Former SEC Chairman Hired to Help Fannie Mae

Breeden Also Advised Hollinger, WorldCom

Fannie Mae has recruited former Securities and Exchange Commission chairman Richard C. Breeden to help the company deal with a potential $9 billion correction of its financial statements.

Janice Daue, a spokeswoman for the District-based mortgage finance company, said yesterday that Breeden will serve "as a strategic counsel as the company works through its restatement and reaudit." Breeden, who didn't return a phone call, led an investigation for directors of newspaper publisher Hollinger International Inc. that last year accused the company's former leaders of running a "corporate kleptocracy" -- a charge they vehemently denied. He also served as court-appointed monitor of WorldCom Inc. after its accounting scandal, and he recommended changes in its corporate governance.

In a related development, Franklin D. Raines, who was forced out last month as Fannie's chairman and chief executive under pressure from federal regulators, is giving up board of director seats at Pepsico Inc. and TIAA-CREF, which manages retirement funds, and has offered to resign from the board of pharmaceutical maker Pfizer Inc.

Breeden's new role and Raines's departures from corporate boards were reported in yesterday's Wall Street Journal. Neither Raines nor his lawyers returned calls.

At the soft-drink company, Raines "offered to not stand for reelection, and the board accepted that proposal" Thursday, said Mark Dollins, a PepsiCo spokesman. Raines will continue to serve on the Pepsico board until his term expires in May, and he also will continue as chair of its audit committee, though he will recuse himself from matters that present potential conflicts of interest, Dollins said.

Raines resigned last weekend from the TIAA-CREF board of overseers. "Mr. Raines decided on his own to resign . . . because he believed it was the appropriate thing for him to do," Stephanie Cohen Glass, a TIAA-CREF spokeswoman, said by e-mail.

The Pfizer board will consider Raines's offer to resign when it meets in February, said Paul Fitzhenry, a spokesman for the drug company. Pfizer's corporate governance principles call for directors to resign when their "principal occupation or business association changes substantially."