Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.
One of those allegedly asleep-at-the-switch board members was Chicago’s Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.
As gatekeeper to Obama, Emanuel now plays a critical role in addressing the nation’s mortgage woes and fulfilling the administration’s pledge to impose responsibility on the financial world.
The accounting scandal wasn’t the only one that brewed during Emanuel’s tenure.
During his brief time on the board, the company hatched a plan to enhance its political muscle. That scheme, also reviewed by the board, led to a record $3.8 million fine from the Federal Election Commission for illegally using corporate resources to host fundraisers for politicians. Emanuel was the beneficiary of one of those parties after he left the board and ran in 2002 for a seat in Congress from the North Side of Chicago.
The board was throttled for its acquiescence to the accounting manipulation in a 2003 report by Armando Falcon Jr., head of a federal oversight agency for Freddie Mac. The scandal forced Freddie Mac to restate $5 billion in earnings and pay $585 million in fines and legal settlements. It also foreshadowed even harder times at the firm.
Many of those same risky investment practices tied to the accounting scandal eventually brought the firm to the brink of insolvency and led to its seizure last year by the Bush administrationChicago Tribune
Make sure you read the whole story at The Ciicago Tribune as there is to much to post!
There is more: I don’t think we will see this reported on NBC after learning about Beth A. Wilkinson.
Beth Wilkinson
Beth A. Wilkinson is a prominent Washington, D.C. lawyer.
She also served as Fannie Mae’s executive vice president, general counsel and corporate secretary from February 2006 until September 2008. She resigned her position at Fannie Mae along with three other senior executives on September 19, 2008, after the troubled mortgage giant was taken over by the government.
She is married to David Gregory, the moderator of NBC News’ Meet the Press. Read More
See The Chicago Tribune cause there is more to this then one would think! How in this World did Emanuel get into the White House? Looks as if we have a bunch of crooks in the White House, and its understandable why Obama picked them.
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