WASHINGTON, D.C.--U.S. Senators Mark Begich (D-Alaska) and John Thune (R-S.D.) today spearheaded a bipartisan letter signed by 58 of their colleagues to Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco and Treasury Secretary Timothy Geithner objecting to the recent news that nearly $13 million in bonus pay was approved for 10 executives at Fannie Mae and Freddie Mac.
"I was floored to hear of these bonuses being doled out at this time under these circumstances," Begich said. "When working families across this country are worrying day to day about keeping their jobs and staying in their homes, excessive executive bonuses like these are beyond the pale."
"Taxpayers have already bailed out Fannie Mae and Freddie Mac to the tune of $141 billion-money that will likely never be paid back in full," said Thune. "With the federal debt approaching $15 trillion, the Obama Administration should stand up for American taxpayers and immediately cancel these undeserved $12.8 million taxpayer-funded bonuses for Fannie and Freddie executives."
The letter urges FHFA to make changes to the executive compensation policy to more accurately reflect the mission of the agency. Secretary Geithner was included in the letter due to the role the Treasury Department plays in overseeing taxpayer dollars that were used to bail out Fannie and Freddie.
The full text of the Senators' letter is included below and the signed letter is attached.
November 4, 2011
Mr. Edward DeMarco
Federal Housing Finance Agency
1700 G Street, NW
Washington, DC 20552
Dear Mr. DeMarco:
On November 1, 2011, it was reported that the Federal Housing Finance Agency (FHFA) approved $12.79 million in bonus pay for ten executives at Fannie Mae and Freddie Mac, the Government Sponsored Enterprises (GSEs). At a time when these entities have received nearly $141 billion in taxpayer-provided bailout funding, such excessive compensation seems wildly imprudent. Moreover, the full cost of conservatorship remains a moving target.
We are sincerely concerned about the message this sends to millions of American families when the unemployment rate stands at 9.0% and the housing market remains very weak. As American families are tightening their belts in light of the struggling economy, the federal government must take steps to ensure that the conservatorship is receiving proper oversight. The wasteful nature of these bonuses, however, is a step in the wrong direction.
The idea that Fannie Mae and Freddie Mac, which rely on taxpayer funding to stay afloat, must offer excessive bonuses to its executives to attract effective management strains credulity. We therefore urge you to make substantial changes to the executive compensation policies to more accurately reflect the public mission of your agency and the fiscal reality facing the GSEs and the federal government. We also request an update regarding your actions to reform compensation package protocol and what steps have been taken to address the concerns raised by the FHFA Inspector General in the March, 2011 report "Evaluation of Federal Housing Finance Agency's Oversight of Fannie Mae's and Freddie Mac's Executive Compensation Programs."
Cc: The Honorable Timothy F. Geithner