James Lockhart, acting director of the Office of Federal Housing Enterprise Oversight, called for restitution of the enormous bonuses that were paid to the executives of Fannie Mae. These bonuses were paid on information that was manipulated fraudulently by Chief Executive Franklin Raines and his executives.
While the odds of this happening are slim, Washington is such an incestuous place. Odds are there will a great deal of bluster followed by a window of enforced silence when they determine that it will not be politically viable to force Franklin Raines to give up his ill gotten gains.
“The first line of defense is that the board of Fannie Mae should go after these individuals and try to get restitution” of some of the bonus money, Lockhart testified. The directors owe the shareholders no less, he said, and if they fail to do so his agency will pursue the executives.
Lockhart did not name any current or former Fannie Mae executives. But at a hearing Tuesday by a House panel, he blamed ousted former Chief Executive Franklin Raines by name and other senior company officials for the massive accounting failures and reported manipulations designed to enrich executives.
Raines, a prominent Washington figure who was a White House budget director in the Clinton administration, earned more than $90 million from 1998 to 2003, according to the report. via AZ Central
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Our legal system is really out of whack if a company executive can steal millions of dollars from a company and there is no means of recovering it for the shareholders. Bank robbers are sentenced to prison for 20 years for taking $5,000 when there is no weapon used. Apparently executives know that the penalty for their misdeeds will be minor, especially when they can receive a huge life-time pension which transfers to the spouse upon the death of the executive. Is our system set up to make only the criminals without influence, money or power to be held accountable?