......and he gives advice to Obama on mortgage and housing policy matters.



World Net Daily

Jerome Corsi

NEW YORK – Former Clinton administration budget adviser and current Obama housing adviser Franklin Raines perpetrated an Enron-like accounting scandal as chief executive officer of Fannie Mae, resulting in his receiving millions in compensation over a six-year period.

Raines and two other top Fannie Mae executives agreed to pay $24.7 million, including a $2 million fine, to settle a civil lawsuit filed in December 2006. It accused Raines and the two other executives of manipulating Fannie Mae earnings, allowing executives to pocket hundreds of millions in bonuses from 1998 to 2004, according to the Associated Press.

The AP also reported Raines was forced to give up Fannie Mae stock options valued at $15.6 million as part of the settlement.

As recently as July 17, the Washington Post ran a profile piece on Raines claiming he “has been quietly constructing a new life for himself,” in which Raines takes “calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.”

Prior to the settlement, the Office of Federal Housing Enterprise Oversight, known as OFHEO, the government regulator that oversees Fannie Mae and Freddie Mac, had sought $100 million against Raines and the other two executives, plus restitution totaling more than $115 million in bonus money tied to the accounting scheme manipulation.

Fannie Mae separately paid a $400 million civil fine in a settlement with OFHEO and the Securities and Exchange Commission in an agreement to make top-to-bottom changes in its accounting procedures to avoid future Raines-like accounting manipulation scandals.

The Securities and Exchange Commission’s top account accused Fannie Mae under Raines’ leadership of misstating earnings for three and a half years, leading to an estimated $9 billion earnings restatement that wiped out 40 percent of Fannie Mae’s profits from 2001-2004, according to Business Week.

Central to the Raines accounting scandal was a strategy to “cook the books” of Fannie Mae to show the type of earnings that would trigger hundreds of millions of bonuses to Raines and other key Fannie Mae executives.

When the scandal surfaced, Raines resigned from Fannie Mae in December 2004, with a $19 million severance package, according to the Associated Press.

The Raines scandal surfaced in 2004 when charges Fannie Mae accounting manager Roger Barnes had been making since 1999 surfaced. He said Fannie Mae had been manipulating its earnings through “cookie jar” accounting to justify payment of hundreds of millions of dollars in bonuses to top executives.

In his 26-page testimony before OFHEA, Barnes detailed multiple Fannie Mae deviations for Generally Accepted Accounting Practices, or GAAP, and his repeated efforts to bring these irregularities to a wide range of Fannie Mae managers and executives, all without positive result.

Barnes said he left Fannie Mae in October 2003 because he felt “forced out” once it excluded him from working on the OFHEA investigation.

“As a result of Fannie Mae’s refusals to take the concerns I had raised about financial and accounting practices seriously, and the retaliation I faced for raising these concerns, I had no choice but to separate from the Company in October 2003,” Barnes said on page 25 of his written Oct. 6, 2004, testimony to the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises of the U.S. House of Representatives Committee on Financial Services.

Still, the OFHEA report on the Raines scandal cited Barnes 34 times in the first 80 pages of its 200-page report.

Barnes, an African American, reportedly received a $1 million settlement after threatening a whistleblower lawsuit citing racial discrimination, according to USA Today.
http://countusout.wordpress.com/

"Racial discrimination" my arse!!! These guys are criminals and Americans are tired of hearing that just because a person is black, they cannot be challeneged or held to account. And this time-----it has cost us $700 BILLION!!

It's time for Democrats to go......

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"If the President simply adds a couple of Republican solutions to a trillion dollar health care package that the American people don't support, it isn't bi-partisan. It's political cover," Rep Eric Cantor (R-Va.)

This is the same sort of thing that Ken Lay of Enron did. And he went to jail. So---where's the investigations? When will the feds and the Justice Dept finally go after these crooks who just fleeced the American people with this HUGE scandal?? And who was protecting him? Barney Frank, Chris Dodd, Chuck Schumer, Barack Obama....and many other Demcrat leaders. It was NOT the Bush admininstration or REpublicans who let us down by NOT doing their jobs:

The New York Times published an article on Sept. 11, 2003:

"The Bush Administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac … the plan is an acknowledgement by the Administration that oversight of Fannie Mae and Freddie Mac … is broken."

"“Congressional Democrats … fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

“ ‘These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,’ said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’

“Representative Melvin L. Watt, Democrat of North Carolina, agreed.
‘I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,’ Mr. Watt said.”

I've been wondering why the silence has been deafening on Capitol Hill. No Enron-style investigations, no calls for special prosecutors. According to the current chairman of the House Banking Committee, Fannie and Freddie were not facing any financial crisis. It was just people exaggerating the problems."

"Well, the American taxpayers are now on the hook for the "exaggerated problems" Mr. Frank and Mr. Watt thought was nothing more than a shell game brought out by those trying to weaken the power of poorer families to obtain affordable housing. Just remember the lines from these two Democratic congressmen the next time you hear Barack Obama and congressional Democrats attempt to lay the blame for Fannie and Freddie at the feet of President Bush. The president had it right five years ago and his reform plan was blocked by Democrats, not Republicans."

http://pundits.thehill.com/2008/09/1...el-and-barney/

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"If the President simply adds a couple of Republican solutions to a trillion dollar health care package that the American people don't support, it isn't bi-partisan. It's political cover," Rep Eric Cantor (R-Va.)

I just posted that NYT article from 03 on another thread, and the blocking from the democrats avoided any further regulation reform. Obama is neck deep in Freddie, and his Fannie is on the line. It is time to expose this empty suit Obama of reform.

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"Arguing with a Democrat is like wrestling a pig in pig poop, after a while you realize they enjoy it"

Do you guys read the papers?

The Raines connection has been debunked by everyone involved.

Here's some free advice. If you see it in a McCain campaign spot... assume it's a lie. It probably is.

Nothing was debunked. Obama denied it. Color me surprised. Obama has lied before there is no reason to believe he didn't lie again. McCain's ad is based upon a neutral source.

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Obama The Naive: “To those who cling to power through corruption and deceit and the silencing of dissent we will extend a hand if you are willing to unclench your fist.’’ The Iranian response? “The Great Satan now has a black face.’’

Obama denied it. Raines denied it. The Post debunked it.

Evidence provided for all three.

The McCain ad is based on a story in the Post "Style Section" that got it wrong.

The Post now says the connection is slight at best.

Sorry.

A proven liar denied it, another involved in accounting scam denied it, and the Post reported it.

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Obama The Naive: “To those who cling to power through corruption and deceit and the silencing of dissent we will extend a hand if you are willing to unclench your fist.’’ The Iranian response? “The Great Satan now has a black face.’’

Yeah---all three backtracked ONLY after it became known that Fannie Mae was going to fail.

It's the same way Obama handled Ayers and Wright---acting as if it never happened AFTER the relationships became public.

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"If the President simply adds a couple of Republican solutions to a trillion dollar health care package that the American people don't support, it isn't bi-partisan. It's political cover," Rep Eric Cantor (R-Va.)