Give ‘em Back Boys

Perhaps Raines and Co. didn’t get away scott-free after all…

From the Washington Post:

U.S. Seeks to Recover Fannie Mae Bonuses

The government will pursue some Fannie Mae executives to recover bonus money they reaped in an accounting scheme _ if the mortgage giant itself fails to do so.…The OFHEO, which Lockhart would head if confirmed, last month issued a scathing report alleging a six-year accounting fraud at Fannie Mae, the largest U.S. buyer and guarantor of home mortgages. It said employees manipulated accounting to hit company quarterly earnings targets so senior executives could pocket hundreds of millions in bonuses from 1998 to 2004.

“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 alleged 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 _ including some $52 million in bonuses directly tied to the company hitting earnings targets. He is one of 30 current and former executives and employees who are under review by the Fannie Mae board for possible disciplinary action, termination or forfeiture of their bonuses.

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