Cornyn Seeks Criminal Inquiry of Fannie, Freddie Executives
Michael R. Crittenden reports on Fannie and Freddie.
A top U.S. Senate Republican called for a criminal investigation into the executives at Fannie Mae and Freddie Mac, marking the latest fallout since the government announced over the weekend it would take the reins of the firms.
Sen. John Cornyn of Texas and vice-chair of the Senate Republican Conference, asked the Department of Justice to investigate possible “accounting fraud and other corrupt practices perpetuated by top executives” at the two firms.
“The public deserves a full understanding of the events surrounding the failure of Fannie Mae and Freddie Mac and, furthermore, corporate executives must be held accountable to the American people,” Cornyn said in a letter to U.S. Attorney General Michael Mukasey released by the senator’s office.
Cornyn referenced the “culture of corruption that plagued these institutions” and raised questions about previous Justice Department investigations of Fannie and Freddie over the last five years in the wake of accounting scandals at both firms.
“Moverover, the efficacy of prior investigations by (the firms’ regulator) and Justice are further called into questions in light of evidence of disturbing allegations of active interference on the part of Fannie Mae lobbyists,” Cornyn said in the letter.
Cornyn’s letter came the day after two top Democrats — Sens. Charles Schumer of New York and Jack Reed of Rhode Island — asked Fannie and Freddie’s regulator to review the executive compensation packages of the companies’ CEOs. Both Fannie CEO Daniel Mudd and Freddie Chairman and CEO Richard Syron are set to step down from their positions as part of the government’s takeover of the two firms.
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