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Big Bonuses at Fannie and Freddie Draw Fire
Key Excerpts from Article on Website of New York Times
Posted: April 11th, 2009
http://www.nytimes.com/2009/04/04/business/04bonus.html?part...
Fannie Mae and Freddie Mac, the two troubled companies at the heart of the nations mortgage market, are set to pay their employees retention bonuses totaling $210 million, despite calls from lawmakers to cancel the payments. The bonuses, which were made public on Friday, were defended by the companies federal regulator, James B. Lockhart, who said he intended to let them proceed. In a letter sent last week to Senator Charles E. Grassley, an Iowa Republican, Mr. Lockhart disclosed that 7,600 Fannie and Freddie workers were scheduled to receive payouts aimed at retaining those employees most critical to keep and difficult to replace. Under the plan, 213 employees will receive retention bonuses worth more than $100,000 this year, and one Freddie Mac executive will receive $1.3 million. Those figures drew sharp rebukes from Mr. Grassley and other lawmakers, who noted that Fannie and Freddie had received pledges of $400 billion from taxpayers to offset huge losses since they were seized by the government in September. Similar bonuses paid by the American International Group, which was also bailed out by taxpayers, incited fiery attacks from the White House and legislators when they were revealed last month. Its hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year, Mr. Grassley said in a statement. Its an insult that the bonuses were made with an infusion of cash from taxpayers.
Note: For many revealing reports on the realities behind the Wall Street bailouts, click here.
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