Former Fannie Chiefs to Get Pension Pay
The Office of Federal Housing Enterprise Oversight has given Fannie Mae the green light to pay initial pension and deferred compensation benefits to its recently ousted chairman/CEO Franklin Raines and chief financial officer Timothy Howard.
However, the order does not include stock options, 2004 bonuses, or other incentive pay.
OFHEO also said the approval on initial payments will not affect its ability to seek restitution against Messrs. Raines and Howard should it decide to go that route.
At a Congressional hearing last week, Rep. Richard Baker, R-La., who oversees the GSE Subcommittee, said OFEHO "does not, apparently, have the authority to unilaterally act on the behalf of taxpayers."
The congressman added that litigation might be "required after the fact to reclaim" what he called "ill-gotten gains."
Messrs. Raines and Howard are entitled to receive monthly pensions of $114,393 and $36,071, respectively.
OFHEO is continuing its investigation into Fannie Mae's accounting scandal. Under pressure from OFHEO, Messrs. Raines and Howard were forced out by Fannie's board right before Christmas.
The congressionally chartered company is expected to restate previously booked earnings downward by $9 billion.
Congress is expected to pass legislation this year that would create a new regulator for Fannie Mae and Freddie Mac, giving the entity many of the same enforcement and legal powers enjoyed by bank regulators like the Federal Deposit Insurance Corp.
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