and others that the company’s accounting system was flawed and manipulative. In a state ment submitted to a House Financial Services subcommittee, he said, “Although Fannie Mae is a company that receives accolades for providing a diverse and positive work environment, it is also plagued by a corporate culture that uses threats, intimidation, and reprisal to create an atmosphere where even those employees with great integrity — employees who rightfully feel duty-bound to report improprieties and irregularities — cannot risk doing so, fearing the retaliation that they know will follow.” Sources close to the situation report he received a settlement of more than $1 million after threatening a whistle-blower lawsuit citing racial discrimination.
Rep. Artur Davis (D-Ala.), who sits on the House Financial Services Committee, says that OFHEO put Fannie Mae’s directors in an untenable position. “The reality is Frank Raines was forced out, pushed out. The regulator almost dictated his departure before the SEC, the Justice Department, Congress, and the board had a chance to make an assessment of Raines’ conduct.”