company maintains that its financial power keeps interest rates low and its high profits feed housing initiatives for the poor.
Bruce Martin, executive director of the Collective Banking Group of Prince George’s County in Maryland, which worked with Fannie Mae to help people buy homes, says, “Fannie Mae, under Raines’ watch, has reached all-time records for homeownership in the minority community.”
Rep. Richard H. Baker (R-La.), chairman of the subcommittee, and Rep. Michael Oxley (R-Ohio), chairman of the House Finance Committee, called OFHEO’s report troubling, but Rep. William Lacy Clay Jr. (D-Mo.) accused the lawmakers of being disingenuous. “We are rushing to judgment,” Clay told his colleagues. “Maybe this hearing agenda … is about the political lynching of Franklin Raines. We are having a trial without due process.”
Fannie Mae neither admits nor denies wrongdoing. Raines, 55, co-chairman of the Business Roundtable and board member of Pepsi, Pfizer, and TIAA-CREF, is on BE’s 2002 list of Wall Street All-Stars. Before the probe, he was on a short list for posts in a Kerry administration, possibly as Treasury secretary.
Raines said, “Some people have mistakenly concluded that the company’s agreement with OFHEO constituted an admission (of guilt). … Let me clarify: This is not the case.”
While some speculate as to whether Raines can weather this storm, Rep. Harold Ford Jr. (D-Tenn.) said Raines’ character is not in question. “It will take a lot to diminish his credibility and reputation.” But Ford added, when it comes to Fannie Mae and its regulators, “Both sides have a lot of explaining to do.”