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Thursday, July 24, 2014 1:47:41 AM
July 23, 2014 at 5:36 pm
on http://timhoward717.com/2014/07/22/refugeesmedia-and-beyond-1046pm/#comments
Tim, I’m not sure if the attorneys have already seen this, but it may be useful in proving jurisdiction in the Fairholme case (FHFA is supposed to be the conservator and regulator, not Treasury, and this Treasury decision deprived the GSEs of much needed funds, keeping them in “conservatorship” longer – before the third amendment and its sweep):
The document is in the Texas Law Review, Vol. 89:1293 (Google finds it) :
When the Government Is the Controlling Shareholder
Marcel Kahan & Edward B. Rock
Brief excerpt (thanks to valueinvestor.88888 for posting this on the Yahoo FNMA board) :
The Treasury’s political considerations have led it to block profitable actions by controlled firms.
For example, at Fannie Mae, the Treasury vetoed a sale of $3 billion in tax credits to Goldman Sachs and Berkshire Hathaway. Although these tax credits were worthless to Fannie Mae, the Treasury would have lost tax revenues had they been sold to an entity that could use the credits
to offset its taxes. In this way, the financial interests of the Treasury and of Fannie Mae and its (non-governmental) shareholders and creditors were in clear conflict — and the Treasury’s interests prevailed. 52
INFORMATION FROM: law yale edu/doc DRAFT: 11/22/10
When the Government is the Controlling Shareholder
Page 13 Foot Note 52
2 Nick Timiraos, Treasury Blocks the Sale of Tax Credits by Fannie, WSJ Nov. 7, 2009
“Approving the deal could have also furthered a perception that policy makers have taken steps that have favored Goldman ahead of other banks at a time when populist sentiment against Wall Street has surged.”
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