Just weeks after it was revealed that the top ten executives at Fannie and Freddie received $47.8 million in bonuses while simultaneously asking the U.S. Treasury for an additional $13.8 billion bailout, Fannie and Freddie are now trying to justify why they sent 10 employees to a lavish conference at a cost of $640,000.
Fannie Mae and Freddie Mac spent more than $640,000 this fall to send 100 employees to a Chicago mortgage-industry conference and to host events there, a decision the companies defended amid criticism from a lawmaker.
The Federal Housing Finance Agency, which oversees the government-controlled mortgage-finance companies, outlined the costs in a letter to Rep. Randy Neugebauer (R., Texas), a member of the House Financial Services committee. Mr. Neugebauer, who had sought details on the conference, called the spending “lavish.”
The companies’ top regulator defended the spending as a whole, but said he would apply greater scrutiny to sponsorships and dinner events. “I believe we can and should provide more detailed direction regarding such expenditures in the future,” Edward DeMarco, acting director of the FHFA, wrote to Mr. Neugebauer in the Nov. 23 letter. The letter was released Wednesday by Mr. Neugebauer’s office.
“The cost savings associated with meeting hundreds of customers at one location versus traveling to various locations across the country is significant,” said Amy Bonitatibus, a Fannie spokeswoman. Freddie spokesman Doug Duvall said the event allowed Freddie to meet “with our lender customers in a cost-efficient way. In just two days we held approximately 200 meetings.”As the average American is being crushed by declining wages, higher taxes and increased living costs, Fannie, Freddie and the Federal Housing Finance Agency all make the specious and arrogant argument that the $640,000 travel junket was money spent wisely. Haven’t Fannie and Freddie executives heard of teleconferencing?
Furthermore, Fannie and Freddie dominate the conventional mortgage market since virtually all of their competitors have long since failed. If the employees of Fannie and Freddie need to meet with banking “customers in a cost-efficient way”, tell the customers to travel to Washington.
Fannie and Freddie are still being run by an entrenched bureaucracy, immune to both cost controls or retribution for improper acts. The argument for privatizing both Fannie and Freddie grow stronger with each passing day. Source
