Re: FANNIE MAE CEO TO RUN BANK BAILOUT! -- The Catbird's Forum

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Date Posted: 22:28:25 04/22/09 Wed
Author: Bobby N. Harmon
Subject:

Re: FANNIE MAE CEO TO RUN BANK BAILOUT!
In reply to: Bobby N. Harmon 's message, "FANNIE MAE CEO TO RUN BANK BAILOUT! (His reward for doing such a good job in running Fannie Mae???)" on 21:18:26 04/18/09 Sat

CV05-00030 - U.S. Dept of Justice, David C. Farmer, Trustee vs. Bobby N. Harmon - Exhibit: "For Freddie and Fannie, Trouble At The Top"

Thursday, April 23, 2009 1:16 AM

From: Bobby N. Harmon

To: "President Barack Obama" , "Eric Holder" , "David Farmer" , "Steven Guttman" , "Carol K. Muranaka" , "David A. Ezra" , "Judith Neustadter" , "Kevin S.C. Chang" , "Barry M. Kurren" , "Securities & Exchange Commission Enforcement Division" , "U.S. Treasury Dept. Office of Inspector General" , "Office of Inspector General US Dept of Justice" , "Executive Office for U.S. Trustees" , "Robert Faris" , "Thomas Fitton" , "SEC Office of The Inspector General" , "Hawaii State Bar Association"

Cc: "ACLU Hawaii" , "All Representatives" , "All Senators" , "Andrew Walden" , "Aon Insurance Managers" , "Arthur Rath" , "Benjamin Kudo" , "Bradley Tamm" , "Carl Morton" , "Charles Goodwin" , "Charles Hurd" , "David Shapiro" , "Dee Jay Mailer" , "Dorothy Sellers" , "Hugh Jones" , "Insurance Division Fraud Branch" , "J C Shannon" , "James B Nicholson" , "James B. Farris" , "James Cribley" , "James Wriston" , "Jeffrey Watanabe" , "Jim Dooley" , "Jo Ann Uchida" , "Joe Moore" , "John D. Finnegan" , "John Goemans" , "Judge Lloyd King" , "Judson Witham" , "Ken Conklin" , "Lawrence Reifurth" , "Linda Lingle" , "Lyn Flanigan Anzai" , "Margery Bronster" , "Marsh Affinity Group" , "Michael N. Tanoue" , "Michelle Tucker" , "Nathan Aipa" , "Office of Inspector General Civil Rights Complaints" , "Office of the U.S. Trustee District of Hawaii" , "Paul Alston" , "Randall Roth" , "Rick Daysog" , "Robert Bruce Graham" , "Robin Campaniano" , "Samuel P. King" , "William K Slate" , "Jim Terrack" , "Don Michak" , "Rocco Sansone" , "Ted Pettit" , "Mark Burch" , "Laura Thielen" , "Vaughn & Lynda Robinson" , "Catbird" , "James Duca" , "Ian Lind" , "Roy F. Hughes" , "Malia Zimmerman" , "Jack Cashill" , "Marshall Chriswell" , "Tom Flocco" , "Eric Shine" , "Laser Haas" , "Lucy Komisar" , "Democrats.com" , "Debra Sweet" , "Jane Kirtley" , "V K Durham" , "John Jubinsky" , "Yamil Berard" , "Global Exchange" , "William K. Black" , "Carole Williams" , "Susan Tius" , "Alex Jones" , "Human Rights in China" , "Michelle Malkin" , "Heather Vsn Doren" , "Phil J. Berg" , "Amnesty International U.S.A." , "Michael Moore" , "California Anti-SLAPP Project"

For Freddie And Fannie, Trouble At The Top
Maurna Desmond, 04.23.09, 12:01 AM EDT

Between government takeovers, resignations and a suicide, management is anything but stable.

Government-controlled mortgage giants Freddie Mac and Fannie Mae have been charged with playing a critical role in the recovery of the U.S. housing market. But recent departures by chiefs at both firms and the untimely death of Freddie's chief financial officer have caused major trouble at the top.

