"The decision to deny my request to invite Mr. DeMarco as the Minority Party's witness raises serious questions about the motivation for the hearing, the commitment to transparency in the operations of two government entities, and this Administration's track record in addressing the complex issue of executive compensation at firms that have received extraordinary government assistance."

January 20, 2010

WASHINGTON -Financial Services Committee Ranking Member Spencer Bachus wrote to Chairman Barney Frank today expressing his disappointment that his request for Edward DeMarco, the Acting Director of the Federal Housing Finance Agency (FHFA), to testify at Friday's Full Committee hearing regarding million dollar bonuses was denied. The FHFA approved $6 million compensation packages for Fannie Mae and Freddie Mac's executives on December 24, 2009-the same day the Obama Administration announced that the GSEs would receive a blank check courtesy of taxpayers. To date, Fannie and Freddie have received over $110 billion in taxpayer dollars.

"In light of the Christmas Eve announcement that the FHFA had approved 2010 compensation packages of $6 million each for the chief executive officers of Fannie Mae and Freddie Mac, Mr. DeMarco's participation at Friday's hearing is critical to understanding the underlying issues that will be addressed.  ...The FHFA also approved multi-million dollar compensation packages for a number of Fannie and Freddie's top executives, payable in cash rather than in the type of stock options that have characterized compensation arrangements at other large financial institutions that have received extraordinary government assistance.

"If, as you have indicated, an important purpose of this hearing is to examine how the incentive compensation structures of financial firms may have contributed to excessive risk-taking, there is no better example of misaligned incentives than those that were, and continue to be, in place at Fannie Mae and Freddie Mac."

Click here to view a copy of the letter.