Where is the White House outrage over bonuses at Fannie, Freddie?

posted at 2:45 pm on November 3, 2011 by Ed Morrissey

A nice catch from our friends at Investors Business Daily today paints a portrait at the selectiveness of class-warrior outrage in the Obama administration.  When AIG and other bailout recipients started to pay their remaining executives the bonuses for which they were contractually obligated, Barack Obama led a chorus of outrage against the private-sector firms:

Shortly after taking office, President Obama reacted to Wall Street bonuses handed out in January 2009 with incredibly harsh language, calling them “shameful” and “the height of irresponsibility.”

“Folks on Wall Street who are asking for help need to show some restraint and show some discipline and show some sense of responsibility,” he said. A few months later, Obama pledged that there would be “no more bonuses for companies that taxpayers are helping out,” calling them a violation of “our fundamental values.”

But by far the biggest recipient of bailout money are the two government-linked lenders Fannie Mae and Freddie Mac, which have paid millions in bonuses while the White House remains curiously silent:

Not only where they at the epicenter of the housing bubble, but also the government had to take them over, pumping in cash to cover their huge losses on the mortgages they owned and guaranteed. And far from paying taxpayers back, the best-case scenario for Fannie and Freddie is that their bailout will cost over $120 billion.

But that didn’t stop the two agencies from giving their top 10 executives $12.8 million in bonuses for meeting what have been charitably described as “modest goals.”

Why hasn’t the Obama administration erupted in similar shaking outrage over the bonuses at Fannie and Freddie?  You have to read this to believe it:

When asked about it on Tuesday, press secretary Jay Carney washed the administration’s hands of the matter. “These entities are independent and therefore they are independent decisions,” he said. “The White House is not involved, and nor should it be.”

Independent?  Are they kidding us?  Had they been independent, we likely wouldn’t have had the housing bubble in the first place.  These government-sponsored enterprises have never been independent, which is why they ended up with big bailouts that are, by the way, continuing to this day. AIG and other bailout recipients are paying the loans back, not demanding new funding.

Worse yet, Obama and the Democrats in Congress had the opportunity to make both Fannie and Freddie independent in their reform of financial-sector regulation, which became Dodd-Frank.  Despite their central role in the housing bubble and financial sector collapse — their mortgage-backed securities were literally the link between the two — Democrats refused to privatize both entities when they had full control of Congress and the White House.  Instead, they dumped tons of new regulation on Wall Street, where those MBSs got traded, rather than eliminate the government’s ability to manipulate the loan markets in the future in exactly the same way that led to the crisis in the first place.

Senator John Barasso has demanded that Obama take action to cancel the executive bonuses at Fannie and Freddie.  I hope he’s not holding his breath.

Update: And right on the heels of this, guess who’s coming for more gruel?

 Government-controlled mortgage giantFreddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.

Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.

This quarter’s $6 billion request from taxpayers is the largest since April 2010.

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Outrageously outrageless!

BobMbx on November 3, 2011 at 2:48 PM

Along with the Solyndra and other green energy companies, I’d like to see the donations from these executives for the past two election cycles and the current one.

rbj on November 3, 2011 at 2:49 PM

For some strange reason, FM bonuses paid to Jamie Gorelick in the past are most offensive to me.

a capella on November 3, 2011 at 2:51 PM

Shortly after taking office, President Obama reacted to Wall Street bonuses handed out in January 2009 with incredibly harsh language, calling them “shameful” and “the height of irresponsibility.”


And from your earlier article today Ed.

Senior executives at Solyndra collected hefty bonuses — ranging from $37,000 to $60,000 apiece — as the Fremont company bled cash and careened toward bankruptcy this summer.

CBP on November 3, 2011 at 2:52 PM

But by far the biggest recipient of bailout money are the two government-linked lenders Fannie Mae and Freddie Mac, which have paid millions in bonuses while the White House remains curiously silent

didn’t some guy named Raines or Johnson head one of those places? He happened to be a big buddy of BHO so, of course, WH ain’t gonna say a thing about their guy getting a big stash, but AIG OTOH…..damn

ted c on November 3, 2011 at 2:52 PM

When asked about it on Tuesday, press secretary Jay Carney washed the administration’s hands of the matter. “These entities are independent and therefore they are independent decisions,” he said. “The White House is not involved, and nor should it be.”

Unlike the companies that he did think should be vilified.

pathetic and shameless

Scrappy on November 3, 2011 at 2:54 PM

Why no WH outrage? A lot of that bonus money undoubtedly will find its way into the campaign coffers of the SCOAMF and the DNC.

TXUS on November 3, 2011 at 2:57 PM

I sure hope the folks that have the power to do something about this are keeping tabs. You hear me people? This next election ought to have the most consequences in a very very long time.

