Obama: Former Fannie Mae CEO Franklin Raines Advising Obama on Housing Policy

[tocco05]

So who’s advising Obama on housing policy these days?
Former Fannie Mae CEO Franklin Raines, that’s who.
Raines is one of the people principally responsible for the collapse of the giant and had been accused of manipulating the company’s earnings. Also, according to an Associated Press article, Raines received low-rate loans from mortgage lender Countrywide Financial, a major seller of home loans to Fannie Mae. This from the July 16th edition of The Washington Post:

In the four years since he stepped down as Fannie Mae’s chief executive under the shadow of a $6.3 billion accounting scandal, Franklin D. Raines has been quietly constructing a new life for himself. He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.
​

Glad to see Obama is surrounding himself with the crème de la crème of the business world when it comes to advice on mortgage and housing policy matters. Could there be a cabinet position in Raines’ future?
Or is he the next victim to go under the wheels of the Obama express?

 

[tocco05]

Franklin Raines to pay $24.7 million to settle Fannie Mae lawsuit
By MARCY GORDON

The Associated Press

WASHINGTON — Former Fannie Mae chief Franklin Raines and two other top executives have agreed to a $31.4 million settlement with the government announced today over their roles in a 2004 accounting scandal.

Raines, former Fannie chief financial officer Timothy Howard and former controller Leanne Spencer were accused in a civil lawsuit in December 2006 with manipulating earnings over a six-year period at the company, the largest U.S. financer and guarantor of home mortgages.

Raines, a Seattle native and prominent Washington figure who was President Clinton's budget director, is relinquishing company stock options, proceeds from stock sales and other benefits. His part of the settlement is worth $24.7 million,

The stock options were valued at $15.6 million at the time they were issued to Raines, allowing him to buy shares at $77.10 and higher. Fannie Mae shares have been battered by the turbulence in the housing market — making the options that Raines was returning of negligible value, people familiar with the settlement said. They spoke on condition of anonymity because they did not publicly wish to criticize the accord.

Proceeds from Raines' sale of his company stock, valued at $1.8 million, will be donated to programs that help homeowners facing foreclosure or other initiatives designed to boost homeownership. For Howard, stock sale proceeds of $200,000 will go to such programs.

"While I long ago accepted managerial accountability for any errors committed by subordinates while I was CEO, it is a very different matter to suggest that I was legally culpable in any way," Raines said in a statement. "I was not. This settlement is not an acknowledgment of wrongdoing on my part, because I did not break any laws or rules while leading Fannie Mae. At most, this is an agreement to disagree."

Howard is settling for a total $6.4 million, including stock options valued at $5.2 million when issued, and Spencer $275,000.

The deal was announced by the Office of Federal Housing Enterprise Oversight (OFHEO), the agency that oversees Fannie Mae and Freddie Mac, the two big government-sponsored mortgage finance companies.

"OFHEO's mission is to ensure that (Fannie and Freddie) operate in a safe and sound manner," the agency's director, James Lockhart, said in a statement. "That cannot occur without corporate management providing prudent and responsible leadership and setting the appropriate ethical and overall 'tone at the top'."

Fannie and Freddie both had multibillion-dollar accounting scandals that stunned Wall Street and brought record civil fines against them in settlements with the government.

The amounts that Raines, Howard and Spencer are paying under the settlement are far less than what the government was seeking when it sued them in December 2006. OFHEO sought fines of around $100 million against the three and restitution totaling more than $115 million in bonus money tied to an improper accounting scheme.

The regulators alleged an accounting fraud at Washington-based Fannie Mae that included manipulations to reach quarterly earnings targets so that Raines, Howard, Spencer and other company executives could pocket hundreds of millions in bonuses from 1998 to 2004.





The three executives had disputed the charges and pegged them as politically motivated. Raines' attorney called Lockhart "a fatally biased regulator" and asked a federal appeals court to remove him from the case.

Spencer "was recognized as an outstanding controller for Fannie Mae where she conducted her duties with the highest integrity," her attorney, David Krakoff, said in a statement. "Ms. Spencer maintained throughout this action that the OFHEO reports and allegations had no merit."

