Legal Fees Top $100M for Ex-Fannie and Freddie Executives, and Taxpayers Cover the Tab
Posted Feb 22, 2012 7:08 AM CST
By Debra Cassens Weiss
Legal fees for former executives of Fannie Mae and Freddie Mac have totaled $109 million since 2004, and taxpayers are advancing the money.
A report by the inspector general of the Federal Housing Finance Agency says contracts calling for payment of the fees could have been repudiated when Fannie and Freddie were taken over in 2008, the New York Times reports. The agreements remain, however.
Though the contracts provide that the legal fees must be repaid if courts rule against the executives, it’s unlikely they would be able to repay such large amounts, the Times says.
Fees for just three executives exceeded $99 million since 2004, and the total for all formal officials is $109 million, report the Associated Press and the Wall Street Journal (sub. req.). Since the 2008 rescue, the tab for all the executives’ fees has amounted to about $50 million, the Times says.
Several former executives are facing shareholder lawsuits and civil fraud charges by the Securities and Exchange Commission. The SEC suit claims six former executives downplayed the risks of subprime mortgages held by the mortgage giants.
The bailout of the mortgage giants has so far cost about $150 billion, AP says.