The give and take was also marked by a dispute over the decision by subcommittee Chairman Richard H. Baker (R-La.) to disclose previously confidential information about the compensation of 23 Fannie Mae executives.
Fannie had enlisted lawyer Kenneth W. Starr, who led the investigation of President Bill Clinton's relationship with Monica S. Lewinsky, to try to keep Baker from disseminating that information. The chart Baker released showed that 21 Fannie Mae executives each received more than $1 million in 2002, not including stock options. At rival Freddie Mac, seven executives received more than $1 million in 2002, the chart showed.
Franklin D. Raines called OFHEO's probe "the most unusual regulatory endeavor" he had seen.
(Susan Biddle -- The Washington Post)
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_____Archive_____
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On Fannie's Board, Many Bonds (The Washington Post, Oct 6, 2004)
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Fannie Executives to Defend Accounting Practices (The Washington Post, Oct 6, 2004)
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Restatement Decision Deferred (The Washington Post, Sep 30, 2004)
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As Fannie, Freddie Regroup, Impact May Be Minimal (The Washington Post, Sep 29, 2004)
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Regulator Says Fannie Resisted (The Washington Post, Sep 25, 2004)
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Regulator Has No Confidence in Fannie Leadership (The Washington Post, Sep 24, 2004)
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Fannie Employee Raised Concerns (The Washington Post, Sep 24, 2004)
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Report Slams Fannie Mae (The Washington Post, Sep 23, 2004)
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Warnings Shadowed Firms' Rapid Growth (The Washington Post, Sep 23, 2004)
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Probe Examining Fannie's Promises (The Washington Post, Sep 23, 2004)
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Raines complained that the information was private and would provide a road map for corporate recruiters trying to raid Fannie's ranks.
But Rep. Barney Frank (D-Mass.), the ranking Democrat on the House Financial Services Committee, said it was appropriate for Baker to release the chart. He said Fannie Mae should serve as a model and should not pay its executives bonuses.
"To the extent that people play games to get bonuses, I am outraged," Frank said. "People making that much money -- let me put it this way -- at the level of compensation of the top officers of Fannie Mae, they should get bonuses if they rush into a burning building and rescue a kid, maybe a cat, but not for doing their job."
Fannie, which says it funds one in every five mortgages in the United States, plays a major behind-the-scenes role in the financial system. Chartered by the government to ensure the availability of home mortgages, Fannie borrows money from investors to buy mortgages from lenders such as banks and savings and loans. It also packages mortgages into securities for sale to investors.
The company, whose brick headquarters on Wisconsin Avenue NW evokes Colonial Williamsburg, had debts of $942 billion as of July 31, and its bonds are widely held by banks and other financial institutions.
As Raines introduced himself to the panel, a symbol of his stature and influence on Capitol Hill was staring down at him. Raines coordinated fundraising for the portrait of former House Financial Services Committee chairman Jim Leach (R-Iowa) that hangs on the wall at the front of the hearing room.
"I'm a brother, a husband, a father and a friend," Raines told the subcommittee, adding that he didn't recognize himself or his company in the comments that some made at yesterday's hearing. He said it was difficult to have to explain the critical regulator's report to his children.
"It's hard when your daughter feels she needs to say to her dad, 'I support you,' " Raines said.
