Fannie Mae exec wants his bonus back

Former Fannie Mae chairman and CEO Franklin Raines testifies before a Senate committee in February 2004.

TEXT OF STORY

Doug Krizner: Former Fannie Mae CEO Franklin Raines goes to court in Washington DC today. He led the mortgage finance company when a multibillion dollar accounting scandal broke. Now Raines is suing to recover millions in unpaid bonuses. Ashley Milne-Tyte reports.

Ashley Milne-Tyte: Franklin Raines is just one of a number of executives who could several years' worth of back compensation from Fannie Mae.

But before the recipients get a cent they have to reckon with the Office of Federal Housing Enterprise Oversight.

The agency is fretting that Fannie Mae might be giving away more than it can afford. It wants the company to revisit its accounting. Jay Warren is a labor and employment lawyer with the law firm Bryan Cave.

Jay Warren: Even though in theory Fannie Mae could make the payments and then sue to recover them, you have much more control over the situation if you investigate first, and pay later.

Franklin Raines says the government has no right to meddle in Fannie Mae's decisions about his compensation. He's suing to receive almost 60,000 shares worth a cool $3.9 million.

I'm Ashley Milne-Tyte for Marketplace.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...