DanMan on November 3, 2011 at 2:58 PM

Who cares? Dancing With The Stars was awesome the other night!

jondun5 on November 3, 2011 at 2:58 PM

This is so unexpected!

LASue on November 3, 2011 at 2:58 PM

IF the GOP candidates had any sense, they’d harp on this and all of the other things about Barack and the democrats. The list is long and full.

SouthernGent on November 3, 2011 at 2:59 PM

You elect a Marxist president, and this is what happens.

faraway on November 3, 2011 at 2:59 PM

When will somebody stand up and call these people for what they are . . . dictatorial Marxists with an agenda to dismantle the Republic we once knew. Instead of bickering among themselves, this is what the GOP candidates should be talking about.

rplat on November 3, 2011 at 3:01 PM

This twerks me as much as anything about this sorry excuse for governance we now have. Any community bank president who displayed such blatant disregard for sound and ethical banking practices would be fired by shareholders, shut down by the FDIC and prosecuted criminally.

The devastation caused by the arrogance of Frank, Raines, Dodd, Gorelick, and of course Obama and his enablers, is absolutely breathtaking–on par with the lack of substantive media coverage (left, right, print, blog, broadcast, cable et al.).

It’s really very simple to communicate and understand financial scams, which in this case have brought the world’s best economy to its knees.

horatio on November 3, 2011 at 3:01 PM

Franklin Raines from wikipedia
http://en.wikipedia.org/wiki/Franklin_Raines

He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses.[5]

In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $90 million in payments made to Raines based on the overstated earnings,[6] initially estimated to be $9 billion but have been announced as 6.3 billion.[7]

Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused.[8] On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie’s insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options, which were valued at $15.6 million when issued. The stock options however had no value

Paul-Cincy on November 3, 2011 at 3:02 PM

How much of those ‘bonuses’ are in the WH pockets?

Charlatans run you.

Schadenfreude on November 3, 2011 at 3:04 PM

If you ever had the slightest doubt that Occupy X was about anything but Obama’s re-election, this is your sign.

faraway on November 3, 2011 at 3:05 PM

This is exhibit 2,746 why reconciliation with the left is impossible.

turfmann on November 3, 2011 at 3:05 PM

Democrats in 2004 telling us there was no problem with Fannie/Freddie.

Never Forget. Unless you’re bayam!

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

Del Dolemonte on November 3, 2011 at 3:08 PM

This is exhibit 2,746 why reconciliation with the left is impossible.

turfmann on November 3, 2011 at 3:05 PM

Because they don’t apply the same standards to themselves that they apply to others?

Paul-Cincy on November 3, 2011 at 3:08 PM

Johnson, Raines, Gorelick, and Rahm all got money from accounting fraud at Fannie/Freddie. Almost nobody cared then, and they all helped to elect our current president.

Remember when Karen Tumulty (Time/Journolist) started the charge that tying Raines to Obama was racist?

MayBee on November 3, 2011 at 3:12 PM

Along with the Solyndra and other green energy companies, I’d like to see the donations from these executives for the past two election cycles and the current one.

rbj on November 3, 2011 at 2:49 PM

I’m not sure you need to bother…

People like Rahm and Jamie Gorelick were on the boards of these sh!tholes and pulling down big bonuses during the W administration, so they were likely packed with other lefty favored sons who couldn’t get an official government position under Bambi for one reason or another.

teke184 on November 3, 2011 at 3:16 PM

But that didn’t stop the two agencies from giving their top 10 executives $12.8 million in bonuses

Jim Johnson, Jamie Gorelick, and Franklin Raines are not impressed by those paltry bonus numbers.

MNHawk on November 3, 2011 at 3:21 PM

IF the GOP candidates had any sense, they’d harp on this and all of the other things about Barack and the democrats. The list is long and full.

SouthernGent on November 3, 2011 at 2:59 PM

I’m sorry, I don’t see how they can work this into their busy schedule of shooting themselves in the foot and slandering each other.

Cindy Munford on November 3, 2011 at 3:25 PM

The Republican candidates won’t say anything about this because the CW of the Liberal popular culture industrial complex is that OWS anger at banks is justified, and the Tea Party is divisive.

Maybe Bloomberg will bring this up in order to get the freaks to leave Zucotti Park, because Jerry Nadler just realized that he cares more about getting himself re-elected than getting Obama re-elected.

ardenenoch on November 3, 2011 at 3:26 PM

Since Fannie/Freddie are dependent on the taxpayer, don’t their bonuses come out of our pockets? And how can you get a bonus and need another bailout, aren’t those things the very definition of irony?

