The House and the Senate have included additional funding for the Office of Federal Housing Enterprise Oversight in an emergency supplemental appropriations bill to cover litigation expenses involving former Fannie Mae and Freddie Mac executives.The $120 billion supplemental bill approved by the House includes $7.6 million, which OFHEO Director James Lockhart requested earlier this year. The Senate bill provides $4.8 million. House and Senate appropriators will meet later this month to hammer out a final bill. Meanwhile, Mr. Lockhart has informed an administrative law judge that he will not recuse himself from a case in which OFHEO has charged former Fannie chairman and chief executive Franklin Raines, former chief financial officer Timothy Howard, and former comptroller Leanne Spencer with manipulating the company's earnings to maximize their bonuses from 1998 to 2003. The former executives requested Mr. Lockhart's recusal on the grounds that he is biased and should not be in a position to make a final decision in the case. OFHEO is seeking to recover $115 million in bonuses paid to the former executives. Once the administrative judge renders a decision, which is not expected until 2008, Mr. Lockhart can accept it or reject it.

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