Monday, October 11, 2010

Tom Donilon's Fannie Chapter

President Obama's new National Security Adviser has a dark past.  Tom Donilon worked for Fannie Mae from 1999 to 2005 as a senior executive.  Fannie's leadership committed accounting fraud to maximize executive incentive pay.  A federal investigative report concluded Fannie Mae had an "arrogant and unethical" culture.

This dark group included CEO Franklin Raines and deputies Jamie Gorelick and Tom Donilon.  The asleep at the switch board included Ken Duberstein, James A. Johnson, Stephen Friedman and Fred Malek.

Tom Donilon's lobbying division played hardball with Fannie's regulator.  The report summarized Donilon's e-mail on Feb. 19, 2004:

Do you have any sense of the basis on which the agency believes that it has the authority to mandate practices in this area, hard to believe they have a safety and soundness rationale …There is a huge issue as to multiple enforcement regimes. We should speed up our work on the interaction between bank regulators and the SEC … When does Russ [Bruemmer, of WilmerHale] think that we should go into OMB? …Should we start working with the BRT [the Business Roundtable], Chamber [the U.S. Chamber of Commerce], ABA [the American Bankers Association] etc. now? Tom."

The WilmerHale link is interesting, given Jamie Gorelick's leaving Fannie for a spot with the law firm.  Donilon went on to secure the obscene consulting agreement with James A. Johnson.  Tom also wrote scripts for the Board's Compensation Committee meetings.

Tom Donilon's division engineered an effort to discredit the investigative agency prior to release of a damaging report.  Fannie was successful in getting the undermining report posted on a Congressional website for an hour.  Fannie Mae downloaded and distributed what they hoped would be a "face saving" document.

Now that the deficit is America's greatest threat, will National Security focus on white collar criminals, who steal for personal enrichment from shareholders, customers and sometimes the taxpayer?  While the best computer security person may be an ex-hacker, the prospect of Tom Donilon's public service makes me nervous.

1 comment:

joseph p bell said...

fannie mae 'russell bruemmer wilmer hale dorr cutler pickering ( + Dan Marcus , Robert Mueller , Jamie Gorelick ';partners at wilmers firm .
DOES NOT CORRELATE WITH CONFLICTS IN THE 911 INVESTIGATION . BRUEMMER , former CIA agents ,w orked for the FBI . Marcus ,Mueller , Gorelick were the top 3 investigators . ? should they be taken to court ,and tried has criminals ?