GSE Inks 'CO,' Will Aid Case Against Ex-CEO

Freddie Mac has signed a consent order agreeing to aid the Office of Federal Housing Enterprise Oversight in its pursuit of back pay and severance given to former chairman and chief executive officer Leland Brendsel and former chief financial officer Vaughn Clarke.Under the consent order, Freddie will turn over documents that are part of civil complaints brought against the company, including (if it exists) a document OFHEO calls the "earnings management binder(s)." The CO asks Freddie to convert the departures of Messrs. Brendsel and Vaughn to terminations, a move that might -- eventually -- force the two men to turn over millions of dollars in back pay and severance. (Technically, back in 2003 Mr. Brendsel retired and Mr. Vaughn resigned.) In August of last year, OFHEO lost a court case because a federal judge ruled that it lacked the legal authority to freeze $53.7 million in compensation owed to Mr. Brendsel. To date, Freddie has not classified either former executive as being fired, a legal determination that should help OFHEO.