By Thomas Heath and Dina ElBoghdady
Washington Post Staff Writers
Monday, September 8, 2008
Herbert M. Allison Jr., 65, who took over yesterday at Fannie Mae, worked for decades at Merrill Lynch and most recently served as chairman and chief executive of TIAA-CREF, the pension fund giant serving employees in the academic, medical, cultural and research fields.
David M. Moffett, 56, who now heads Freddie Mac, spent most of his life as a chief financial officer at a series of banks, finishing at U.S. Bancorp in Minneapolis. Since early 2007, Moffett has served as a senior adviser to the financial services team at Carlyle Group, the District-based private equity giant.
Both are stepping into the biggest financial firestorm in Washington, two companies that are often the subject of political turf wars. Both leaders will have to work with the institutions' regulator and the Treasury Department.
Former Fannie Mae chief executive Daniel Mudd and his Freddie Mac counterpart Richard Syron "were in a different kind of position because they were running publicly traded companies that were still controlled by shareholders," said Jaret Seiberg, a policy researcher at Stanford Group Co. "Now that the enterprises have entered conservatorship, the rules are different . . . In conservatorship, you want executives who are facilitators."
Both are known as sticklers for financial detail and for a belief in honest corporate governance.
"As CEO of TIAA-CREF, if you lined up Herb with 100 other CEOs, he would come up as number one on corporate governance," said Steve Bartlett, who is president of the Financial Services Roundtable, an association of the nation's largest bank-based financial services companies, located in Washington. "Accountability, transparency, good governance. He is the guru on that stuff."
As for Moffett, "If I personally had a question about anything regarding financial standards, I would call David Moffett first," Bartlett said. "His reputation is above reproach."
Former colleagues of Moffett, the new head of Freddie Mac, yesterday described him as a smart and detail-oriented financial guru -- as well as a good golfer -- who is a patient listener in meetings.
"David is understated, not a self-promoting guy," said Richard Davis, chairman and chief executive of U.S. Bancorp, who worked closely with Moffett for 15 years. "He doesn't say a lot at meetings, and then when he says a lot, people are all ears."
Moffett, a father of five, works for the Carlyle Group from Florida. His unit focuses on opportunities in the global financial services sector, where co-workers said he was known for his deep experience.
Allison is by many news accounts bookish, a reputation he gained after 28 years at Merrill Lynch. After earning a bachelor's degree in philosophy from Yale, Allison served in the U.S. Navy for four years. He earned a master's in business administration from Stanford in 1971. He climbed the brokerage firm's corporate ladder but resigned as president and chief operating officer in 1999 when he learned he would be passed over for the top job.
For two years after his departure from Merrill, Allison served as president of the Alliance for Lifelong Learning, a joint venture among Oxford, Stanford and Yale universities.
In November 2002, he left to join TIAA-CREF. There, Allison acted as a "catalyst for change," Robert L. Joss, dean of Stanford's graduate business school, said in a statement related to an award Allison received from the school.
To beef up TIAA-CREF's market share, Allison launched an advertising blitz, boosted the company's interaction with customers, introduced new products and reorganized the institution, resulting in its first-ever layoffs.
This year, Allison retired from the fund, and his successor, Roger W. Ferguson, praised him yesterday as a "proven leader in overseeing complex and challenging financial matters."
He comes to Fannie with Republican credentials. In 1999, after leaving Merrill, he served as national finance chairman for the 2000 presidential campaign of fellow Vietnam War veteran Sen. John McCain (R-Ariz.).
Allison is scheduled to address Fannie Mae employees in a town hall meeting today. Both management teams met with their new chief executives yesterday at the headquarters of their new regulator, the Federal Housing Finance Agency, "so we could introduce everyone to help ensure that they can continue tomorrow with business as usual," FHFA director James Lockhart said through a spokeswoman.
Staff writer David S. Hilzenrath and staff researcher Lucy Shackelford contributed to this story.