Kerry Spot    [ jim geraghty reporting ]
[ kerry spot home | archives | email ]

I haven't been following the investigation into the finances of Fannie Mae, but Mickey Kaus notices an important figure who has escaped much scrutiny so far:

Why isn't Raines' overpaid predecessor, former Mondale campaign manager Jim Johnson, catching more of the shame for the Fannie Mae scandal? According to Albert Crenshaw, Johnson was apparently still formally running Fannie Mae when at least one of its questionable moves — failing to take $200 million in losses — took place:

An Office of Federal Housing Enterprise Oversight report in September accused the company of improperly deferring $200 million of estimated expenses in 1998, which allowed management to receive full annual bonuses. Had the expenses been recorded that year, no bonuses would have been paid, the report said.

Fannie Mae reported paying bonuses in 1998 to Johnson, who received $1.932 million; Raines, who then was chairman-designate, $1.11 million...

Even after Johnson stepped down as chairman at the end of 1998, he apparently remained the head of Fannie Mae's Executive Committee. Isn't he accountable? ... It's not as if Johnson is no longer important — a few months ago he was runnng John Kerry's vice-presidential selection operation. Yet, according to NEXIS, Johnson's name hasn't been mentioned in the N.Y. Time's coverage of the mounting Fannie Mae controversy since October 6. ... P.P.S.: Johnson specialized in attempting to protect Fannie Mae's government-subsidy racket by "buying off potential critics with well-publicized good works," including cosponsoring a concert series with the Washington Post, according to this eerily prescient Chatterbox column.

What else has Mr. Johnson been doing recently? Well, he was set to head Kerry's transition team, and was considered a "frontrunner" for Secretary of the Treasury in a Kerry administration, and if not that, a potential White House Chief of Staff. Interestingly, that Washington Post story from late October mentioned the Fannie Mae troubles.

The Globe also called him a "close friend" of Kerry's.

By the way, another figure who got a large bonus while Fannie Mae wasn't reporting losses? "Jamie Gorelick, a former Fannie vice chairman, who has served as deputy attorney general, the Pentagon's top lawyer and a member of the 9-11 commission."

I have yet to find a Kerry statement on the decisions of his "close friend."

[Posted 12/28 10:08 AM]