BONUS APPROVAL FOLLOWS TREASURY LIFTING ALL RESTRICTIONS ON FANNIE MAE & FREDDIE MAC ACCESS TO TAXPAYER FUNDS

Washington, Jan 14, 2010 - WASHINGTON, JAN. 14, 2010 – “The American taxpayers already have given Fannie Mae and Freddie Mac $110 billion and assumed a liability of $2 trillion in potential losses through various government guarantee programs,” said Stearns. “Then the Treasury Department lifts all restrictions on the amount of taxpayer funds available to these two entities. Now we learn that Treasury approved compensation packages for the executives at Fannie Mae and Freddie Mac that could reach as much as $6 million each. All of this occurred without any proposal to reform Fannie Mae and Freddie Mac, which pose an unlimited financial risk to the taxpayers.” 

Added Stearns, “No top executives at Fannie Mae or Freddie Mac were fired, there is no accountability for the failures at these entities. The unemployment rate in Florida is over 11 percent, and even higher in my district, and Treasury is approving millions of dollars in bonuses for those who created the problems.”

Stearns joined in sending a letter* to Treasury Secretary Timothy Geithner requesting his justification for approving the compensation packages and his plan to reform the two entities. The letter states, “Awarding lavish pay packages with hefty bonuses to government owned entities while still lacking a comprehensive plan for reform demonstrates a disconcerting lack of judgment on the part of the Treasury Department and the Federal Housing Finance Agency.” The letter continues, “Nothing is more urgent than restructuring Fannie Mae and Freddie Mac and putting a stop to the taxpayer funded bonuses and bailouts.”