Raines and Howard were swept out of office in December 2004 in the accounting fiasco at Fannie Mae. Two years later, the company announced a restatement for 2001 through June 30, 2004, that erased $6.3 billion in previously reported profit.

Raines' total compensation from 1998 through 2004 was $91.1 million, including some $52.6 million in bonuses, according to OFHEO. Howard earned $30.8 million during the period, including $16.8 million in bonuses; Spencer received $7.3 million, of which some $3.5 million was bonus money.

Fannie Mae paid a record $400 million civil fine in a settlement with OFHEO and the Securities and Exchange Commission in May 2006. It also agreed to make top-to-bottom changes in its corporate culture, accounting procedures and ways of managing risk.

Last November, Freddie Mac's former chief executive, Leland Brendsel, agreed in a settlement with OFHEO to pay $2.5 million in fines to the government, give back $10.5 million in salary and bonuses to the company and waive claims against the company for compensation worth $3.4 million.

Freddie's accounting scandal erupted in June 2003 when the McLean, Va.-based company said it had misstated earnings by $5 billion between 2000 and 2002 — artificially inflating results in some periods, while reducing them in others.

Raines, the first black CEO of a Fortune 500 company, has been trying to restore his reputation and challenge shareholder suits. Raised in a Seattle family that relied on welfare checks, Raines broke through racial barriers to become an adviser to President Carter and head of the U.S. Office of Management and Budget from 1996 to 1998 under Clinton.

Raines said in court filings that the White House spread rumors to undermine Fannie Mae's share price and persuaded OFHEO to condemn the company.

Fannie Mae paid a record $400 million civil fine in a settlement with OFHEO and the Securities and Exchange Commission. It also agreed to make top-to-bottom changes in its corporate culture, accounting procedures and ways of managing risk.

 

[tocco05]

Franklin Raines’ Criminal Enterprise and Barack Obama, His Accomplice **UPDATE** Top Recipients By $/Yr in Congress

<!-- sphereit start -->**TOP OF PAGE UPDATE**
This is an eye-opener. I’ve simply added Years in Congress and divided total Fraudie
Mae and Fraudie Mac donations by that number to rank the top 15 recipients by $ per Year. Obama is winner by a ton:
Download Spreadsheet Click Here


As an executive at Fannie Mae, Franklin Raines illegally coerced his employees to falsify accounting facts so he’d get a maximum bonus. The government-backed firm used Enron-like fraud, in part at Raines’s orders, to create the largest bail-out in US history. Raines had the whistleblower fired. From the Heritage Foundation:

In 2004, after a tip from a whistle blower who was later fired, the Office of Federal Housing Enterprise Oversight (Ofheo) issued a report finding that the government-sponsored entity Fannie Mae had engaged in Enron-like accounting machinations that allowed Fannie to overstate its earnings and underestimate the risk the company faced. The accounting wizardry Fannie engaged in was designed so that Fannie could meet profit targets tomaximize bonus payments to company executives like Clinton administration deputy attorney general Jamie Gorelick and Carter administration assistant director for domestic policy Franklin Raines.
​

From the ACU:

Following his tenure in Democrat Bill Clinton’s White House as Budget Director, Raines returned to Fannie Mae where he served as Chairman and Chief Executive Officer prior to being forced out over accounting fraud allegations that federal authorities claimed were used to pad his own pocket with tens of millions of dollars in un-earned bonuses on top of his multi-million dollar pay. Raines and other top executives drew multi-million dollar salaries at Fannie Mae for many years.
Although he claimed no wrong doing, Raines agreed to settle the suit with the federal government just this year and agreed to pay back a few million of the near $50 million it had been alleged he obtained illegally through bonuses not due from Fannie Mae.
​

