The Whistleblowers’ Third Lemon Award is to Fannie and FHFA
Posted on March 7, 2016 by William Black | Leave a comment
By William K. Black
March 3, 2016
The Bank Whistleblowers United’s third weekly lemons award is made jointly to the Federal Housing Finance Agency (FHFA) and Fannie Mae (with a dishonorable mention to the federal judiciary). The award goes for these entities’ indifference and even hostility to whistleblowers. On September 6, 2008, the FHFA placed Fannie and Freddie into conservatorship in conjunction with the largest public bailout in global history. Fannie and Freddie failed in an orgy of fraudulent mortgage loans.
Fannie had suffered enormous losses in the early 2000s from a variant of “accounting control fraud.” Those frauds were brought to the attention of the public and the FHFA’s predecessor agency (OFHEO) by a Fannie Mae whistleblower, Roger L. Barnes. The Washington Post reported:
Two exhaustive investigations have backed up Roger L. Barnes’s allegations that Fannie Mae’s financial statements could not be trusted and that accounting managers manipulated numbers to meet rising earnings targets.
Naturally, Barnes experienced retaliation that destroyed his career at Fannie Mae, though he was the person doing everything right according to the law and Fannie’s own policies. Fannie’s regulators forced out its CEO and CFO in response to the securities fraud. Paragraph 2 of the SEC complaint against Fannie Mae for securities fraud explicitly charged that the purpose of the fraud was to produce hundreds of millions of dollars in bonuses to Fannie’s officials.
http://neweconomicperspectives.org/2016/03/whistleblowers-third-lemon-award-fannie-fhfa.html
