Report Blames Brendsel & Glenn

A just-released internal audit of the Freddie Mac restatement scandal blames former chief executive Leland Brendsel and president David Glenn, saying the two men "failed to take prompt corrective action" when it became clear that the company's corporate accounting department lacked the necessary "depth and expertise."The report, managed by outside counsel James Doty, says the two men ignored specific pleas by the board in the fall of 2001 and the spring of 2002 to fix the department. The Doty report says the two men controlled "the flow of information" and kept the board in the dark about its accounting and disclosure problems. The report also says Mr. Glenn attended a meeting where the company's former auditors (Arthur Andersen) expressed concerns that the corporate accounting department "lacked leadership," while complaining that compensation levels in the department were "too low" to retain critical talent. Messrs. Brendsel and Glenn could not be reached for comment. Freddie Mac can be found online at http://www.freddiemac.com.