The apparent suicide of Freddie Mac's ( FRE - news - people ) David Kellermann Wednesday is one of a series of major losses to government-sponsored-enterprise (GSE) leadership. On Friday Herb Allison left his post as Fannie's chief executive to run the Treasury's Troubled Asset Relief Program. In March Freddie Chief David Moffett quit, citing a desire to return to the profit-making sector.

The jobs aren't easy. With some $6 trillion in liabilities between them, the firms lost a combined $50 billion last quarter--and larger losses are on the way. And both rely on taxpayer life support: Since November, Freddie has gotten $44.6 billion; Fannie, $15.2.

There's also a bevy of bosses. James Lockhart, director of the Federal Housing Finance Agency, has say over any major decisions at Fannie or Freddie, and he has to report to Treasury Secretary Timothy Geithner, who in turn has to keep in line with White House goals.

"It's a very difficult attraction process," says Terry McCarthy, a managing director at Horton International, an executive search firm. "This is largely because of the uncertainty at both companies."

Says Freddie Mac spokesman Michael Cosgrove, "We're looking for someone who would see this as a challenge and an opportunity to serve the country playing a key role in carrying out the administration's housing plan."

Freddie and Fannie play a more vital role than ever in the U.S. housing market. The Federal Housing Administration now guarantees about a third of new U.S. loans, up from 3% at the height of the bubble. Most of the remaining new mortgages are still backed by one of these two. Furthermore, GSE bonds are held in huge numbers by large companies and formidable countries. In other words, allowing Fannie and Freddie to fail on their obligations could cause more losses at major institutions and possibly a foreign relations nightmare.

The government currently controls Fannie and Freddie, yet the firms' future shape is unknown. Some argue that they should be broken up; others, including former Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke, think the two might be best off offering only straightforward mortgage insurance, like the Federal Housing Administration. (See "Bust Up These Beasts.")

When it comes to management, Fannie Mae ( FNM - news - people ) seems to be the stronger of the two. With four major appointments this week, including a new chief executive officer, it managed to fill all 10 of its major executive slots. Much of this is new talent brought over from the private sector. Half have been at the firm for more than a year.

Fannie's board managed to ratify the firm's chief operating officer at the time, Michael Williams, as CEO in one business day after Herb Allison, who'd served as CEO since the September takeover, was tapped Friday to run TARP.

The question remains as to why the government would snatch the CEO of a government-owned trillion-dollar company to run a taxpayer-funded billion-dollar bailout program. Treasury officials declined to comment, instead offering sympathy to the family of Kellermann, whose body was found early Wednesday morning. Kellerman worked at Freddie for 16 years and was named acting chief financial officer when the government seized the company.

While Allison's exit can't be good for Fannie, it's certainly a boon for the Treasury. His experience at pension company TIAA-CREF gave him an idea of how a quasi-public institution works. His time at Merrill Lynch's investment banking outfit will help him understand the sensibility of the bankers he's supposed to engage. "He should be able to put some kind of metrics in place to track this thing. It's one of the best moves Geithner's made," says McCarthy. As for poaching talent from Fannie Mae, he says: "In industries like this it's a small pool to draw from. A lot of recycling goes on."

Before Allison left, he remade Fannie's executive suite. As chief financial officer, he tapped David Johnson, who had the same gig at Hartford Financial ( HIG - news - people ) and Cendant Corp. Before that he spent 12 years at Merrill Lynch in investment banking.
Fannie's new general counsel, Timothy J. Mayopoulos, came from Bank of America ( BAC - news - people ), where he wore the same hat for five years. Prior to that, he was general counsel at Deutsche Bank Americas and senior deputy general counsel for Credit Suisse First Boston.

Edward Watson will run Fannie's technology and operations after doing the same thing for Citigroup ( C - news - people ), where he had the same job. Kenneth J. Phelan was tapped as executive vice president for Enterprise Risk Management. Before that he was head of risk management at JPMorgan Chase ( JPM - news - people ) and held senior positions at UBS ( UBS - news - people ) and Credit Suisse First Boston.

