In the New York Times today it is reported that the government subsidized giant mortgage buyer Fannie Mae must pay $444 million in a settlement over executives manipulating the books to award themselves huge bonuses and parachutes. This comes on the heels of the $125 million settlement that Freddie Mac, its smaller rival, paid regulators in 2003 after it was found to have understated earnings by about $5 billion from 2000 to 2002 to minimize large profit swings.
Investigators cataloged how Fannie Mae repeatedly “violated accounting principles” to show stable earnings and less volatility, allowing executives to show profits that didn’t exist and thereby pay themselves huge unwarranted bonuses.
Fannie Mae and Freddie Mac are settling with the government for the crime of theft by former executives who were quietly allowed to step down and keep their loot they stole from American taxpayers?
Excuse me, isn’t stealing a crime? At what rung on the ladder of success does blue-collar felony crime become simply white collar impropriety or misdemeanor?
Don’t local bank clerks who “violate accounting principles” go to jail for theft? At what corporate level or level of government must one reach to no longer be held accountable for theft? This is just more example of the morass of corruption that permeates the business world and our government.
The Federal National Mortgage Association, nicknamed Fannie Mae, and the Federal Home Mortgage Corporation, nicknamed Freddie Mac, have operated since 1968 as government sponsored enterprises (GSEs). This means that, although the two companies are privately owned and operated by shareholders, they are protected financially by the support of the Federal Government. These government protections include access to a line of credit through the U.S. Treasury, exemption from state and local income taxes and exemption from SEC oversight.
Why would our government purposefully exempt this huge cash generating private enterprise, protected from insolvency by American taxpayers, from oversight?
To paraphrase Dana Carvey’s church lady from SNL, “Isn’t that convienient? And who do you think may have caused these executives to steal from American homeowners and taxpayers? Could it be . . . . . . SATAN!
Ohhhh! But never fear, retribution for these criminals is being considered. The Office of Federal Housing and Enterprise Oversight, who stepped in to correct this situation, could call for the company's former executives to return part of their pay package. Ooo-hooo! They might call for the executive crooks to return part of their theft. Maybe – maybe not.
Perhaps the courts should follow this model for local lawbreakers convicted of theft.
So, you stole fifty tires from the Goodyear tire store in Cool Springs? Well, young man, you “violated ownership principles” by taking tires that didn’t belong to you. Okay, we’re gonna let you keep, ohhh say - 30 of them - but you have to return 20 of them – and let that be a lesson to you.
David Sirota, in his bestselling new book,Hostile Takeover,exposes how our government has been taken over by corporations and the stench of corruption that links both. In today’s Baltimore Sun, Sirota addresses government and corporate corruption in an article entitled Money Plus Secrecy Equals Trouble.
“ - the problem is clear: Money mixed with secrecy is the real reason most of the pay-to-play scandals ravaging Capitol Hill are coming out of the appropriations committees. In the corporate world, it is the same thing. Recent headlines document how the CEO of UnitedHealth Group was given $1.6 billion in stock options, the CEO of Pfizer Inc. was given an $83 million pension and the CEO of ExxonMobil Corp. was granted a $400 million retirement package. The Wall Street Journal subsequently found that companies are quietly footing the bill for their executives' taxes. And USA Today reports that over the last five years, at the 60 worst-performing companies in America in terms of their market value, executives have pocketed $12 billion. All of this has raised a question from shareholders: How have these executives been able to raid company treasuries like this with such little fanfare?”
That’s a rhetorical question. It’s because our elected officials that are employed by us to oversee and regulate corporations and government spending are in on the take. They are part of the criminal culture that passes itself off as “working for the benefit of the American people”.
What are we going to do about it? Is the reason we don’t speak out that we are all part of the problem? Are too many of us “on the take” in one fashion or another? Maybe that’s why there is no public outcry and call for justice.
God, I Miss Paul Wellstone.
