Considering that Obama’s trillion dollar Stinkulus Package cost American Taxpayers more than it took to send a man to the moon AND build our interstate highway system, $100 million in legal fees is just a drop in the bucket. However, remind me again why it is we are shelling out money to DEFEND the very same executives at Fannie and Freddie who helped collapsed our financial system to begin with?:
Legal Fees Mount at Fannie and Freddie
Gretchen Morgenson – NYT
Taxpayers have advanced almost $50 million in legal payments to defend former executives of Fannie Mae and Freddie Mac in the three years since the government rescued the giant mortgage companies, a regulatory analysis has found.
In that time, $37 million has gone to three former Fannie Mae executives accused of securities fraud, according to the analysis by the inspector general of the Federal Housing Finance Agency [FHFA], which oversees both companies.
“F.H.F.A. and Fannie Mae believe that their options are limited in paying current legal fees for former officers and directors,” [the Inspector General of the FHFA, Steve A Linick,] said in a statement. But he called for greater oversight. The legal costs are the responsibility of taxpayers because of contracts struck by the companies before they collapsed.
But with legal outlays since 2004 reaching $99.4 million for Franklin D. Raines, Fannie Mae’s former chief executive; J. Timothy Howard, former chief financial officer; and Leanne G. Spencer, former controller, it seems unlikely that the taxpayers will ever recover the money even if some or all of them are found liable.
The inspector general’s report noted that the legal contracts could have been repudiated when the companies were taken over in September 2008. They were not, though, and taxpayers have covered the costs since then. Taxpayers are also bearing the cost of recent lawsuits by the Securities and Exchange Commission against the top executives who were running the mortgage companies when they failed.