A new YouTube group, Taxpayers for Truth, has a good question to ask today. The Bush administration frog-marched executives from Enron, Tyco, and Worldcom into federal prison for their financial shenanigans, in collapses that look positively microscopic in the wake of the failure of Fannie Mae and Freddie Mac. Why hasn’t anyone in the recent failure received the same treatment?
Here is the roster presented by the video, in brief:
- Bernard Ebbers, Worldcom: 25 years in prison
- Ken Lay, Enron: Convicted on 10 counts, died before serving sentence
- Jeff Skilling, Enron: 24 years in prison
- Andrew Fastow, Enron: 10 years in prison
- Dennis Koslowski, Tyco: 8 years in prison
- Mark Schwartz, Tyco: 8 years in prison
So how about the officers of Fannie Mae, who conducted similar kinds of fraud in their financial statements in order to pad bonuses and keep regulators from discovering their precarious position until it was too late? Franklin Raines never faced criminal charges, and instead settled a civil suit with a $2 million payoff — which came from Fannie Mae’s insurance company. Jim Johnson didn’t even have to do that much.
And where are they now? The Washington Post reported twice that Raines was advising the Barack Obama campaign, although they denied it. Jim Johnson still advises the Obama campaign and had briefly led the search for a running mate. Supposedly the FBI has begun a criminal probe into the actions of Fannie Mae management over the years, but we’ll see if that proceeds.
The final quote at the end says it all.