Sign in to comment!

Menu
Home

Politics

Senate

Sixty Senators Decry 'Wildly Imprudent' Bonuses at Fannie, Freddie

Freddie Mac & Fannie Mae

Sixty senators from both parties complained Friday to the chief regulator for Fannie Mae and Freddie Mac that the nearly $13 million in bonuses to executives at the bailed-out mortgage giants were "wildly imprudent," as the lawmakers called for "substantial changes" to executive pay policies. 

"We are sincerely concerned about the message this sends to millions of American families when the unemployment rate stands at 9.0% and the housing market remains very weak," the senators wrote in a letter to Edward DeMarco, acting director of the Federal Housing Finance Agency, and to Treasury Secretary Tim Geithner

They called the "wasteful" bonuses a "step in the wrong direction." 

Some lawmakers, noting the entities have received $141 billion in taxpayer bailouts, have called on the Obama administration to cancel the bonus payments. Sen. John Thune, R-S.D., who put together the letter along with Sen. Mark Begich, D-Alaska, said the administration should "immediately" put a stop to the payments. 

But such a move could raise legal concerns, since the bonuses were already paid out. Other lawmakers have called for Washington to make changes to prevent such bonuses from being awarded in the future. 

The letter from the 60 senators did not explicitly say the $13 million in bonuses should be canceled. It instead called for "substantial changes to the executive compensation policies to more accurately reflect the public mission of your agency and the fiscal reality facing (the government)." 

White House aides say President Obama took a lead on cleaning up excessive compensation on Wall Street with the Dodd-Frank bill, but those provisions do not apply to Fannie and Freddie. 

"The White House was not involved, and nor should it be," White House Press Secretary Jay Carney said Tuesday. 

Amid the controversy, Freddie Mac on Thursday announced that it was seeking $6 billion from the Treasury Department, after reporting a $4.4 billion loss for the third quarter.