OFHEO Spending Heavily on Litigation

The Office of Federal Housing Enterprise Oversight has spent over $16 million, or 25% of its budget, on litigation expenses as it pursues administrative charges against former Fannie Mae and Freddie Mac executives.OFHEO receives $66.1 million in funding in fiscal year 2007, including a $6.1 million supplemental appropriation to cover litigation expenses. Former Freddie chairman and chief executive Leland Brendsel recently agreed to a $16.4 million settlement, and four other former Freddie executives agreed to pay civil fines totaling $515,000 and to forfeit $258,000 in ill-gotten gains. OFHEO Director James Lockhart says he expects Congress to provide his agency with only $60 million for the current fiscal year even though the agency's litigation expenses will remain high. An administrative court judge is set to hear OFHEO's charges against former Fannie chairman and CEO Franklin Raines in 2008. Mr. Lockhart noted that litigation expenses and the appropriations process make it difficult to plan for and fill 40 positions. OFHEO currently has 235 full-time employees. OFHEO can be found on the Web at http://www.ofheo.gov.