IMF NEWS: GSE Preferred Shareholders Rejoice in Release
of New Court Documents. A White House Cover Up ?
By Carisa Chappell cchappell@imfpubs.com
Investors who are suing the government over the terms of the conservatorships of Fannie Mae and Freddie Mac said the 53 documents recently made public solidify their claim that the government-sponsored enterprises had plenty of capital and a government bailout was unnecessary.
The Treasury Department provided the documents to plaintiffs last week as part of a court case in Kentucky. ?The newly de-designated documents also suggest a concerted attempt to cover up these actions by misleading Congress and the public in 2012 and the U.S. District Court for the District of Columbia in 2013,? noted Josh Rosner, managing director of Graham Fisher & Co.
Given that these are the first documents that have been seen by the public which directly implicate former high-ranking White House officials, the behavior exposed in these documents is deeply troubling and raises serious questions about the content of the approximately 12,000 documents on which presidential privilege, deliberative process privilege and attorney-client privilege have been asserted, as well as the propriety of those privilege assertions,? he said.
One of those high-ranking officials is Jim Parrott, former White House housing finance executive and now a fellow at the Urban Institute, who, documents show, revealed in an email on the day the Treasury sweep was announced that the plan was designed so Fannie and Freddie could not repay their debt and escape as it were.
Rosner has spoken at events sponsored by Investors Unite, which bills itself as a GSE shareholder rights organization. Some of IU's members are plaintiffs in lawsuits alleging the net worth sweep agreement that altered the terms of the GSE bailout is illegal. For more on the story, see Inside MBS & ABS.
