Gorelick's Big Paycheck from Fannie Mae

In the recent talk about O'Bama's campaign aide Jim Johnson, and his conflicts of interest when he worked at Fannie Mae, there was revealed this tidbit about former Clinton Administration Deputy Attorney General Jamie Gorelick. She worked at FNMA from 1997 to 2003 as Vice-Chairman and earned a whopping $26,466,384. Not bad for six years of work.

Jamie can include this among her other accomplishments such as setting up a wall between law enforcement and intelligence agencies, that enabled the 9/11 terrorists to operate with impunity in this country for several months prior to the attacks. Jamie has a knack for getting herself appointed to posts for which she is clearly not qualified. She got appointed to the commission that investigated the 9/11 atrocities, when she should have been called as a witness to answer for her foulup. She has no training nor experience in finance, yet she was somehow qualified to be appointed to Vice Chairman of FNMA. During that time, FNMA developed a $10 million accounting scandal that has yet to be resolved.

And of course, Jamie is now representing Duke University in its defense against a lawsuit by 38 former lacrosse players. It seems like whenever and wherever there is a problem, you can find Jamie on the wrong side of it.

So what should be done? Both FNMA and Freddie Mac need to be reorganized from top to bottom. Even though they are theoretically private companies, they have an implicit guarantee of their debts by the federal government. This results in a strong possibility of moral hazard, and attracts outright crooks like Gorelick and Raines to the management of FNMA. The companies should either be fully nationalized, with management salaries in line with civil service standards, or they should be fully privatized and the federal government should announce that it makes no gurantee, either express or implied, of the companies' debts.

FNMA has been a part of the political spoils system of the Clinton Administration. Raines and Gorelick worked there to get their big payoff. The Wall Street Journal article shows how they did it:

Addressing the company's too smooth (and fraudulent) reported earnings growth in the late 1990s and early 2000s, Ofheo reported: "Those achievements were illusions deliberately and systematically created by the Enterprise's senior management with the aid of inappropriate accounting and improper earnings management . . . By deliberately and intentionally manipulating accounting to hit earnings targets, senior management maximized the bonuses and other executive compensation they received, at the expense of shareholders."

I don't see O'Bama nor McCain doing anything constructive about problems like this. Both of those jackasses are merely part of the machine that protects the Washington feed trough. And they put the interests of the citizens of the USA dead last.