While banks are returning TARP money, some having taken it under duress, Fannie Mae continues to lose money and receive more bailout. In return for such dismal performance executives are getting pay raises and bonuses.
It is a growing contention that Fannie played a disproportionately large role in a once in a century compilation of bad policies, hubris and incompetence. Fannie Mae was exempt from SEC, FDIC, and FED scrutiny, and was subject to Congressional oversight that refused to acknowledge their systemic role on the financial catastrophe.
The Wall Street Journal noted in “The Biggest Losers” that while other banks are turning around Fannie Mae and Team Obama is just digging a much deeper hole.
All of which would seem to make the CEOs of Fannie and Freddie the world’s most overpaid bureaucrats. A release from the Federal Housing Finance Agency that also fell in the Christmas Eve forest reports that, after presiding over a combined $24 billion in losses last quarter, Fannie CEO Michael Williams and Freddie boss Ed Haldeman are getting substantial raises. Each is now eligible for up to $6 million annually.
Freddie also has one of the world’s highest-paid human resources executives. Paul George’s total compensation can run up to $2.7 million. It must require a rare set of skills to spot executives capable of losing billions of dollars.
Where is Treasury’s pay czar when we actually need him? You guessed it, Fannie and Freddie are exempt from the rules applied to the TARP banks. The government gave away the game that these firms are no longer in the business of making profits when it announced that the CEOs will be paid entirely in cash, though it is discouraging that practice at other big banks. Who would want stock in the Department of Housing and Urban Development?
Meanwhile, these biggest of Beltway losers continue to be missing from the debate over financial reform. The Treasury still hasn’t offered its long-promised proposals even as it presses reform on banks that played a far smaller role in the financial mania and panic.