Fannie Ex-CEO Gets $2.6M in 'Back Pay'

Fannie Mae has agreed to pay its former chief executive officer and chairman Franklin Raines $2.6 million as part of a settlement tied to his early "retirement" in December 2004.In September of last year Mr. Raines -- a key figure in the government-sponsored enterprise's $11 billion accounting scandal -- initiated arbitration proceedings against the company, citing a clause in his employment contract that he provide Fannie with six months notice prior to retiring. Officially, Mr. Raines retired in December 2004, but essentially Fannie's board forced him out of the company as regulators began to question its accounting practices. Mr. Raines has other pending contract-related claims against the company. Fannie's regulator, the Office of Federal Housing Enterprise Oversight, has said publicly that it may sue to recover past bonus money paid to certain current and former executives because it believes accounting rules were violated to meet earnings-per-share bonus targets. A few months ago the Justice Department confirmed that it would not bring criminal charges against the company relating to its accounting scandal.