Fannie Mae spokesman Brian Faith says that a lot of the nationalized firm's employees stick around because they feel a call to public service. "It's the commitment to the affordable housing mission. Nowadays it's preventing foreclosures," he said.

Unlike Allison, Freddie's Moffet headed for the private sector. He took the helm at Freddie Mac in September as a part of the government seizure. He was CFO at Star Banc when it acquired U.S. Bancorp ( USB - news - people ) in 2001 and served in executive roles at Bank of America and Security Pacific. By March he'd thrown in the towel.

Eleven of Freddie Mac's 13 executive positions are permanently filled. Unlike those on top at Fannie Mae, many of these people have been with the Freddie for a long time; all of them for at least a year. "They just had a title change," says Cosgrove.

Still, Freddie is shopping for leadership. John A. Koskinen, Freddie's temporary CFO, has been vocal about being able to vacate his office at moment's notice. Kellermann's death leaves a trillion-dollar financial firm with nobody in charge of its books.

http://www.forbes.com/2009/04/22/fannie-freddie-kellermann-business-wall-street-freddie.html

# # #

References:
http://www.kycbs.net/AIG.htm
http://www.kycbs.net/Bailing-Out-Wall-Street.htm
http://www.kycbs.net/Central-Pacific-Bank.htm
http://www.kycbs.net/Freedom-To-Sing.htm
http://www.kycbs.net/GoldmanSachs.htm
http://www.kycbs.net/Henry-Paulson.htm
http://www.kycbs.net/HUD.htm
http://www.kycbs.net/JUSTICE.htm
http://www.kycbs.net/MerrillLynch.htm
http://www.kycbs.net/No-Bailout-for-Billionaires.htm
http://www.kycbs.net/SLAPP.htm
http://www.kycbs.net/Treasury.htm
http://www.kycbs.net/WallStreet.htm

April 23, 2009

Dear President Obama, Attorney General Holder, Mr. Farmer; Mr. Guttman; Ms. Muranaka; Judge Ezra, Judge Chang, Judge Kurren, and All Concerned:

Due to the discovery of new facts in this case, I am adding the subject Exhibit as it relates to your lawsuit which violates my Constitutional Rights of Free Speech and a Fair Trial by a jury of my peers, and to Federal and Hawaii Anti-SLAPP statutes.

In view of all the facts that I have presented in this and hundreds of other Exhibits and witness descriptions, it is beyond comprehension that former Attorney General Alberto Gonzales; Assistant U.S. Trustees Curtis Ching, Gayle Lau and Carol Muranaka; Judges Eden Hifo (fka Bambi Weil), Kevin Chang, David Ezra, Barry Kurren, Lloyd King and Robert Faris, and Trustees Mary Lou Woo, James Nicholson and David C. Farmer; the American Arbitration Association arbitrator Judith Neustadter Fuqua, and attorney Steven Guttman can still claim that they were non-conflicted, fair, impartial, and unbiased in this case.

In spite of all this factual evidence (not just "political opinions" or "conspiracy theories" as you have alleged before), I am again asking that we attempt to reach a global settlement of this matter through confidential negotiation or mediation rather than continuing these costly and seemingly-endless court proceedings.

If you, and your insurance carriers, are still NOT willing to attempt to negotiate or mediate a settlement, then I ask that you perform your mandated review of this new Exhibit in accordance with Judge Ezra's Order, and advise me if you find it contains any so-called "protected subject matter", and whether or not you intend to OBJECT to my filing a Motion to reopen this case.

Mr. Farmer, I respectfully request your immediate reply. If I do not receive a response from you or your insurance carrier within 15 days, I will assume that you have found no "PSM" in these updated pages, and that you will NOT file any objections to my Motion.

Very truly yours,

Bobby N. Harmon, CPCU, ARM

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