Video: Fannie & Freddie execs made millions in bonuses the last two years

posted at 3:35 pm on April 4, 2011 by Ed Morrissey

If any organization should see a big restriction in executive compensation, it should be the government-seized, taxpayer-rescued Fannie Mae and Freddie Mac. Congress has expanded the bailout of the two GSEs at the heart of the global economic collapse a number of times, with the potential cost to the Treasury estimated as high as $363 billion dollars.  Recall, too, that the Obama administration created a “pay czar” to regulate executive compensation at private-sector banks that took TARP money to discourage excessive compensation.  As the Wall Street Journal reported last week, the White House seems to care less about that issue in the public sector:

A federal watchdog criticized federal regulators’ oversight of executive pay packages for top officials at Fannie Mae and Freddie Mac in a report published Thursday.

The top six executives at the mortgage giants earned $35 million in the last two years, according to the report from the inspector general of the Federal Housing Finance Agency, which regulates the mortgage giants.

The firms were taken over by the government in 2008 and have cost taxpayers $134 billion. Both firms have seen heavy turnover at the senior ranks.

Freddie Mac Chief Executive Charles E. Haldeman Jr. joined Freddie Mac in 2009, becoming the fourth person to head the company in a 12-month span. Michael Williams, a Fannie Mae veteran, took the top job at the company in 2009.

The report criticized the government for failing to independently verify whether the companies had adequately met certain performance-related compensation targets.

Republicans want the federal pay system imposed at Fannie and Freddie to cut compensation to its executives.  The Obama administration’s acting director of FHFA, the agency overseeing Fannie and Freddie, complained that this would make it more difficult to compete for talent:

Edward DeMarco, the acting director of the FHFA, warned Thursday that the “disruptiveness” of such a change could make it harder for the government to recover the value of its investments in the companies.

“The government has enormous exposure here on $5 trillion in mortgage securities,” he said. “I’d like to make sure we have qualified people managing that … on behalf of the taxpayer.”

Well, isn’t that true of the firms that fell under the control of the Pay Czar, as well?  At least in those cases, the continuing compensation resulted from private-sector revenues and not infusions of government cash.  The hypocrisy is rather stunning, and Rep. Thad McCotter pointed out on Fox News yesterday that the nation can’t afford to offer bonuses to GSEs that continue to suck cash out of taxpayer pockets:

Actually, pay czar Kenneth Feinberg approved these compensation packages, claiming that they met the “unique problems” of Fannie and Freddie at the time.  Losing money based on bad business decisions isn’t a “unique problem,” especially not for the federal government.  If the talent argument works for Fannie and Freddie, then it also works for the private sector — and Obama should never have inserted himself into the private-sector compensation process in the first place.  Now it looks as though the administration doesn’t want Congress to control compensation in the public sector.


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Edward DeMarco, the acting director of the FHFA, warned Thursday that the “disruptiveness” of such a change could make it harder for the government to recover the value of its investments in the companies.

Can’t let the ponzi scheme fall apart until we get our money out, right?
/

Count to 10 on April 4, 2011 at 3:39 PM

Please Privatize.

Oil Can on April 4, 2011 at 3:40 PM

“talent”????

Wethal on April 4, 2011 at 3:42 PM

“talent”????

Wethal on April 4, 2011 at 3:42 PM

I think he was being facetious.

Vince on April 4, 2011 at 3:43 PM

Is it me, or is anyone else pretty f-ing tired of getting bent over the back of the couch and told to stfu and pay our taxes or else, while the DC crowd lines their pockets with our money?

Midas on April 4, 2011 at 3:45 PM

“Obama is awesome.”

karl9000 on April 4, 2011 at 3:45 PM

can we organize a protest on their lawns and threaten their teenage children? Can we take bus tours of their houses? Where is Michael Moore on this one???

ted c on April 4, 2011 at 3:46 PM

crr6 claimed in another thread that Obama has been successful in financial reform.

Schadenfreude on April 4, 2011 at 3:48 PM

Midas on April 4, 2011 at 3:45 PM

It’s not just you.

AZCoyote on April 4, 2011 at 3:50 PM

Almost two years ago, on May 5, 2009,Michael Barone with great prescience wrote:

We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.

Chicago is not my kind of town—especially my kind of country.

INC on April 4, 2011 at 3:53 PM

“The Obama administration’s acting director of FHFA, the agency overseeing Fannie and Freddie, complained that this would make it more difficult to compete for talent…”

Jamie Gorelick was unavailable for comment…

Seven Percent Solution on April 4, 2011 at 3:55 PM

Wow, that’s awesome.

stenwin77 on April 4, 2011 at 3:55 PM

If I lose 134 billion, I can make 35 million?
Isn’t their an old marketing joke…two guys selling melon on the side of the road of their small pick up, they cost 2 dollars each so they are trying to sell them at 3 dollars each, but no takers, so they have to sell them, so they sell them a 2 for $3, and within minutes they sell out, with a line waiting for more. The one partner says maybe we should raise the price, but the other says, no we need to buy a bigger truck.
If you lower the price enough, anyone can be a “successful”…these guys aren’t businessmen, they just gave away money.

right2bright on April 4, 2011 at 3:56 PM

Another day another dollar…. for Obama’s croonies…

sandee on April 4, 2011 at 3:56 PM

The ideologically pure should not be subject to the same rules as the rest of us, we all know that progressives cannot be corrupted by money and hence deserve it!

clnurnberg on April 4, 2011 at 3:57 PM

Wow! Since when do tax payers owe billions to failing a company, and a country? Under achievers will be lining up in droves for this kind of money.

