Fannie Mae & Freddie Mac

Here are a few facts pertaining efforts to regulate Fannie Mae & Freddie Mac. The two giant mismanaged enterprises at the center of our economic and financial mess.

The following link will show the effort by the Bush administration in 2003 & John McCain and others in 2005 to address the the giant companies huge accounting irrelgularites:

http://sweetness-light.com/archive/bush-mccain-tried-to-reform-housing-finance

Also, from the congressional record bellow, is John McCain's speech on senate floor, in 2005 to try to pass regulation reform pertaining Fannie Mae & Freddie Mac:

Federal Housing Enterprise Regulatory Reform Act of 2005

The United States Senate May 25, 2006 Sen. John McCain [R-AZ]: 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.

Unfortunately, the bill ( 2nd attempt to regulate this mess) was blocked by Democrats and was never passed.

It's just worth noting that Fannie Mae and Freddie Mac gave contributions to lawmakers who are sitting on committees that "should" regulate them. Question is WHY???

A lot of those who received contributions from the two companies sit on the House Financial Services Committee, the Senate Banking, Housing & Urban Affairs Committee, or the Senate Finance Committee. Sen. Chris Dodd (D) of CT, chairman of the Senate banking committee, received the most from Fannie and Freddie's PACs ($133,900 since 1989). Rep. Paul Kanjorski (D-Pa.), who chairs several House Financial Services Subcommittees, received $65,500. It's also worth noting that Barak Obama came in second in contributions ( $126,349) while only serving four (4) years. Go figure….