Cindy Munford on November 3, 2011 at 3:27 PM

Forget the White House, where are Obama’s Whiney Sockpuppets?

Chip on November 3, 2011 at 3:29 PM

Too pig to fail.

Shy Guy on November 3, 2011 at 3:35 PM

“These entities are independent and therefore they are independent decisions,” he said. “The White House is not involved, and nor should it be.”

B U L L S H I T !

GarandFan on November 3, 2011 at 3:38 PM

Obama invokes God, but I’m pretty sure the one who REALLY wants Obama to succeed lives in a far hotter climate.

capejasmine on November 3, 2011 at 3:48 PM

once Barry gets in for a second term after clobbering Rino Romney, he will have 4 years to clean that mess up too…..

SDarchitect on November 3, 2011 at 3:49 PM

I’m outta ammo…

I mean what more will it take to get rid of the marxists, leftists liberals and fake do nothing conservatives….???

PatriotRider on November 3, 2011 at 3:51 PM

If they’re so “independent”, they won’t mind the government not backstopping their losses, will they?

Jay Carney is a Fool!

Another Drew on November 3, 2011 at 3:57 PM

When asked about it on Tuesday, press secretary Jay Carney washed the administration’s hands of the matter. “These entities are independent and therefore they are independent decisions,”

But aren’t Wall Street brokerages even more independent than Fannie and Freddie. And yest the SCOAMF complained about their bonuses. People actually voted for these clowns. I’m still amazed that anyone could have been that retarded.

WarEagle01 on November 3, 2011 at 4:06 PM

Can the Occupy Wall Street crowd interrupt their rape schedule and make a comment on these bonuses? Does this sparkle with them?

azkag on November 3, 2011 at 4:17 PM

FNMA and FHLMC had/have foundations, too (FNMA closed its in 2007, Freddie’s is still active), and those foundations spend money in Congressional Districts. The government has no idea how much, or where, or why, or to whom.

Just sayin’.

DrSteve on November 3, 2011 at 5:19 PM

How do you look at some struggling, hungry, hard working schmoe and tell him you need to raise his taxes so you can pay a million dollar bonus to a guy who just lost 6 billion in taxpayer money and is asking for more? How do you do that?

tommyboy on November 3, 2011 at 5:27 PM

Were we not all excited about this back in 2008? Wasn’t there massive outrage about Wall Street bonus payments? Didn’t we have this argument already? What’s changed since 2008? Wasn’t the news media all over this back when Bush was giving bail out money to the big banks while the top level executives were raking in the bonus checks?

Ah…wait….it’s coming to me…just give me a minute.

Skandia Recluse on November 3, 2011 at 6:02 PM

Ya, see, they teach this stuff at the university now :

When AIG‘s retention bonus plan became public in March 2009, President Obama vowed to pursue every single legal avenue to block the bonuses, and lawmakers backed a bill that would have taxed the payments to Financial Products‘ employees at 90%.

The New York Attorney General threatened to publicize the recipients‘ names, thus prompting executives at AIG FP to hastily agree to return about $45 million in bonuses by the end of 2009.

See? Obama has been fighting this since the very beginning…well, this was AIG…hhmmm…I’ll keep reading.. I know it’s in there somewhere. It has to be..

Skandia Recluse on November 3, 2011 at 6:10 PM

They are all busy running the Cain story.
500 mill plus is not important. its just taxpayers money.

ColdWarrior57 on November 3, 2011 at 8:01 PM

How about a little salt on the wound…

When last week we reported about the scandal of outgoing Freddie Mac CEO Ed Haldeman receiving at least $3.9 million as a reward for his two year tenure at the top of the insolvent and nationalized housing entity, we said: “As the chart below demonstrates, the total “draws” received under Haldeman’s tenure amounts to $14.5 billion. This excludes the Q3 number which will be made clear next week. Something tells us with this abrupt departure, the number may be higher to quite higher than expected.” As usual: when in doubt, be cynical, and be skeptical, and you will be right. Today, Freddie just reported that its Q3 draw, or required quarterly bailout amount from the Treasury, was $6 billion: the highest since Q1 2010, as a result of a massive loss of $4.4 billion. This means that during his tenure which ended just after the completin of Q3, Freddie has been “rewarded” with $20.5 billion in taxpayer capital merely to keep the zombie entity in operation! And for this, Ed gets $4 milliom. And this is why people in America are very, very pissed.

Courtesy of Zerohedge

Moses99 on November 3, 2011 at 8:07 PM

Who cares who cares, I heard from my cousin Remus that Hermain Cain offered his friends second twice removed sister 9.99 for a little anchovy on the side while he was at the NRA.

Africanus on November 3, 2011 at 11:07 PM