Obama warns on Fannie, Freddie golden parachutes

[UpInArms]

Source: Reuters

WASHINGTON, Sept 9 (Reuters) - Democratic presidential candidate Barack Obama warned U.S. regulators on Tuesday it would be "a gross violation of the public trust" if they did not use their power to block excessive severance payments to executives leaving Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) or Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz).

In a letter to Treasury Secretary Henry Paulson, Illinois Sen. Obama cited news reports that the CEOs of Fannie and Freddie could get millions of dollars in severance pay. He said "under no circumstances" should such payments be allowed.

Paulson on Sunday unveiled a stunning agreement for a federal takeover of the two mortgage finance giants.

"I urge you immediately to clarify that the agreement with Fannie Mae and Freddie Mac voids any such inappropriate windfall payments," said the letter obtained by Reuters.

Read more: http://www.reuters.com/article/bondsNews/idUSWBT00966920080909

[FiveGoodMen]

1. Good for Obama!

(and good luck getting it done)

[BlooInBloo]

2. I'll be damned - he listened to me....

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=3943421#3943426

[Ghost Dog]

3. Yup.

But needs to say a lot more...

[Frisbee]

4. I'm sure their worried. not. n/t

[Orsino]

5. "Excessive" severance payments?

Why should a bail-out pay any executive severance?

[RUMMYisFROSTED]

16. Question...too...obvious...

[antigop]

6. They may have had employment contracts, with severance terms

Obama said that when Congress gave regulators the power to step in and rescue the companies, it also granted the power to block any severance payments to CEOs.

If they had an employment contract, I'll bet they sue.

<Edit> And do we really think Congress will block severance payments? Really? They would actually grow a spine?

[HillbillyBob]

10. Their contracts also told them they were supposed to

keep the company solvent and in the black too..seems they failed in
their duty to the corporation, the investors and the customers.
Why should they get paid for screwing up?

[antigop]

13. Have you read their actual employment contract?

And do you actually think Congress will stop the severance payments? If I were a betting person....I'd bet they won't.

[skyounkin]

17. Well,

that's cause congress is controlled by a couple of spineless asshats, pelosi and reid.

[eowyn_of_rohan]

7. Excellent

SO glad he has made a public statement about this.

[Duer 157099]

8. Wow. This story better not disappear

I think it's one story that everyone can and should agree upon, except for maybe the two CEOs.

If anybody in Congress, ANYBODY, allows this, I hope they never ever ever ever live it down and are hounded until they resign.

There is NO excuse, NO reason whatsoever that the taxpayer should foot those parchute bills! In fact, I think Congress should confiscate all of the assets of those CEOs on their way out the door!

Grrrrrrrr!

[antigop]

15. I agree Congress should prevent the severance payments, but will they? n/t

[sonias]

9. This is a great issue - he should keep it going

Americans are furious that failed executives get rewarded for bad behavior. This practice has got to be stopped. Regular working Americans don't get any golden parachutes when they get canned. Block any severance payments to CEOs!

GOBAMA!

Sonia

[mcg]

11. I worked for Fannie Mae years ago and saw how screwed up it was.

They treated contractors like they were subhuman. A manager there said the Fannie Mae made money despite itself. I was reluctantly shown a list with some politicians names due to a project I was working on. It appeared that there was some corrupt politics going on with how they did business. I saw a top level executive there being treated like he was a king. I've heard that Freddie Mae also abuses contractors.

The executives deserve nothing.

[unkachuck]

12. Socialism....

....for the filthy rich....

"...CEOs of Fannie and Freddie could get millions of dollars in severance pay."

....after the Fannie Mae and Freddie Mac debacle, that's brought our economy to the verge of economic collapse, do you still think capitalism works in 21st century?

....don't answer that, answer this,...when do we get our Socialism?

[ozone_man]

14. I'll rec that.

The very least we can do is to remove the golden parachutes. I'd prefer to give the shareholders nothing at all, seeing that it's our money that's bailing them out.

[madamesilverspurs]

18. How long will it take

for McCain's team to find a way to grab the credit for Obama's statement. . .

[lonestarnot]

19. Serious applause!

:applause:

[mrJJ]

20. McCain's Boys at Work

The feigned outrage of McCain and Palin at the inaction of Congress and the influence of Fannie Mae and Freddie Mac lobbyists is ironic considering the fact that “at least 20 McCain fundraisers have lobbied on behalf of Fannie Mae and Freddie Mac” in recent years.

More troubling is the fact that McCain’s campaign manager, Rick Davis, “served as president of an advocacy group led by Fannie Mae and Freddie Mac” that worked to cripple regulatory initiatives in Congress because the two institutions feared that “Congressional meddling would lower their healthy profits.” As the Politico reported in July:

Davis headed the Homeownership Alliance, a lobbying association that included Fannie, Freddie, nonprofit groups, real estate agents, homebuilders and consumer advocates. … worked to oppose congressional efforts to tighten controls on Fannie and Freddie.

In July 2003 for example, Davis “wrote to the American Banker, taking issue with an opinion piece…arguing that Fannie and Freddie should operate with greater transparency.” Such transparency and greater regulatory controls might have averted the current crisis.

http://thinkprogress.org/2008/09/09/mccain-lobby-fannie-freddie/

[EmperorHasNoClothes]

21. Well, that's TWO CEO votes that Obama won't be getting!

:rofl:

[4_TN_TITANS]

22. Bring it to a recorded vote...

nice ammo for use on the incumbent Repubs.

[redqueen]

23. Smart.

Very smart.

[barnieca]

24. Congress should give back money donated by Fannie and Freddie

Many congressmen received very large donations from Freddie
and Fannie.

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

http://www.reuters.com/article/politicsNews/idUSN0451979920080204