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A Life Lost in the Shadow Of Freddie Mac's Turmoil
Freddie Mac was seized in September after the Treasury Department and Federal Housing Finance Agency determined that mounting losses at the firm and its sister, Fannie Mae, posed a risk to the entire financial system. Losses at Freddie Mac have been particularly steep, and together the two companies have received nearly $60 billion from the government to shore up their financial health.
Once a high-flying finance company, Freddie Mac has been transformed into a quasi-government agency, carrying out big parts of the Obama administration's housing recovery plan. Employees at Freddie Mac lost much of their wealth with the collapse of the company's stock and face uncertain job prospects long term.
Kellermann was responsible for the company's financial controls, financial reporting, taxes, capital oversight and compliance with federal requirements. He was previously senior vice president, corporate controller and principal accounting officer after starting at the company as an analyst.
Even with all the financial losses at Freddie Mac, Kellermann continued to find lighter moments. In the weeks after the company was seized by the government, his grim presentations at Tuesday morning meetings of senior executives would often end with him cracking jokes, colleagues said.
"He will be most remembered for his affability, his personal warmth, his sense of humor and his quick wit," said John A. Koskinen, the company's chief executive.
Yet Kellermann has also figured in recent controversies at Freddie Mac. He and a group of company attorneys tussled with its regulator in early March as the firm prepared to file its quarterly earnings report with the Securities and Exchange Commission. The group insisted that Freddie Mac inform shareholders of the cost to the company of helping carry out the Obama administration's housing recovery plan. The regulator urged the company not to do so, according to several sources familiar with the matter. An FHFA official contested that account, saying the regulator did not oppose disclosure but how the information was portrayed in the filing.
Freddie Mac ultimately disclosed the material.
Separately, the SEC and Justice Department have been investigating Freddie Mac over questions of accounting, disclosure and corporate governance, the company said in a recent SEC filing. Sources said Kellermann was not a target of the probe by the U.S. Attorney's office in Alexandria but was someone investigators wanted to question. "He obviously knew about things that we would want to know about,'' said one law enforcement source, who was not authorized to comment and spoke on condition of anonymity.
David R. Palombi, a company spokesman, said that Freddie Mac "knows of no connection between this terrible personal tragedy and the ongoing inquiries that are discussed in our recent SEC filings."
Earlier this month, Freddie Mac and Fannie Mae were criticized on Capitol Hill after outlining plans to pay $210 million in retention bonuses to 7,600 employees over 18 months. Those payments included an $850,000 bonus for Kellermann disbursed over a year and a half. He had already received $170,000. Top lawmakers have demanded that employees pay back money they've received and that the companies suspend all bonuses.
During the uproar over bonuses, Kellermann's wife sent an e-mail to neighbors letting them know that a security detail was guarding the house, one recalled. Another neighbor said the Kellermanns hadn't wanted the protection -- they were reluctant to see Freddie's troubles intrude so publicly on their private lives.
Staff writers Tom Jackman, Brigid Schulte, Annie Gowen, Chris L. Jenkins and Jerry Markon and staff researcher Meg Smith contributed to this report.