Taxpayers footing legal bills for former Fannie execs
Jim Brown - OneNewsNow

Many U.S. taxpayers are unaware that they are now paying for the legal bills of three top former executives for government-run mortgage firm Fannie Mae.

Former Fannie Mae executives Franklin Raines, J. Timothy Howard, and Leanne Spencer are accused of cooking the books to increase their bonus compensation -- yet the three claim they had nothing to do with the accounting irregularities that were discovered at the mortgage giant in 2005. Shareholders sued the executives because Fannie's stock collapsed when those accounting problems emerged. But under the terms of their employment contracts, Raines, Howard, and Spencer were indemnified from having to pay legal bills that arose out of shareholder lawsuits.
 
Now that Fannie has been under government control for a year, those $6.3 million in legal bills now belong to American taxpayers. New York Times business columnist Gretchen Morgenson says it is unfortunate that the former Fannie executives are evading punishment.
 
"With the taxpayer paying these legal bills at the moment, it really is...very upsetting that these people are not even being held accountable to the extent of paying their own legal bills -- and that just seems wrong," argues the journalist.
 
"And I think to many people it seems that this is another example of how there are two sets of rules -- one set for the little people, and another set for people who are in positions of power," she says.
 
Morgenson recently wrote an article for the New York Times titled "They Left Fannie Mae, but We Got the Legal Bills."
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TGIF