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Category Archives: Can’t Fix Stupid

Fannie, Freddie execs score $100 million payday

Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.

Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.

NEW YORK (CNNMoney) — Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.

The top five executives at Fannie Mae received $33.3 million in 2009 and 2010, while the top five at Freddie Mac received $28.1 million. And each company has set pay targets of as much as $17 million for its top managers for 2011.

That’s a total of $95.4 million, which will essentially be coming from taxpayers, who have been keeping the mortgage finance giants alive with regular quarterly cash infusions since the Federal Home Finance Agency (FHFA) took control of the companies in September 2008.

Fannie CEO Michael Williams and Freddie CEO Charles Halderman, each received about $5.5 million in pay for last year, and they could receive more when their final deferred compensation for 2010 is set. All the executives receive a significant portion of their pay in the year or years after they earn it.

The CEOs’ pay targets for 2011 are about $6 million a piece, though Halderman might not get much of that money since he’s announced plans to leave Freddie sometime in 2012. He must still be at the company in order to receive the deferred compensation. His base pay for 2011 is $900,000, with most of the rest of his compensation coming in deferred payments.

The salary filings were all made by the companies in early 2011, but received relatively little attention until a recent report by Politico, the political news Web site, which highlighted about $12.8 million in bonuses the executives received for last year.

[To read the rest of this article by Chris Isidore, at CNN Money, follow the link]

Fracking: Gas industry pours $747 million into lobbying and Congress

As the oil and gas industry has turned increasingly to hydraulic fracturing to extract reserves, fears about groundwater contamination from the toxic chemicals used in “fracking” have intensified. And that’s prompted a $747 million spending spree by major industry players in an effort to allay those fears and influence key energy committee members in Congress, according to a new report released by Common Cause.

The report, “Deep Drilling, Deep Pockets,” suggests that the industry is pumping cash into the pockets of lawmakers in much the same way it pumps chemicals into tight shale formations to extract oil and gas. Only what it’s extracting from Congress is loopholes in environmental controls, such as legislation in 2005 that exempted fracking from regulation under the Safe Drinking Water Act.

Common Cause calculates that gas industry leaders have spent $20 million on the campaigns of current members of Congress and another $726 million on lobbying efforts related to fracking over the past ten years. The campaign contributions have increased substantially in recent years, the report found.

Current members of the House Energy and Commerce Committee have been recipients of much of this largesse, with Representative Joe Barton of Texas, the former committee chairman, topping the list with $514,945 in contributions. Only three Colorado lawmakers show up in the top one hundred recipients — Doug Lamborn clocks in at 63rd with a measly $96,600, followed by Michael Bennet (69th, $87,595) and Cory Gardner (79th, $77,500).

But with gas-friendly Governor John Hickenlooper insisting that contamination of groundwater from fracking is “almost inconceivable” and Colorado lagging behind other states in requiring disclosure of the chemicals used in fracking, look for more vigorous lobbying on the issue at a state level as the use of the controversial extraction method continues to expand.

[Read the rest of Alan Prendergast's article on Fracking and the Gas Industry]

Secretive lawsuit could limit access to safety warnings, advocates argue

Businesses have 10 business days to respond to each complaint before it's published. But that's not enough...

Businesses have 10 business days to respond to each complaint before it's published. But that's not enough...

One mystery company really doesn’t want you to hear about complaint that its product allegedly hurt a child.

The unnamed firm has sued the Consumer Product Safety Commission to prevent it from releasing the report to the public as part of a new database of consumer complaints, now available at SaferProducts.gov. It has also asked a federal court in Maryland to seal all court documents related to the case, filed in October.

“This company going to great lengths to keep its name secret,” said Scott Michelman, staff attorney at consumer advocacy group Public Citizen.  Along with the Consumer Federation of America and Consumers Union, Public Citizen filed an objection with the U.S. District Court in Maryland on Oct. 31, asking that the seal request be denied.

The mystery lawsuit threatens the entire concept of publicly available government complaint data, consumer advocates say.

In March, the Consumer Product Safety Commission launched SaferProducts.gov to make it easy to find consumer complaints about products and services. The site was created as the result of a law passed by Congress in 2008 called the Consumer Product Safety Improvement Act.

For the first time, relatively raw complaints — not complaints vetted or confirmed by the government agency — were made public starting in March.

Businesses have 10 business days to respond to each complaint before it’s published. But that’s not enough for the company involved in the complaint, which involves “an incident that allegedly harmed a child,” according to a report in the Washington Post.

The company involved says the lawsuit must not be made public because doing so would effectively publish the consumer complaint it seeks to quash, according to the Post.

Despite all this mystery, the lawsuit represents an important legal crossroads, Michelman said. If a company can sue to keep a complaint out of public eye, the entire concept behind the public database would be threatened, he said.

“If this company is allowed to keep a report of a potentially hazardous product out, it would effectively undermine a tool that Congress ordered created to protect consumers,” he said.

[To read the rest of this article from Bob Sullivan at Red Tape, click the link]