corruption

Here is another example of how corruption is open for all to see.

Franklin Raines was born into a working class family and through hard work and scholarships graduated from Harvard Law School and went on as a Rhodes Scholar.
Starting in 1969 he started working behind the scenes for various political figures from both parties. In between his government jobs he worked for the law firm of Lazard Freres which is a subsidiary of the world wide investment banking firm of Lazard LTD.
In 1991 he became vice chairman of Fannie Mae and left that post to become Director of Office of Management and Budget in the Clinton Administration where he worked for two years and then became director of Fannie Mae in 1999.
Up to this point it is an admirable career of the little guy makes good.
Recall it was during the Clinton years where the call went out to encourage more people to reach the American dream of home ownership. Clinton told his manager of HUD to use “creative financing” to increase home ownership and thus sent us down the path of no down payment, no documentation, interest only, negative amortization loans which culminated in today’s mess where millions of people who should never had a home loan and now losing their homes.
The large increase in home loans thus created by these new programs allowed Fannie Mae, the largest home finance company, to grow at a rapid rate. As they grew the payment for the Director, Mr. Raines grew proportionally.
While these bonuses meant millions for Mr. Raines it was apparently not enough so he adjusted the books to move money from one year to the next to increase the bonus many times over and for this maneuver he received $90 million in bonus money by overstating earnings by 6.3 billion dollars.
Civil charges were filed against Raines and he had to pay a fine of 3 million which by the way was paid by the Fannie Mae insurance company, plus donate 1.3 million in stock and give up another 5 million in benefits.
Here is a follow up posted in April of 2008.
WASHINGTON — Former Fannie Mae chief Franklin Raines and two other top executives have agreed to a $31.4 million settlement with the government announced today over their roles in a 2004 accounting scandal.
Raines, former Fannie chief financial officer Timothy Howard and former controller Leanne Spencer were accused in a civil lawsuit in December 2006 with manipulating earnings over a six-year period at the company, the largest U.S. financer and guarantor of home mortgages.
Raines, a Seattle native and prominent Washington figure who was President Clinton's budget director, is relinquishing company stock options, proceeds from stock sales and other benefits. His part of the settlement is worth $24.7 million,
If you do the math you see he came out about 60 million ahead and no criminal charges were ever filed.
As you watch the news each day and see the number of poor working stiffs who are losing their home you can comfort yourself with the knowledge that Mr. Raines is living on easy street.