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Email MyBestYears GUEST eCOLUMN.com
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It is the failure of the mainstream media to kick the spin and put out the facts before the
American people.
According to the auditors, "During the period covered by this report — 1998 to mid-2004
— Fannie Mae reported extremely smooth profit growth and hit announced targets for
earnings per share precisely each quarter. Those achievements were illusions
deliberately and systematically created by the Enterprise’s senior management with the
aid of inappropriate accounting and improper earnings management."
The audit report is specific — telling why the Fannie Mae folks inflated their books and
who was responsible for the systematic mirrors and smoke game to inflate earnings.
"By deliberately and intentionally manipulating accounting to hit earnings targets, senior
management maximized the bonuses and other executive compensation they received,
at the expense of shareholders. Earnings management made a significant contribution to
the compensation of Fannie Mae Chairman and CEO Franklin Raines, which totaled
over $90 million from 1998 through 2003. Of that total, over $52 million was directly tied
to achieving earnings per share targets."
So while Franklin Raines, currently
adviser to Senator Obama, walks
free with millions in his pockets,
homeowners and taxpayers all over
America are paying the price of his
failed leadership.
How did this happen? The answer again
comes from the audit report: Basically,
the management at Fannie Mae hid
the payouts from public view.
"Enterprise executives purposely obscured
their official disclosures of executive
compensation and failed to provide
complete information on the post-employment compensation awarded to former CEOs,"
noted the audit report.
The whole story, as documented by the audit report, goes from one tale of falsehoods
followed by another chapter on cover-ups.
"Fannie Mae senior management achieved those earnings targets by regularly
manipulating earnings," notes the report.
"During the period covered by this report, Fannie Mae senior management
systematically withheld information about the Enterprise’s operations and financial
condition from the board of directors, its committees, its external auditors, OFHEO, the
Congress, and the public, or disclosed information that was incomplete, inaccurate, or
misleading," states the audit report.
While the books looked great — good enough to pay out millions to Raines and others
at Fannie Mae — the facts behind the scenes pointed to a crumbling empire ready to
collapse.
"Fannie Mae consistently took a significant amount of interest rate risk and, when
interest rates fell in 2002, incurred billions of dollars in economic losses," states the
report.
Worse still, when it appeared the cover-ups were failing and the auditors were closing in
on the truth, the executives at Fannie Mae combined forces with Democrats in Congress
to try to replace the auditors.
"Fannie Mae senior management sought to interfere with OFHEO’s special examination
by directing the Enterprise’s lobbyists to use their ties to Congressional staff to 1)
generate a Congressional request for the Inspector General of the Department of
Housing and Urban Development (HUD) to investigate OFHEO’s conduct of that
examination and 2) insert into an appropriations bill language that would reduce the
agency’s appropriations until the Director of OFHEO was replaced," noted the report.
So who helped out the Fannie executives?
Sen. Dodd called Bush's proposed stronger regulations on Fannie Mae "inane" and
recommended the president "Immediately reconsider his ill-advised" proposals."
In 2000, when Republicans introduced a reform
act for Fannie, Rep. Frank dismissed the bill,
saying concerns were "overblown" and that
there was "no federal liability there whatsoever."
In 2002, as alarm bells were ringing, Frank
dismissed them with "I do not regard Fannie
Mae and Freddie Mac as problems," according
to a Sept. 10 Wall Street Journal article.
When the accounting scandal finally broke open, Rep. Frank acted quickly . . .
to cover the whole thing up.
"I do not think we are facing any kind of a crisis," stated Frank.
When the scandals began to engulf Fannie Mae and Freddie Mac sending them
spiraling down the tubes, Frank reacted with a comment that is enough to make one's
head spin.
In the same article, Frank noted, "I think Wall Street will get over it if the two collapsed."
McCain's legislation was defeated by Dodd and the Senate Democrats. Since then Dodd
along with Democrat Sens. Obama, John Kerry, and Hillary Clinton — the top four
recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively
opposed any reform measures and supported weakening existing regulations.
So while the mass media spins it all George Bush's fault, the very same people
who oversaw the disaster at Fannie Mae and Freddie Mac are now in charge of
the rescue effort.
© 2008 Newsmax. All rights reserved.
American people.
According to the auditors, "During the period covered by this report — 1998 to mid-2004
— Fannie Mae reported extremely smooth profit growth and hit announced targets for
earnings per share precisely each quarter. Those achievements were illusions
deliberately and systematically created by the Enterprise’s senior management with the
aid of inappropriate accounting and improper earnings management."
The audit report is specific — telling why the Fannie Mae folks inflated their books and
who was responsible for the systematic mirrors and smoke game to inflate earnings.
"By deliberately and intentionally manipulating accounting to hit earnings targets, senior
management maximized the bonuses and other executive compensation they received,
at the expense of shareholders. Earnings management made a significant contribution to
the compensation of Fannie Mae Chairman and CEO Franklin Raines, which totaled
over $90 million from 1998 through 2003. Of that total, over $52 million was directly tied
to achieving earnings per share targets."
So while Franklin Raines, currently
adviser to Senator Obama, walks
free with millions in his pockets,
homeowners and taxpayers all over
America are paying the price of his
failed leadership.
How did this happen? The answer again
comes from the audit report: Basically,
the management at Fannie Mae hid
the payouts from public view.
"Enterprise executives purposely obscured
their official disclosures of executive
compensation and failed to provide
complete information on the post-employment compensation awarded to former CEOs,"
noted the audit report.
The whole story, as documented by the audit report, goes from one tale of falsehoods
followed by another chapter on cover-ups.
