Well, this is just fantastic news. From John Solomon, a former ace investigative reporter for the Associated Press and now executive editor of iWatch News at the Center for Public Integrity, writing at the Daily Beast:
Over the last two years, the Obama administration has approved a whopping $34.4 million in compensation to the top six executives of the financially troubled Fannie Mae and Freddie Mac mortgage giants, and lacks the necessary protections to ensure such compensation is even warranted.
The largesse flowed to the six executives even though the two companies they run struggle to staunch billions of dollars in losses, remain in government conservatorship, and must compensate taxpayers for assuming the companies’ liabilities during the mortgage crisis. To compensate taxpayers, Fannie and Freddie are tapping Treasury Department funds to pay required 10 percent dividends each quarter to the U.S. government.
Where shall we begin? Aside from the dough itself — I’ll get back to that in a moment — we have the always troubling “lacks the necessary protections” that makes far too many appearances in reviews of federal decisions or operations. And we have the recurring theme of this administration allowing bailed-out companies to use Government Money B to make required payments on Government Money A.
But the real kicker for me is this presumptive explanation of the payments from the Federal Housing Finance Agency, or FHFA:
An FHFA spokeswoman told iWatch News the agency had no immediate comment. A Treasury Department spokeswoman did not respond to a request for comment.
The FHFA has defended executive pay at Fannie and Freddie in the past by saying the salaries were necessary to recruit and retain talented executives who can run big, complex companies. (emphasis added)
Hmmm, now where have we heard the “necessary to recruit and retain talented executives” line before? That’s right: From private-sector companies defending the pay of their CEOs to — wait for it — people like President Obama who excoriate said executives for making too much money.
That’s quite a reversal on the usual idea that what’s OK to do with private money is not OK to do with public money. Where, oh, where is the White House Pay Czar when you need him?
– By Kyle Wingfield