Witnesses Announced For Subcommittee Hearing on Taxpayer-Paid Legal Fees To Defend Fannie, Freddie, And Former Executives

Cmte Financial Services (R)
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Witnesses Announced For Subcommittee Hearing on Taxpayer-Paid Legal Fees To Defend Fannie, Freddie, And Former Executives

: Oversight and Investigations Subcommittee Chairman Randy Neugebauer announced the witnesses for a hearing to examine the taxpayer-funded expenditure of legal fees incurred by the former leadership of Fannie Mae and Freddie Mac. The hearing will be held on Tuesday, February 15th at 2pm in room 2128 Rayburn.

Subcommittee Chairman Neugebauer said, “Legal fees expended by Fannie Mae and Freddie Mac in defense of the officials who led those organizations prior to and during the subprime mortgage mess raise serious questions about the conservators’ responsibilities to prevent any further losses to the American taxpayer. More than $160 million of the taxpayer’s money has been spent defending securities-related lawsuits against the companies and their executives.”

Since the imposition of the conservatorship, Fannie Mae has paid approximately $24 million in legal fees for former executives, including Franklin Raines ($7.9 million), Timothy Howard ($4.5 million), and Leanne Spencer ($11.8 million) to defend civil suits alleging they failed to meet their duties. Moreover, an additional $30 million has been spent defending other officers and directors.

Financial Services Committee Chairman Spencer Bachus said, “The Oversight and Investigations Subcommittee has brought to light what had been a well-kept secret. Many people imagined, but few people knew, the enormity of the legal expenses that taxpayers have incurred defending Fannie Mae and its former top executives in lawsuits accusing them of fraud. The American people are already paying billions to bail out Fannie Mae and Freddie Mac; they should not be forced to spend hundreds of millions more to cover the legal expenses of their former top executives, too.”