Franklin Raines, a liberal power-broker, mismanaged government-backed mortgage giant Fannie Mae so badly that a federal bailout of it is now planned. He received multimillion dollar bonuses at Fannie Mae, using massive accounting fraud to inflate his earnings — fraud for which he later paid a (grossly inadequate) financial penalty.
But instead of taking responsibility for his actions, he recently had the gall to attack banking experts in the Bush Administration who warned about Fannie Mae’s risky and improper practices. In a July 16 editorial in the Washington Post, he accused them of being “ideologues.”
In today’s Post, I have a letter to the editor that rebukes Raines for his gall in attacking those whistleblowers and lecturing the public about the condition of our banking system, given his own financial irresponsibility and role in spawning the mortgage crisis. For Raines to offer advice on how to improve our financial system is like David Duke and James Earl Ray giving advice on how to improve race relations.
We earlier discussed the perverse, costly and wasteful mortgage bailout bills passed by Congress in response to the mortgage crisis, which would actually increase Fannie Mae’s lending authority. The liberal Congressional leaders behind those bills, such as Barney Frank, Chris Dodd, and Charles Schumer, have long blocked vital reforms of Fannie Mae, which helped spawn the mortgage crisis, even as Fannie Mae and the liberal power-brokers who run it were contributing large sums of money to lawmakers and spending millions on high-priced lobbyists. Senator Dodd claimed just days ago that Fannie Mae was in good financial shape, even as its deteriorating financial condition resulted in a bailout plan. By contrast, Senator Schumer triggered a massive bank failure at private mortgage lender IndyMac, which did not have high-priced lobbyists or pay off lawmakers, through publicity that resulted in a run on the bank by panic-stricken depositors.