Now, this criminal is Barack Obama’s campaign adviser. Only one member of Congress, Barney Frank, Chris Dodd, received more kickbacks from Raines’s Fannie Mae cronies than did Barack Obama–over $120,000 in bribes.
Campaign Contributions, 1989-2008 (source)
<TABLE cellSpacing=0 cellPadding=0 width=537 border=0><TBODY><TR align=middle><TD>Name </TD><TD width=40>Office </TD><TD width=45>State </TD><TD width=39>Party </TD><TD width=75>Grand Total </TD><TD width=75>Total from
PACs </TD><TD width=88>Total from
Individuals </TD></TR><TR><TD>Dodd, Christopher J</TD><TD align=middle width=40>S</TD><TD align=middle width=45>CT</TD><TD align=middle width=39>D</TD><TD align=right width=75>$165,400</TD><TD align=right width=75>$48,500</TD><TD align=right width=88>$116,900</TD></TR><TR><TD>Obama, Barack </TD><TD align=middle width=40>S </TD><TD align=middle width=45>IL </TD><TD align=middle width=39>D </TD><TD align=right width=75>$126,349 </TD><TD align=right width=75>$6,000 </TD><TD align=right width=88>$120,349</TD></TR></TBODY></TABLE>
Dodd has been in Congress since Moses was a baby. What did Obama do in 2.5 years to earn nearly as much cash from Frannie and Freddie as Dodd earned in 25?
Remember Countrywide? According to BusinessWeek Obama’s financial adviser, Raines, was responsible for its demise, too:

The Countrywide project deemed, “friends of Angelo” or FoA, standing for Friends of Countrywide Chief Executive Angelo Mozilo, apparently provided special loan rates for connected officials. These included Raines, James Johnson (a Democratic party activist and adviser to Sen. Barack Obama who was named to a panel to help choose Obama’s Vice Presidential running mate), Democrat Chairman of the Senate Banking Committee, Senator Christopher Dodd, and the chairman of the Senate Budget Committee, Democrat Kent Conrad.
​

Fannie Mae and Freddie Mac control almost 50 percent of all mortgages in the United States. They were started by Democrats, protected by Democrat, funded by Democrats, and absorbed into the government proper at the behest of their paid hacks in the Democrat party. Conservatives have advocated the demolition of these twin towers of corruption, fraud, and bribery for decades. But Democrats blocked every attempt to even hold hearings on corruption in Fannie Mae and Freddie Mac.
But where are the Congressional hearings? Where is the Department of Justice? Why aren’t Raines, Johnson, and Obama doing a perp walk on the evening news?
Because liberals OWN Washington. Obama will threaten, lie, and kill if he must to keep his sham campaign going. At this point, he must win to stay of prison.
I cannot believe that conservative bloggers and talk show hosts are staying away from this story. This should be the end of Barack Obama, particularly after today’s disaster on Wall Street: Dow down >500, Lehman Brothers GONE, Bear Stearns GONE, Merrill Lynch GONE, Fannie Mae GONE, Freddie Mac GONE, AIG GOING, more to follow.
Lehman Brothers, too, contributed the lion’s share of its political donations to DEMOCRATS. Why don’t you people rise up and demand some goddamn ACCOUNTABILITY! This isn’t some little $10 million Chrysler bailout here. We’re talking BILLIONS of STOLEN MONEY. Stolen by Democrats, for Democrats.
We could face an economic DEPRESSION because of Obama, Dodd, Biden, Frank, Pelosi, Kennedy, and the rest of the Democrat criminals who’ve destroyed the housing market, put families on the streets, and wrecked Wall Street through greed and avarice on a scale unseen since the Roman Empire!

Fannie also bought off activist groups such as the corrupt Association of Community Organizations for Reform Now (ACORN), which has been indicted, multiple times across the country, for vote fraud (Obama worked closely with ACORN as a street organizer in Chicago). Fannie’s lobbying efforts paid off as liberal politicians such as Sen. Chuck Schumer (D-N.Y.) and Rep. William Clay (D-Mo.) worked to kill any real reform of Freddie and Fannie. The Washington Post reports: “In an internal memo in 2004, Fannie Mae executive Daniel H. Mudd affirmed what the company’s critics had long contended: In the political arena, ‘we always won’ and ‘we took no prisoners.’”
​

WAKE UP AND TAKE IT BACK! It’s YOUR MONEY.
I’ll say it again without any fear of error: Franklin Raines is a criminal and Barack Obama is his paid accomplice. Prove me wrong.

