Rep. Hill's Golden Fleece Spurs Action by Fannie-Freddie Regulator to Close Loophole on GSE Executive Pay
Washington, September 5, 2019
WASHINGTON, D.C. — The Federal Housing Finance Agency (FHFA) issued a new directive that closed a loophole previously allowing executives of the Government Sponsored Enterprises (GSE), Fannie Mae and Freddie Mac, to earn more than the congressionally mandated pay cap of $600,000. In May of this year, Congressman Hill featured this abuse by the GSEs as his monthly "Golden Fleece" recipient.
"I commend FHFA Director Mark Calabria for putting taxpayers first and taking action to crack down on GSE executive salary abuses that I highlighted in my May Golden Fleece award," said Congressman Hill. "When I revived the Golden Fleece award back in 2015, my goal was to bring public attention to government waste, fraud, and abuse—and more importantly, to spur action and fix it. I'm proud to work with leaders like Director Clabria who believe in holding the federal government accountable for ensuring the protection of hardworking taxpayers’ dollars."
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.”
In a May 1, 2019, letter to the Director of the Federal Housing Finance Agency, Mark Calabria, Congressman Hill wrote, "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."