Fannie's Raines & Howard to Testify

Two of Fannie Mae's highest-ranking executives -- both at the center of the mortgage giant's widening accounting scandal -- say they will testify next week before a House Financial Services subcommittee looking into the mess.Fannie Mae chairman and chief executive officer Franklin Raines and chief financial officer Timothy Howard confirmed late Thursday that they will appear before the subcommittee on government-sponsored enterprises, chaired by Rep. Richard Baker, R-La. However, now that the Justice Department has reportedly launched a criminal probe into accounting fraud at the company, it is possible both men could plead the Fifth Amendment against self-incrimination, depending on what questions they are asked. On Thursday the Louisiana Republican slammed the mortgage giant's board for supporting current management, adding that recent public comments made by two Fannie directors are "disturbing and disappointing." Lead outside director Ann McLaughlin Korologos called Mr. Raines a "first-class" CEO for his handling of the "situation," and director Patrick Swygert said, "No one should draw an implication that we are moving to a change in management." Thursday afternoon Rep. Baker blasted Fannie's executive team, saying it supported a "culture of mismanagement." The hearing is scheduled for Oct. 6.