 

[tocco05]

ELECTION 2008
<!-- end standing head --><!-- head -->[FONT=Palatino, Georgia, Times New Roman, Times, serif][SIZE=+2]Fannie Mae, Freddie Mac execs now offering advice to Obama[/SIZE][/FONT]
<!-- end head --><!-- deck -->[FONT=Palatino, Georgia, Times New Roman, Times, serif][SIZE=+1]Senator's links to mortgage giants also include campaign contributions[/SIZE][/FONT]
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<HR SIZE=1>[SIZE=-1]Posted: September 17, 2008
9:10 pm Eastern

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[FONT=Palatino, Times New Roman, Georgia, Times, serif]By Jerome R. Corsi[/FONT]
<!--- copywrite only show on NON commentary pages as per joseph meeting 8/23/06 ------>[SIZE=-1]<!-- copyright -->© 2008 WorldNetDaily <!-- end copyright -->[/SIZE]
<!-- begin bodytext --><TABLE align=right border=0><TBODY><TR><TD width=297>

Fannie Mae headquarters in Washington, D.C.</TD></TR></TBODY></TABLE>NEW YORK – Campaign contributions from Fannie Mae and Freddie Mac made to Barack Obama may backfire if the Democratic presidential hopeful wages an aggressive campaign to cast blame on rival John McCain and the Republicans in Congress for the [COLOR=blue! important][FONT='Times New Roman', Georgia, Serif][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]mortgage[/FONT][/FONT][/COLOR][/COLOR]-related losses that forced the U.S. Treasury to take over the quasi-governmental mortgage giants.
A review of Federal Election Commission records back to 1989 reveals Obama in his three complete years in the Senate is the second largest recipient of Freddie Mac and Fannie Mae campaign contributions, behind only Sen. Christopher Dodd, D-Conn., the powerful chairman of the Senate [COLOR=blue! important][FONT='Times New Roman', Georgia, Serif][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]banking[/FONT][/FONT][/COLOR][/COLOR] committee. Dodd was first elected to the Senate in 1980.
According to OpenSecrets.com, from 1989 to 2008, Dodd received $165,400 in Fannie Mae and Freddie Mac campaign contributions, including contributions from PACs and individuals, followed by Obama, who received $126,349 in such contributions since being elected to the Senate in 2004.
In contrast, McCain warned of the coming mortgage crisis as he pressed in 2005 for regulatory reform of Fannie Mae and Freddie Mac.



