Americans Cover Millions In Legal Bills For Fired Fannie And Freddie Execs
January 27, 2011 by Special To Personal Liberty
American taxpayers have unknowingly spent more than $160 million to help provide legal defense for former executives of mortgage lenders Fannie Mae and Freddie Mac, according to The New York Times.
Information about these costs was closely guarded until Representative Randy Neugebauer (R-Texas) requested the figures from the Federal Housing Finance Agency last year. The taxpayer-funded expenditures, which were released last week, show that about $132 million has been spent to defend Fannie Mae and its officials against various lawsuits and investigations.
In 2008, the Federal government took over Fannie and Freddie in the midst of the subprime lending crisis, which resulted in a sharp decline of the companies' stock market value. Former execs with both companies have since been barraged by lawsuits and probes regarding accounting irregularities that allegedly occurred in the years preceding the housing crisis.
"The question I think that doesn't pass the smell test is: Why are we paying the legal fees for former employees?" Neugebauer, who is now the chairman of the House Financial Services Committee, told FOX News. "What kind of litigation is pending that would cause us to think we need to continue to put taxpayers' money in legal fees for people that actually got fired?"
According to the news provider, the controversy comes just a few weeks before President Barack Obama's administration is set to present its future plans for overhauling Fannie and Freddie.