Oh, and btw…it’s not really a bonus is it? Wouldn’t it be more correctly defined as hush money? Don’t say a word about this, and don’t rat out Obama and cronies, and we’ll give you this nice cash lump sum. ;)

capejasmine on April 4, 2011 at 3:58 PM

Why is it that a ‘few’ get gobs of money at taxpayers expense and those of us who actually pay taxes get taken to the cleaner? I don’t know about y’all but I am really not looking forward to sending in our money come 4/15 for this type of cr@p!
L

letget on April 4, 2011 at 4:00 PM

Congressional Hearing in ’04 of extensive corruption at Fan/Fred. See the 6:25 minute mark for the money quote discovered by Auditor who found execs. cooking the books to make their bonuses.

What’s the point of these congressional hearings when these guys are still, not just walking the streets, but no charges filed against them.

http://www.youtube.com/watch?v=_MGT_cSi7Rs

SoldiersMom on April 4, 2011 at 4:12 PM

If they earn that kind of money at least they could have a 300 batting average.

docflash on April 4, 2011 at 4:15 PM

“The government has enormous exposure here on $5 trillion in mortgage securities,” he said. “I’d like to make sure we have qualified people managing that … on behalf of the taxpayer.”

Translation: Qualified people = high-level cronies. See how simple this is?

iurockhead on April 4, 2011 at 4:15 PM

Another day another dollar…. for Obama’s cronies…

sandee on April 4, 2011 at 3:56 PM

…and Bonny Fwank’s squeeze…

slickwillie2001 on April 4, 2011 at 4:18 PM

crr6 claimed in another thread that Obama has been successful in financial reform.

Schadenfreude on April 4, 2011 at 3:48 PM

Count it!

fossten on April 4, 2011 at 4:20 PM

“Fannie Mae and Freddie Mac should be abolished rather than reformed as part of the Obama administration’s planned overhaul of the government’s role in housing finance…”

Oh, wait…!

/

Seven Percent Solution on April 4, 2011 at 4:28 PM

Why can’t I get excited about their good fortune….. I just wrote a check to the IRS FAR FAR higher in proportion than is justified. While these pond scum reap millions. Why complain, NOTHING is ever done about it. We see these announcements daily from here and GM and others and so the FW… NOTHING ever happens. We vote in Republicans and conservatives across the board and what happens….NOTHING. Fannie and Freddie and other rotten in government businesses execs continue to take our tax money into their wallets. This is devastating and the sad part is NOTHING can or will be done about it. WTF

highninside on April 4, 2011 at 4:42 PM

Now this is interesting.
It seems the Obamas bought their Chicago house at 5046 S Greenwood Ave for $1,650,000, but the current Zestimate on zillow.com is $740,500.

Woof. A blind man can invest better.

J_Crater on April 4, 2011 at 4:55 PM

How’s that financial reform working out for you, crr6?

Oooooo….

catmman on April 4, 2011 at 5:11 PM

Is it me, or is anyone else pretty f-ing tired of getting bent over the back of the couch and told to stfu and pay our taxes or else, while the DC crowd lines their pockets with our money?

Midas on April 4, 2011 at 3:45 PM

thread winner

lees on April 4, 2011 at 5:21 PM

The GOP ought to repeat this ceaselessly:
Since we’re all angry at govt corruption, inefficiency, & overspending, vote for folks who will work to make govt smaller!
This & only this will reduce the govt corruption, inefficiency, & overspending.

itsnotaboutme on April 4, 2011 at 5:21 PM

Just another example of Barry talking out of both sides of his mouth.

GarandFan on April 4, 2011 at 5:29 PM

These clowns were trying to run the agencies and lost money and they get bonuses. I don’t have anything to do with them so as a result of what I did, they did not lose money, so I contributed more to their well being and I didn’t get a bonus. Go figure..
I promise to keep hands off, wish others would also..

Redteam on April 4, 2011 at 5:32 PM

J Crater, you don’t believe for one second that ‘the won’ actually paid that 1.6 mil, do you?

and just where did you get that info? ain’t ALL of ‘the won’s’ personal records ‘sealed’? Isn’t that deed in the same vault as his birth certificate? along with all his student records at Columbia. I heard he actually drove by Columbia once many years ago. (I think that info was supposed to be sealed also)

Redteam on April 4, 2011 at 5:38 PM

Elect me king and I’ll fix it. They are rich and since the rich don’t pay enough taxes I raise their tax rate to 233%.

BruceB on April 4, 2011 at 6:06 PM

Drag those overpaid execs through cactus…

Khun Joe on April 4, 2011 at 6:13 PM

Confiscate every asset these bottom-feeding slobs claim to “own”, ship their sorry asses off to Gitmo and have them judged by a military tribunal before locking them away for the rest of their pathetic lives.

bannedbyhuffpo on April 4, 2011 at 6:25 PM

Raines stole fifty million for his absent stewardship

kept it all

Sonosam on April 5, 2011 at 1:21 AM