Golden Fleece Award

WASHINGTON D.C. — Congressman French Hill (AR-02) named the Federal Housing Finance Agency (FHFA) as the latest recipient of the Golden Fleece Award for its failure, as the regulator of the Government Sponsored Enterprises (GSE), Fannie Mae and Freddie Mac, to uphold the congressionally mandated pay cap of $600,000 in compensation for chief executive officers.

"It is unconscionable that GSEs would seek to circumvent the reasonable limits that Congress has imposed after they needed to be bailed out and consequently be placed under government conservatorship," said Congressman Hill. "Arkansans, and all tax-paying Americans, lose when their money is not spent wisely by our government agencies. Our banks should especially be good stewards with the money that they are entrusted with."

In a letter to the Director of the Federal Housing Finance Agency, Mark Calabria, Congressman Hill wrote:


Dear Director Calabria:

I write today to inform you that I am awarding this month’s Golden Fleece to the Federal Housing Agency (FHFA) as the regulator of the Government Sponsored Enterprises (GSE), Fannie Mae and Freddie Mac, for their chief executive officers’ receiving compensation in excess of the $600,000 congressionally mandated cap.

According to two March 26, 2019, FHFA Office of Inspector General (OIG) reports, the GSEs created a new job, “President,” and, in doing so, “acted to circumvent the congressionally manded cap of $600,000 on CEO compensation.” Additionally, according to the OIG reports, “Fannie Mae is now compensating its Interim CEO and President a total of $4.2 million to execute the same responsibilities for which it had previously paid $600,000,” and Freddie Mac, “is paying a total of $3.85 million in compensation for the same set of responsibilities for which it previously paid $600,000.”

When the GSEs were put into conservatorship in 2008, FHFA was given regulatory oversight over executive compensation. According to a November 16, 2015 U.S. House of Representatives Committee report, between 2009 and 2011, FHFA approved tens of millions of dollars in compensation pay for the GSEs’ top 12 executives. Further, according to the same House Committee Report:

In 2012, then-FHFA Director Ed DeMarco capped compensation at $600,000. In early 2015, however, FHFA Director Mel Watt allowed the GSEs to raise their CEO pay to as much as the twenty-fifth percentile of comparable companies.This ultimately allowed both GSEs to increase their CEO pay from the previous cap of $600,000 to $4 million annually.

Following that action by Director Watt, the House and Senate passed The Equity in Government Compensation Act of 2015 (P.L. 114-93), which prevented FHFA from approving raises for the GSE CEOs from $600,000 to $4 million.

It is stunning that GSE and FHFA leadership would blatantly skirt this congressionally mandated cap after having received nearly $200 billion in bailouts since going under government conservatorship in 2008. As long as the GSEs are in conservatorship, the taxpayers, through the Treasury Department, are on the hook for a $250 billion line of credit. I believe the first obligation of FHFA should be repaying the taxpayers, not violating congressional intent by allowing more than $8 million in compensation for four people doing the same jobs that two people are authorized to undertake for $1.2 million.

I recognize that this decision occurred before your time at FHFA, but while Congress still must work to enact necessary reforms to our GSEs, FHFA must be accountable and responsible for ensuring the protection of our hardworking taxpayers’ dollars. I am committed to eradicating this type of inefficient and ineffective policy by our federal agencies. Should you require any additional authority from Congress to address these concerns, I urge you to notify us as soon as possible. I invite your immediate attention to these concerns, and I look forward to working with you to address this important issue.

Sincerely,
French Hill
Member of Congress




About the Golden Fleece Award

Every year, Congress appropriates trillions of dollars to fund the federal government, and every year the federal government wastes portions of these funds in unconscionable ways. In an attempt to increase accountability for every single government program, Congressman Hill decided to bring back the Golden Fleece Award.

Originally introduced by Democratic U.S. Senator from Wisconsin William Proxmire in March 1975, the Golden Fleece Award was a monthly bulletin on the most frivolous and wasteful uses of hardworking taxpayers’ dollars. The Golden Fleece Award became a staple in the U.S. Senate during this time, and Senator Robert Byrd once stated that the awards were “as much a part of the Senate as quorum calls and filibusters.”

In reviving this idea, the Golden Fleece Award will again have the opportunity to serve as an important reminder to taxpayers about the need for necessary, commonsense reforms to our federal spending.