WASHINGTON Dec 22, 2004 — Fannie Mae, the nation's second largest financial institution, forced out two top executives as it struggles to deal with an accounting scandal which will likely force it to wipe out $9 billion in profits over the past four years.
Fannie Mae chief executive Franklin Raines and J. Timothy Howard, the company's chief financial officer, stepped down Tuesday after lengthy negotiations between the Fannie Mae board and the company's chief government regulator, the Office of Federal Housing Enterprise Oversight.
In a statement issued late Tuesday night, Raines said he had decided to leave to fulfill a pledge he made during congressional testimony in October that he would take the blame if serious accounting problems were found at the company.
"By my early retirement, I have held myself accountable," Raines said.
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This is the culture that's been fostered under the Bush administration. The only reason this asshole is leaving is 'cause he opened his big mouth before Congress and his pledge is part of the public record. You can bet, if there was any room for him to weasel out of it, he would. Wonder if his pension or his severance was affected? Puh.
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A review by the Securities and Exchange Commission determined last week that Fannie Mae must restate earnings back to 2001 because it violated accounting rules for derivatives financial instruments used to hedge against interest-rate swings and for some prepaid loans.
That restatement of earnings is likely to wipe out $9 billion or about one-third of Fannie Mae's profits since 2001.
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The Enron/Bush mindset, cheat until you get caught, and then negotiate your way out. I wonder if there will be a country left when Bush's term is up. On many levels.