And you thought Enron was a disaster?  Accounting irregularities and a failure to disclose financial information at Freddie Mac and Fannie Mae could lead to disaster for American taxpayers.  After a series of failures and disturbing revelations about Freddie Mac, Congress has finally decided to seriously examine the activities of the nation’s housing government-sponsored enterprises (GSEs).  These companies are endowed with taxpayer-backed subsidies worth more than $10.6 billion annually.  They are the only two Fortune 100 companies in the nation currently exempt from the SEC’s registration and disclosure rules and they own or control almost half of the nation’s mortgage market. 

• Freddie Mac is the subject of investigations by the Securities and Exchange Commission, the Office of Federal Housing Enterprise Oversight, the New York Stock Exchange, and federal prosecutors, and faces class action lawsuits on behalf of shareholders in two states and a labor union pension fund.
• Freddie Mac fired President David Glenn and chief executive Leland Brendsel was forced to retire for allegedly failing to cooperate in an investigation into accounting irregularities within the company.  The company recently ousted two more executives, including new CEO Greg Parseghian because of concerns about his direct involvement in the accounting manipulations.
• Fannie Mae officials have admitted that the company’s use of synthetic fuel tax credits is under review by the IRS and the New York Times has reported that Fannie Mae faces larger losses from interest rate fluctuations than previously disclosed.

There are currently four bills pending in Congress to strengthen oversight of the GSEs.  The first of a series of important hearings took place Wednesday, as Treasury Secretary John Snow and Housing Secretary Mel Martinez weighed in before the House Financial Services Committee detailing the Bush Administration’s position on the legislative proposals currently before Congress

To discuss the hearings, legislation, and important issues related to Fannie Mae, Freddie Mac and their impact on the nation’s economy, homeowners, and taxpayers, please contact Mark Carpenter at (202) 467-5300 to schedule an interview with:

The Honorable J.C. Watts, Jr.

Former U.S. Representative (R-Okla.)

Chairman, FM Policy Focus

&

Mr. Tom Schatz

President of The Council for

Citizens Against Government Waste

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.