Rahm "Dead Fish" Emanuel, Barack Obama's White House Chief of Staff, was furiously typing away at his Blackberry during the president's press conference on Tuesday. Perhaps he knew this Chicago Tribune story was coming out?
Emanuel made $320,000 during his stint as a board member of mortgage giant Freddie Mac, the board met at most six times a year, but unlike other board members, "Rahmbo" had no committee assignments.
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On Emanuel's watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass.
The accounting scandal wasn't the only one that brewed during Emanuel's tenure.
During his brief time on the board, the company hatched a plan to enhance its political muscle. That scheme, also reviewed by the board, led to a record $3.8 million fine from the Federal Election Commission for illegally using corporate resources to host fundraisers for politicians. Emanuel was the beneficiary of one of those parties after he left the board and ran in 2002 for a seat in Congress from the North Side of Chicago.
The board was throttled for its acquiescence to the accounting manipulation in a 2003 report by Armando Falcon Jr., head of a federal oversight agency for Freddie Mac. The scandal forced Freddie Mac to restate $5 billion in earnings and pay $585 million in fines and legal settlements. It also foreshadowed even harder times at the firm
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1 comment:
Check out Wasserstein Perella, $16.2 million in 2 1/2 years.
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