ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Sunday, April 5, 2009

You can't make this stuff up

Aaa Fannie Mae and Freddie Mac, the two bailed-out federal corporations that lost a combined $110 billion last year and are getting another $200 billion from the government this year (on top of $200 billion last year), will shortly be paying out $159 million in retention bonuses.  James Lockhart, the federal overseer of the two mortgage lenders, says that the bonuses are needed to help “keep key staff.”  Echoing AIG’s justification of its own bonuses, which touched off a national firestorm, Lockhart writes:

Keeping the enterprises operating at full speed was best for the housing markets and best for the economy, which clearly also made it best for the taxpayer. And that would only be possible if we retained the Fannie Mae and Freddie Mac teams.

Lockhart has also refused to reveal the names of employees getting the top bonuses, citing "personal privacy and safety reasons."  The New York Times has a PDF of Lockhart's letter here.

[Frank Snyder]

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