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By now, everyone is familiar with this:

We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out.

So let's aside the emotions here for a moment.  At one level the request appears quite reasonable: who would not want an investigation of Freddie Mac?

Maybe because there has already been one.

From CFO Magazine, 2003:

James R. Doty, the former SEC general counsel who investigated accounting failures at Freddie Mac, said Thursday that his investigation did not reveal "rampant, criminal misconduct" at the mortgage giant, according to Dow Jones.

"It is important at the outset to say what we did not find," Doty said in prepared remarks for a hearing of a House Energy and Commerce subcommittee examining Freddie Mac's accounting failures. "There was no indication that the company was creating fictitious profits. Nothing we have found calls into question the fundamental financial safety and soundness of the company."

"While we found misapplication of accounting principles, our investigation did not reveal rampant, criminal misconduct, misappropriation of corporate funds for personal gain or other types of intentional wrongdoing that have characterized recent scandals," Doty added

CFO Magazine noted in another article in 2003 that the SEC was looking into the possibility that fraud was committed.  From the article:

Securities and Exchange Commission Chairman William Donaldson said Tuesday that the regulatory agency is looking into whether fraud was committed at mortgage finance company Freddie Mac.

"If there is evidence of fraud…we would have a role there," Donaldson told the Senate Banking Committee, according to wire service reports. "We are looking at that right now."

The SEC investigation into Fraud was occurring at the same time that the Office of Federal Housing Enterprise Oversight was also investigating Fraud at Freddie Mac.

Now despite these investigations into Freddie, which occurred under a REPUBLICAN ADMINISTRATION, Rahm  was never charged with anything.

Remember: FDL is calling on Rahm to RESIGN.  The article says that Rahm is preventing "any investigation into his activities while on the board of Freddie Mac from 2000-2001".

This is surprising to say the least.  FDL seems to imply that there has never been any investigation into the accounting disasters in 2000-2002 when in fact by my count there have been at least 3.

There are other parts of the FDL article.  They claim that Rahm engineered the removal of the Inspector General to cover his tracks.  FDL has really nothing to offer here, since there have been multiple investigations into Freddie when Rahm was a director, and there have been subsequent investigations relating to events at Freddie after he left, and he has never been charged with anything.  

There are certainly problems with Freddie and Fannie, and the purpose of this diary is not to debate the oversight with which TARP funds have been distributed.  BUT FDL is essentially accusing Rahm of a crime, and the facts just don't support, in the view of this ex-Prosecutor, the allegation.

Typical thanks inserted for making the reclist inserted HERE
Merry XMAS and Happy Holidays! And to all a goodnight...

Originally posted to fladem on Thu Dec 24, 2009 at 12:24 PM PST.

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