This week a new coalition of public policy groups has pressed a key congressional committee to open up the books on Fannie Mae and Freddie Mac and put an end to secretive policies which they claim are essentially robbing private investors. And the way the two lending giants are currently being managed will likely come as a shock to those who haven’t been paying attention.

A coalition of 17 conservative and free-market public policy groups sent a letter to the ranking members of the House Finance Services Oversight and Investigative Subcommittee urging them to demand more transparency and accountability regarding the “Third Amendment Sweep” of the six-year GSE conservatorship agreement from the U.S. Treasury.

The letter from the coalition coordinated by the Competitive Enterprise Institute is addressed to Republican Chairman Patrick McHenry and Democrat Ranking Member Al Green and can be read here.

The letter reflects growing awareness of the secrecy with which the federal government has responded to legal challenges to the seizure of private assets as part of the six-year conservatorship of the GSEs.

The thumbnail version of this rather complicated story is fairly basic. After the financial collapse of 2007 – 2008, Fannie Mae and Freddie Mac were essentially collapsing under the weight of all those bad mortgages. They wound up being bailed out, but needed investments from the private sector to move forward. The investors were assured that once the two entities became profitable again they would see a return on investment in the form of part of the profits. Well, the two GSEs turned the corner in 2012, but the ROI for the investors isn’t happening. The original deal would have seen 10% of the profits going to Treasury with some portion of the rest being available to pay back investors. But the amendment to the conservatorship referenced above results in all of the profits being swept up by the government. This means that are no effective profits left on the table, so nothing goes to the investors who helped bail them out.

When fighting a snake, they say you need to start at the head. In this case, that’s probably going to be the new boss of the FHFA, Mel Watt. His attitude towards transparency and the concerns of the investors was revealed during an interview in June.

“My responsibility in the conservatorship is not to the shareholders, really. So I don’t lay awake at night worrying about what’s fair to the shareholders,” Watt said in a recent interview on C-SPAN’s “Newsmakers”.

Perhaps this shouldn’t come as much of a surprise, given Watt’s background. Back when he was the Democrat representative from North Carolina’s 12th district, he was on the Domestic Monetary Policy and Technology subcommittee and attempted to completely gut legislation put forward by Rand Paul to audit the Fed. Additionally, Watt was investigated by the House Ethics Committee over fundraisers surrounding financial reform legislation. (Watt’s completely reasonable and rational response to the investigation was to try to slash funding for the ethics committee.)

So this is who we have minding the store at the FHFA while investors watch their potential returns vacuumed up by the Treasury Department, leaving them holding the bag. Let’s all put on our surprised faces now.