commission alleged Freddie Mac had
engaged in accounting fraud from 2000 to 2002, imposing a $50 million fine on
the company and on four executives fines for amounts ranging from $65,000 to
$250,000.
Raines currently advises Obama on housing policy.
Johnson was appointed to head Obama's vice presidential selection committee,
until a controversy concerning an alleged $7 millions in questionable real
estate loans he received on favorable terms from failed sub-prime mortgage
lender Countrywide Financial surfaced and forced him to step down.
The decision by the U.S. Treasury to take over Freddie Mac and Fannie Mae could
end up costing the U.S. taxpayer as much as $100 billion, although the extent
of losses at the two giant mortgage companies remains to be determined.
According to the Wall Street Journal, Freddie and Fannie own or guarantee about
$5.2 trillion worth of mortgages.
The riskiest loans held by Freddie and Fannie are known as "Alt-A" and
sub-prime mortgages, worth about $780 billion, or about 15 percent of the total
portfolio.
The federal government takeover of Freddie and Fannie passes to U.S. taxpayers
the contingent liability for failures in the entire $5.2 trillion loan
portfolio held by the two mortgage giants.
Over the past four quarters, Freddie and Fannie have suffered losses of about
$14 billion, as the mortgage market has been hit by a wave of defaults and
foreclosures not seen in the U.S. since the 1930s.
Obama has these connections with Fannie Mae and Freddie Mac. Jim Johnson and
former Fannie Mae chairman and CEO Franklin Raines are part of Obama’s
advisors. Franklin Raines stepped down after a $6.3 billion accounting scandal,
which Obama’s calls on for advice on mortgage and housing policy matters. Jim
Johnson was on Obama’s VP search and made millions from his Fannie Mae CEO job.
Obama hired these people who were a big part of the team that brought down
Fannie Mae to be on his campaign.
How come Obama has not fired these people yet? How can we trust Obama to help
our economy when he hangs around people that would bring America and our
economy down?
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