Fannie Mae-No Politics (FNMA)

[navycmdr]

Testimony by Ms. McFarland, chief financial officer CFO - of Fannie
at the time of the profit sweep, appears to conflict with Mr. Ugoletti’s
declaration. In a heavily redacted court document, lawyers for
Fairholme noted,

“In light of Ms. McFarland’s testimony, Mr. Ugoletti’s sworn statement
that neither agency envisioned recognition of the deferred tax assets
is not credible.”

The testimony upon which those conclusions were based was blacked out.

The court document suggests that Ms. McFarland testified that she told
officials at F.H.F.A. about the impact the deferred tax asset would have
on the company’s net worth.

Mr. Ugoletti’s calendars, also obtained under the Freedom of Information Act,

show Ms. McFarland meeting with him on July 12, 2012, about a month before

the profit sweep was announced.



Documents show that as early as June 2011, more than
a year before the profit sweep, the Treasury had been told the
companies were improving and that their tax assets could generate
significant value.

That discussion occurred in a private meeting with a group
of restructuring experts, from Blackstone, the financial services
giant, and Skadden, Arps, Slate, Meagher & Flom, a New York
law firm.

https://www.nytimes.com/2015/12/13/business/fannie-and-freddies-government-rescue-has-come-with-claws.html

Mario Ugoletti, former special adviser to the director of the FHFA, said

that at the time of the profit sweep, the FHFA and the companies

“had not yet begun to discuss whether or when the enterprises would

be able to recognize any value to their deferred tax assets.”

Mr. Ugoletti added that the profit sweep was

not intended to “increase compensation to Treasury.”

Mr. Ugoletti, who resigned as interim ombudsman at FHFA this fall,

did not respond to a request for comment.

But documents cast doubt on Mr. Ugoletti’s declaration. They also raise questions about the government’s contention that Fannie and Freddie were in a death spiral when the Treasury began taking all their profits, an argument the government initially made in answering the legal challenge in Federal Claims Court.