Chuck Hagel: “the Office of Federal Housing Enterprise Oversight's, OFHEO, findings-to-date report on its ``Special Examination of…”

“the Office of Federal Housing Enterprise Oversight's, OFHEO, findings-to-date report on its ``Special Examination of Fannie Mae'' is deeply troubling. It raises serious doubts about the ability of Fannie Mae's management to correct the safety and soundness problems at Fannie Mae. What is most troubling is that OFHEO had to use subpoenas in order to conduct its congressionally authorized investigation of Fannie Mae. Fannie Mae's resistance to cooperate with this investigation is unacceptable. Based on the findings in OFHEO's report, it is clear why OFHEO's requests were repeatedly rebuffed by a stonewall of silence and why Fannie Mae's management insisted on keeping its financial operations in a black box. OFHEO's report shows among other things that Fannie Mae's top management indulged in a windfall of bonuses after it improperly manipulated the company's annual earnings. If these actions are found to be deliberately linked, then the board of Fannie Mae needs to take appropriate action and address the problem, just as the board of Freddie Mac did last year. The boards of both GSEs have a fiduciary responsibility to their shareholders and the public to ensure that any improper actions by management are dealt with swiftly and accordingly. The confidence in the GSEs has a direct impact on the stability of the American economy. The American people and the markets must have confidence in the operations of the congressionally chartered Fannie Mae and Freddie Mac.”