"Fannie Mae senior management achieved those earnings targets by regularly
manipulating earnings," notes the report.
"During the period covered by this report, Fannie Mae senior management
systematically withheld information about the Enterprise’s operations and financial
condition from the board of directors, its committees, its external auditors, OFHEO, the
Congress, and the public, or disclosed information that was incomplete, inaccurate, or
misleading," states the audit report.
While the books looked great — good enough to pay out millions to Raines and others
at Fannie Mae — the facts behind the scenes pointed to a crumbling empire ready to
collapse.
"Fannie Mae consistently took a significant amount of interest rate risk and, when
interest rates fell in 2002, incurred billions of dollars in economic losses," states the
report.
Worse still, when it appeared the cover-ups were failing and the auditors were closing in
on the truth, the executives at Fannie Mae combined forces with Democrats in Congress
to try to replace the auditors.
"Fannie Mae senior management sought to interfere with OFHEO’s special examination
by directing the Enterprise’s lobbyists to use their ties to Congressional staff to 1)
generate a Congressional request for the Inspector General of the Department of
Housing and Urban Development (HUD) to investigate OFHEO’s conduct of that
examination and 2) insert into an appropriations bill language that would reduce the
agency’s appropriations until the Director of OFHEO was replaced," noted the report.
So who helped out the Fannie executives?
- In 2007, Sen. Dodd, D-Conn., the chairman of the Senate
Banking, Housing and Urban Affairs Committee, called on
Fannie Mae and Freddie Mac's regulators to lift the portfolio
caps. He argued that allowing the two firms to buy more
subprime mortgages, at least temporarily, would inject much
needed liquidity into the market and calm the financial markets.
Of course, that was like offering heroin to an addict.
Sen. Dodd called Bush's proposed stronger regulations on Fannie Mae "inane" and
recommended the president "Immediately reconsider his ill-advised" proposals."
In 2000, when Republicans introduced a reform
act for Fannie, Rep. Frank dismissed the bill,
saying concerns were "overblown" and that
there was "no federal liability there whatsoever."
In 2002, as alarm bells were ringing, Frank
dismissed them with "I do not regard Fannie
Mae and Freddie Mac as problems," according
to a Sept. 10 Wall Street Journal article.
When the accounting scandal finally broke open, Rep. Frank acted quickly . . .
to cover the whole thing up.
"I do not think we are facing any kind of a crisis," stated Frank.
When the scandals began to engulf Fannie Mae and Freddie Mac sending them
spiraling down the tubes, Frank reacted with a comment that is enough to make one's
head spin.
In the same article, Frank noted, "I think Wall Street will get over it if the two collapsed."
- Oh, and where was Obama? In his short term in Congress,
Obama has raked in more Fannie Mae donations than
any other member of Congress in 20 years except Dodd.
Obama has sought the campaign advice of two former Fannie
Mae CEOs who took money based on the "purposely
obscured" accounting documented by the audit report. Obama
has bundlers and advisers from the collapsed institution
sprinkled over his campaign like sugar over cookies.
- Where was John McCain? In 2005, Sen. McCain proposed
legislation that could have prevented this whole mess
to reform Fannie and Freddie.
McCain's legislation was defeated by Dodd and the Senate Democrats. Since then Dodd
along with Democrat Sens. Obama, John Kerry, and Hillary Clinton — the top four
recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively
opposed any reform measures and supported weakening existing regulations.
So while the mass media spins it all George Bush's fault, the very same people
who oversaw the disaster at Fannie Mae and Freddie Mac are now in charge of
the rescue effort.
© 2008 Newsmax. All rights reserved.
| Charles R. Smith is one of America's leading experts on cyber technology and its implications for war, terrorism, privacy and every way technology interacts with our lives. He is an exclusive columnist for NewsMax.com as its "CyberWar" expert and is currently President and CEO of SOFTWAR, his own consulting company. Mr. Smith's life sounds like a character in a Tom Clancy novel. He received a U.S. government "Top Secret" clearance as a top-level computer engineer for EDS. There he was assigned to work with the U.S. Army on logistic projects during the Cold War. During the past ten years, Smith has also become a noted investigative journalist and his reports have been covered by NewsMax.com, Insight magazine, USAF, "The Connection" Information Protection journal, E-SOURCES Online, U.S. Naval Institute Proceedings Magazine and dozens of other outlets. He is a journalist recognized by the Central Intelligence Agency (CIA), Dept. of Defense (DOD), Dept. of Justice (DOJ) and the U.S. Commerce Department (DOC). Smith frequently appears on national television for the Fox network on matters of national security and international affairs and is a popular guest on radio shows. |
CHARLES R. SMITH
...Cover-Ups Led to Financial Crisis
One does not have to look very far to find the root cause of our
current financial dilemma.
Despite the partisan political spin that it’s "all George Bush's fault,"
the facts were well documented in 2006 by the audit report of
the Office of Federal Housing Enterprise Oversight (OFHEO).
...Cover-Ups Led to Financial Crisis
One does not have to look very far to find the root cause of our
current financial dilemma.
Despite the partisan political spin that it’s "all George Bush's fault,"
the facts were well documented in 2006 by the audit report of
the Office of Federal Housing Enterprise Oversight (OFHEO).
| Used by permission of Charles. R. Smith and NewsMax.com. Click here to read the entire column at Newsmax. |
 |
Franklin Raines, paid $90 Million from
1998 through 2003 for Fannie Mae
"leadership"
1998 through 2003 for Fannie Mae
"leadership"