For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac – known as government-sponsored entities or GSEs – and the sheer magnitude of these companies and the role they play in the housing market," McCain said on the floor of the Senate in 2005, speaking in favor of the Federal Housing Enterprise Regulatory Reform Act of 2005.
McCain pointed out Fannie Mae's regulator had stated the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.
The bill passed the House but was never brought up for a vote in the Senate, largely because of Democratic opposition to change in the Fannie Mae and Freddie Mac regulatory structure that remained in place until the Treasury takeover two weeks ago.
As evidenced by the failure to pass the Federal Housing Enterprise Regulatory Reform Act of 2005, the Democrats in Congress have repeatedly fought back Republican Party efforts to reform the two mortgage banking giants.
Instead, Democrats in Congress have sought to preserve the quasi-governmental status of the mortgage giants, seeing Fannie Mae and Freddie Mac as places to locate former top Democratic Party operatives, where they have earned millions in compensation, despite a continuing series of financial scandals. Enron-like accounting manipulation, for example, boosted earnings to a level at which massive executive bonuses could be paid.
In the aftermath of the U.S. government takeover, attention has focused on three Democrats with close ties to Obama who served as Fannie Mae executives: Franklin Raines, former Clinton administration budget director; James Johnson, former aide to Democratic Vice President Walter Mondale; and Jamie Gorelick, former Clinton administration deputy attorney general.
All three Obama-related executives earned millions in compensation from Fannie Mae.
Johnson earned $21 million in just his last year serving as Fannie Mae CEO from 1991 to 1998; Raines earned $90 million in his five years as Fannie Mae CEO, from 1999 to 2004; and Gorelick earned an estimated $26 million serving as vice chair of Fannie Mae from 1998 to 2003, according to author David Frum, a fellow at the American Enterprise Institute.
All three have been involved in mortgage-related financial scandals.
In 1998, according to the Washington Post, Gorelick, as Fannie Mae vice chairman, received a bonus of $779,625, despite a scandal in which employees falsified signatures on accounting transactions to manipulate books to meet 1998 earning targets. The moves, in turn, triggered multi-million-dollar bonuses for top executives.
Gorelick was embroiled in another controversy over an alleged conflict of interest when a 1995 memo she authored as deputy attorney general surfaced while she was a member of the 9/11 commission.
The memo, which became known as the "Gorelick Wall," appeared to establish barriers that barred federal anti-terrorist criminal investigators from accessing various federal records and databases that may have assisted them in their criminal investigations.
According to the Associated Press, Raines and several other Fannie Mae top executives were ordered in a civil lawsuit to pay nearly $31.4 million for manipulating Fannie Mae earnings over a period of six years to trigger their massive bonuses.
Raines was also forced in the settlement to give up Fannie Mae stock options valued at $15.6 million.
Last year, the Securities and Exchange Commission alleged Freddie Mac had engaged in accounting fraud from 2000 to 2002, imposing a $50 million fine on the company and on four executives fines for amounts ranging from $65,000 to $250,000.
Raines currently advises Obama on housing policy.
Johnson was appointed to head Obama's vice presidential selection committee, until a controversy concerning an alleged $7 millions in questionable real estate [COLOR=blue! important][FONT='Times New Roman', Georgia, Serif][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]loans[/FONT][/FONT][/COLOR][/COLOR] he received on favorable terms from failed sub-prime mortgage [COLOR=blue! important][FONT='Times New Roman', Georgia, Serif][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]lender[/FONT][/FONT][/COLOR][/COLOR] Countrywide Financial surfaced and forced him to step down.
WND previously reported a panel chaired by Elena Kagan, dean and professor of law at Harvard Law School, speculated at the June two-day meeting of the American Constitution Society that Gorelick was a possible attorney general cabinet appointment if Obama should be elected president.
The decision by the U.S. Treasury to take over Freddie Mac and Fannie Mae could end up costing the U.S. taxpayer as much as $100 billion, although the extent of losses at the two giant [COLOR=blue! important][FONT='Times New Roman', Georgia, Serif][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]mortgage [/FONT][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]companies[/FONT][/COLOR][/FONT][/COLOR][/COLOR] remains to be determined.
According to the Wall Street Journal, Freddie and Fannie own or guarantee about $5.2 trillion worth of mortgages.
The riskiest loans held by Freddie and Fannie are known as "Alt-A" and sub-prime mortgages, worth about $780 billion, or about 15 percent of the total portfolio.
The federal government takeover of Freddie and Fannie passes to U.S. taxpayers the contingent liability for failures in the entire $5.2 trillion loan portfolio held by the two mortgage giants.
Over the past four quarters, Freddie and Fannie have suffered losses of about $14 billion, as the [COLOR=blue! important][FONT='Times New Roman', Georgia, Serif][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]mortgage [/FONT][COLOR=blue! important][FONT='Times New Roman', Georgia, Serif]market[/FONT][/COLOR][/FONT][/COLOR][/COLOR] has been hit by a wave of defaults and foreclosures not seen in the U.S. since the 1930s.

 

[steaktartar]

hell of a thread

 

[tocco05]

hell of a thread

I figure I will keep all the stuff on the scumbag Franklin Raines in one thread. Enjoy:toast:

 

[Dave007inVegas]

It’s eyes wide shut for the Dems again. :thumbsup:

 

[tocco05]

It’s eyes wide shut for the Dems again. :thumbsup:

It fucking amazing, isn't it.

 

[Dave007inVegas]

It fucking amazing, isn't it.

I could be wrong but I think you left all the spinners speechless. :Carcajada: