WASHINGTON (AP) — Four very rich former housing chiefs lined up before a House panel Thursday for a fresh spanking over the nation's economic crisis, but one — former Fannie Mae chief executive Daniel Mudd — captured the attention of Rep. Bruce Braley.
"You are one of those rare people who can say, 'My name is Mudd' with a straight face."
It was one of the low points during a five-hour session of lame duck oversight, a special kind of hearing in which members of an expiring Congress lob questions and vent with little blowback.
There's no more crucial matter before this Congress or the next than the nation's worsening recession and the role that the giant mortgage lenders may have played in it. But in the waning weeks of the 110th Congress, Thursday's session of the watchdog House Oversight Committee was as much about the politicians on the panel as it was about the meltdown affecting millions of Americans.
Signs of political transition were everywhere.
After months of putting off Republican demands for the hearing, Chairman Henry Waxman chose to hold it this week as his own swan song before he departs to head the Energy and Commerce Committee.
Waxman bade farewell by releasing 400,000 documents showing that the CEOs arrayed before the panel ignored warnings that Fannie Mae and Freddie Mac were taking on too many dicey mortgages years before they collapsed and the government took them over.
Waxman did not bother to stay for the whole hearing. And his counterpart, ranking Republican Tom Davis of Virginia, was absent; he already has retired from Congress.
The man likely to replace Davis, Rep. Darrell Issa of California, made his first foray as ranking Republican with a public flogging of the CEOs.
"You're not accepting any blame for this at all," he said. "You're either standing behind the mandate of the Congress or the mandate of your stockholders, perhaps, the mandate of your bonus packages. And you're telling us that, in fact, everyone was doing it."
It didn't seem to matter what Mudd and his colleagues had to say in their own defense. From the Democratic end of the dais to the Republican side, lawmakers asked impossible-to-answer questions or just plain ranted against the CEOs' willingness to lower lending standards to match those of Wall Street banks backing the subprime lending industry.
For good measure, Rep. Lynn Westmoreland, R-Ga., asked the assembled former CEOs to state, out loud, their annual salaries and pensions collected while overseeing the doomed mortgage companies. Freddie Mac's former CEO Richard Syron said he made $4 million a year; Leland Brendsel also of Freddie Mac, said he earned as much as $2 million. Over at Fannie Mae, Mudd said he earned around $7 million. Former Fannie Mae CEO Franklin Raines said he received $90 million, which included some stock options, but had to return 40 percent of it in a settlement over a 2004 accounting scandal.
Rep. Carolyn Maloney, D-N.Y., complained that Syron fired David Andrukonis, his one-time chief risk officer who warned as far back as 2004 that the government-run company was engaging in too many risky loans.
"Do you regret the way you led — and I would say mismanaged — this company?" Maloney demanded.
One-time Democratic presidential contender Dennis Kucinich turned to Mudd with a similar question: Why fire your risk officer and reduce his office's budget?
"Yes or no, did you cut your credit risk officer's budget?" Kucinich demanded.
"As you know, giving an answer, yes or no, to the question would not be accurate," Mudd began, before Kucinich cut him off. Mudd later said that the budget in question was "subsequently" increased.
"Not credible," Kucinich declared, getting in the last word as the time allotted for questioning expired.
Rep. Virginia Foxx, R-N.C., took up her entire five-minutes for questions by scolding the CEOs for not taking responsibility for the failure of their companies.
"I wasn't here when these things were happening," Foxx added.
More than five hours after it began, Rep. Edolphus "Ed" Towns, D-N.Y. and the likely next chairman of the oversight panel, gaveled the hearings closed.
His microphone stayed on as Issa unknowingly leaned over and talked with Towns about how to keep the oversight committee from "getting screwed" next year in a turf battle with House Financial Services Committee Chairman Barney Frank.
Actually, Issa threw down the gauntlet very publicly, in his opening statement.
"I would hope that we will continue in the next Congress to make sure that the Financial Services Committee does not supplant this committee in making sure that government does what it should do not only to encourage and allow homeownership to all but, in fact, to protect the financial system that today is teetering on the edge of yet another precipitous fall."
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