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  1. #1
    Senior Member avenger's Avatar
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    Congress Ignored Corruption at Fannie Mae and Freddie Mac

    New Documents Uncovered by Judicial Watch Show Congress Ignored Corruption at Fannie Mae and Freddie Mac for Years
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    Washington, DC -- April 2, 2009
    Congress Warned on Fannie and Freddie Misdeeds, yet Liberals in Congress Blocked Attempts to Rein in the Government Sponsored Enterprises
    Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that as part of its ongoing investigation of the government's role in the financial crisis it has uncovered new documents. The documents show that members of Congress for years were aware that Fannie Mae and Freddie Mac were playing fast and loose with accounting issues, risk assessment issues and executive compensation issues, even while liberals in Congress continued to block attempts to regulate the two Government Sponsored Enterprises (GSEs).

    Judicial Watch obtained the documents from the Federal Housing Finance Agency (FHFA) in response to a Freedom of Information Act (FOIA) request dated December 4, 2008. Judicial Watch requested records related to members of Congress activity regarding the policy of Fannie Mae and Freddie Mac to increase lending to individuals with poor credit risk, as well as correspondence and records about contacts between FHFA and Fannie and Freddie. Among the important documents:

    FHFA letter, dated March 26, 2007, from the director of the Office of Housing Enterprise Oversight (OHFEO), James B. Lockhart, to U.S. Senators Elizabeth Dole, Chuck Hagel, Mel Martinez and John Sununu: "This is a very serious issue. Freddie Mac's inadequate systems and controls make it a significant supervisory concern. Furthermore, its lack of timely public disclosures deny market participants the essential financial information made available by all other publicly traded companies so that investors may make informed judgments." The letter also mentions, "...Fannie Mae still has not filed financial statements for 2005 and 2006 and thus, they are not timely filers either."
    FHFA letter, dated December 3, 2004, to Congressman Barney Frank: "On November 15, 2004 Fannie Mae filed a Form 12b-25 with the Securities and Exchange Commission (SEC). Fannie Mae indicated that its external auditors could not complete their reviews of its financial statements and noted the possibility of up to a $9 billion loss dating back to 2001. As a result, OHFEO has determined it will not provide a monthly capital classification at this time."
    Letter dated June 16, 2006, from OHFEO Director Lockhart to Senator Chuck Hagel: "...In January 1999, Chairman and CEO Franklin Raines approved a recommendation made by the Chief Financial Officer (CFO) (Tom Howard) and the Controller (Leanne Spencer) to defer recognition of $200 million in amortization expense. This deferral, along with other accounting decisions made at that time relating to provisions for loan losses and the recognition of low-income housing tax credits, allowed management to meet the EPS threshold for maximum bonuses."
    Overall, these documents show that Congress was made aware of the massive problems at Fannie Mae and Freddie Mac over the last six years. Yet liberals, led by Congressman Barney Frank, repeatedly blocked attempts to rein in Fannie Mae and Freddie Mac.

    For example, during a hearing on September 10, 2003, before the House Committee on Financial Services considering a Bush administration proposal to further regulate Fannie and Freddie, Rep. Frank stated: "I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury."

    "These new documents show that liberals in Congress were reckless when it came to the massive taxpayer liabilities related to Fannie Mae and Fannie Mac," said Judicial Watch President Tom Fitton. "Government officials at FHFA repeatedly sounded the alarm regarding fraud, abuse and corruption at these two GSEs while liberals in Congress, led by Barney Frank, blocked attempts to address the situation in a meaningful way."

    All of the Documents Uncovered

    Documents regarding a specific case
    Documents from Feb 2003 - Dec 2003
    Documents from Mar 2004 - Dec 2004
    Documents from Feb 2005 - Apr 2005
    Documents from April 6, 2005 Congressional meeting
    Documents from Mar 2006 - Dec 2006
    Documents from Feb 2007 - Mar 2007
    Documents from Mar 2007 - Apr 2007
    Documents from Apr 2007 - Nov 2007
    Documents from Nov 2007 - Dec 2007
    Documents from Mar 2008 - Oct 2008
    Documents from Oct 2008 - Dec 2008

    http://www.judicialwatch.org/news/2009/ ... ie-mae-and
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    Senior Member vmonkey56's Avatar
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    Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)

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    Senior Member 4thHorseman's Avatar
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    "These new documents show that liberals in Congress were reckless when it came to the massive taxpayer liabilities related to Fannie Mae and Fannie Mac," said Judicial Watch President Tom Fitton. "Government officials at FHFA repeatedly sounded the alarm regarding fraud, abuse and corruption at these two GSEs while liberals in Congress, led by Barney Frank, blocked attempts to address the situation in a meaningful way."
    And yet, Wall Street, Financial Institutions, and Company CEO's get all the blame. I believe, that in the spirit of fairness, all members of Congress should have their bonuses (campaign funds) taxed at 90%.
    "We have met the enemy, and they is us." - POGO

  4. #4
    Senior Member oldguy's Avatar
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    In general those in power both government and large corporations have basically destroyed the middle class in America over the past 40 years, the real question becomes how do we change the system.
    I'm old with many opinions few solutions.

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