Politically-Correct Retention Bonuses

Glenn Beck reported a story last night regarding some $210MM in retention bonuses being paid to employees of Fannie Mae and Freddie Mac, the two GSE's which are now government-owned, having lost tens of billions of dollars through the purchase and securitization of too-risky mortgages. The GSE's were, in fact, key players, along with their Congressional patrons, in causing the financial services meltdown of last year, Wonderboy's recent exclusive blaming of private firms to the contrary.

Curious about this, as these bonuses drew very little public media attention, versus, say, the recent, smaller AIG retention bonuses, I Googled the subject.

There are several results for the search, most prominently this one in the NY Times. It reads, in part,

"Fannie Mae and Freddie Mac, the two troubled companies at the heart of the nation’s mortgage market, are set to pay their employees “retention bonuses” totaling $210 million, despite calls from lawmakers to cancel the payments.

The bonuses, which were made public on Friday, were defended by the companies’ federal regulator, James B. Lockhart, who said he intended to let them proceed.

In a letter sent last week to Senator Charles E. Grassley, an Iowa Republican, Mr. Lockhart disclosed that 7,600 Fannie and Freddie workers were scheduled to receive payouts aimed at retaining those “employees most critical to keep and difficult to replace.” Under the plan, 213 employees will receive retention bonuses worth more than $100,000 this year, and one Freddie Mac executive will receive $1.3 million.

Mr. Lockhart’s defense of Fannie and Freddie’s bonuses has made him a lightning rod for legislative criticisms. It is also beginning to draw questions about why President Obama has not replaced the regulator, who was appointed by President Bush. The law creating Mr. Lockhart’s office, the Federal Housing Finance Agency, established him as the lead regulator until his successor is named by the president and confirmed by Congress.

By failing to name a successor, say observers, the White House is implicitly backing Mr. Lockhart’s stance on the Fannie Mae and Freddie Mac bonuses, which stands in stark contrast to President Obama’s criticisms of the A.I.G. payments.

“This is a de facto White House endorsement of these payments, which is a little odd considering that everyone spent days talking about how they were shocked by the bonuses given to A.I.G.,” said Karen Shaw Petrou, a managing partner at Federal Financial Analytics, a consulting firm in Washington and a longtime observer of the companies. “It’s also a tempest in a teapot. We should worry less about $210 million in bonuses, and more about the fact that these companies are sitting atop $5 trillion of risks, and if they stumble, the American economy could disappear.” "

Is this for real? It's just unbelievable, after all the media coverage the smaller AIG payments received.

After Wonderboy incited public ire and lynch mobs over the reasonable payments to employees cleaning up the AIG-FP mess, he now goes silent over Congressionally-backed GSEs paying even more to their employees. And, to my knowledge, none of the Fannie or Freddie people got fired for their mistakes. Frank Raines got a huge payout for essentially ruining Fannie and bribing Congress to let him get huge bonuses.

But Raines is ethnically similar to Wonderboy, and backed his campaign, so, you know, it's okay.

That's the way things work in our new, post-partisan political world down in Foggy Bottom.