Fannie Mae and Freddie Mac Doled Out Big Buck Bonuses

Where's the outrage over this? Freddie Mac and Fannie Mae together issued more than $200 million in bonuses, despite both entities being at the center of the real estate market meltdown and subsequent credit market crisis.

Congress and the Administration were more than willing to plunder those who were entitled to executive compensation and retention pay in the form of bonuses for AIG and other TARP recipients, but they specifically excluded Freddie Mac and Fannie Mae, despite the clear problems in management at both entities.

Mortgage finance giants Fannie Mae and Freddie Mac plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs at the government-controlled companies.

The retention awards for more than 7,600 employees were disclosed in a letter from the companies' regulator released Friday by Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee. The companies paid out nearly $51 million last year, are scheduled to make $146 million in payments this year and $13 million in 2010.

"It's hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year," Grassley said in a statement. "It's an insult that the bonuses were made with an infusion of cash from taxpayers."

Fannie and Freddie declined to comment on Friday. Fannie had disclosed that it plans to pay four top executives at least $1 million each in retention payments that run through February. Freddie has yet to report on which executives are in line for the awards.

The two companies, hobbled by skyrocketing loan defaults, were seized by regulators last fall and operate under close federal oversight with new chief executives installed by the government. Since the takeover, Fannie Mae has received $15 billion in federal aid, while Freddie Mac has received nearly $45 billion.

If those entities were treated like others receiving bailouts, those executives would be hit with the confiscatory taxes. However, Freddie Mac and Fannie Mae get favorable treatment from Congress and the Administration. Something stinks rotten.