DOLE APPLAUDS FHFA DECISION TO DENY GOLDEN PARACHUTES FOR OUSTED FANNIE, FREDDIE EXECS
Today, U.S. Sen. Elizabeth Dole applauded the Federal Housing Finance Agency's (FHFA) decision to prevent the payment of multi-million dollar compensation packages to ousted Fannie Mae and Freddie Mac executives.
"I was not about to stand for golden parachutes for these irresponsible executives," said Dole. "I welcome this decision. It's about time that common sense prevailed at Fannie and Freddie."
According to several published accounts, the top executives at Fannie and Freddie were set to receive a combined $24 million in severance pay after gross mismanagement effectively drove their companies into the ground, spurring a government takeover that has exposed American taxpayers to tremendous liabilities.
Under the Housing and Economic Recovery Act of 2008, FHFA was given the power to permit or prohibit these payouts on a case-by-case basis. Last week, Dole helped introduce legislation, S. 3458, to explicitly require that the FHFA use its authority to prohibit the former executives from receiving any such severance package. Sunday, FHFA announced that it would exercise its authority to deny the payment of golden parachute packages to the former executives of Fannie Mae and Freddie Mac.
Additionally, Dole helped introduce legislation last week to impose a permanent ban on Fannie Mae and Freddie Mac's questionable lobbying practices, which played a significant role in the companies' recent collapse. Specifically, the legislation will prohibit Fannie Mae and Freddie Mac from making lobbying expenditures, political donations and contributions to 501(c) organizations.
In 2003, after it was revealed that Freddie Mac had misstated its earnings, Dole helped introduce legislation to strengthen oversight of the Government Sponsored Enterprises (GSEs). Fannie Mae and Freddie Mac responded in full force, dispatching an army of lobbyists to Capitol Hill to oppose the bill. In 2004, their lobbying tab totaled $26 million, and in 2005, it exceeded $24 million.
Dole helped reintroduce the GSE reform bill in the 109th Congress, and in July 2005 it was approved by the Senate Banking Committee but never considered by the full Senate. In the 110th Congress, Dole reintroduced the bill again with Sens. Chuck Hagel, Mel Martinez and John Sununu.
In response to the housing and mortgage crisis, Congress approved and the President signed into law in July 2008 a housing bill that created a stronger GSE regulator and provided the Treasury Department the authority to place Fannie and Freddie under conservatorship. Recently, the Treasury Department used its new authority, and Fannie and Freddie are effectively under new leadership and have ceased lobbying activities, and their respective Foundations' assets are under review.