One of the top ones to oust from the "party"....
Franklin Raines. This guy knows no shame.
A former Fannie Mae chief executive who was ousted two years ago in the mortgage giant's accounting scandal will receive $2.6 million from the company under a deal disclosed Tuesday that largely resolves a pay dispute.
...The government-sponsored company is reworking its accounting back to 2001 in the wake of the scandal that forced out Raines and former finance chief Timothy Howard, and brought a record $400 million civil fine in a settlement with federal regulators.
Raines, who had been in negotiations with Fannie Mae that led to bringing in an outside arbitrator, had maintained that he was owed more money under his employment contract. He left with a $19 million severance package in December 2004.
...Raines earned more than $90 million from 1998 to 2003, according to OFHEO's report -- including some $52 million in bonuses directly tied to the company hitting earnings targets. - AP
From
BusinessWeek:
On Labor Day, he was a favorite to be Treasury Secretary should John Kerry win the White House. At yearend, he had left under a cloud. The charmed career of Franklin D. Raines -- a poor kid from Seattle who climbed through Harvard and a Rhodes Scholarship to become White House budget director and CEO of Fannie Mae (FNM ) -- crashed to a halt on Dec. 21. That was six days after the Securities & Exchange Commission's top accountant declared that mortgage giant Fannie misstated earnings for 3 1/2 years, leading to an estimated $9 billion restatement that will wipe out 40% of profits from 2001 to mid-2004.
From the NYTimes:
Testifying two years ago about the debacle at Enron, Franklin D. Raines, the chairman and chief executive of Fannie Mae, told lawmakers that one of the biggest lessons he had learned was that it was unacceptable to hide behind claims of ignorance.
...According to the report issued last week by the Office of Federal Housing Enterprise Oversight, the bonuses awarded in 1998 after the accounting changes enabled Mr. Johnson to receive an additional $1.9 million and Mr. Raines an additional $1.1 million.
In the three years ended last December, Mr. Raines received a total of about $14 million in compensation and another $25.6 million in payouts under a long-term compensation incentive plan.
"It is wholly irresponsible and unacceptable for corporate leaders to say they did not know - or suggest it is not their duty to know - about the operations and activities of their company, particularly when it comes to risks that threaten the fundamental viability of their company,'' Mr. Raines told a House panel as it prepared landmark revisions to the nation's corporate laws.
Now Mr. Raines finds himself at the center of his own corporate crisis, precipitated by accusations that accounting irregularities were carried out at Fannie Mae on his watch.
From the Boston Globe:
Fannie Mae, the largest U S mortgage finance company, said it will spend $850 million this year to fix accounting errors and complete a $10.8 billion restatement.
...The SEC and Fannie Mae's regulator on May 23 fined the company $400 million after finding executives from 1998 until mid-2004 used "cookie jar" reserves and deferred expenses to smooth earnings and meet bonus targets.
Fannie Mae owns or guarantees about 20 percent of the $10.5 trillion U S home loan market. It is restating earnings because of errors in how it accounted for mortgage holdings and other derivatives. The Washington-based company plans to complete the restatement by the end of the year.
I thought Fannie Mae was about helping poor Americans try to finance their own homes...not line politico's pockets.