Last December, the Obama administration claimed an impressive victory, boasting that bank and auto industry bailouts had netted a $15 billion profit for the taxpayers. Now it is time to claim an even greater victory.
The GSEs (Fannie Mae and Freddie Mac) borrowed $187 billion from the Treasury and have since repaid $225 billion. The administration may rightfully claim that they made a $38 billion profit for the taxpayers, procured for the taxpayers 79.9 percent of the common stock of two of the most profitable companies in the world, rescued the GSEs and saved the housing industry.
But if the administration wants to claim an honorable victory, it must act quickly. Recent shareholder lawsuits have begun to shine a light on all the nefarious back-room dealings between the administration, Treasury and the Federal Housing Finance Agency.
The FHFA is supposed to act as the GSE conservator and is required by law to “preserve and conserve the assets and property of the regulated entity.” Yet the FHFA was criminally negligent when it inexplicably agreed to turn over all future profits of the GSEs to the Treasury. This one-sided agreement (known as the third amendment sweep) is the antithesis of preserving and conserving assets. The sweep is a taking of private property. It is unfair, unconstitutional, and destabilizes the housing market putting taxpayers at risk.
And now, President Obama has invoked executive privilege 45 times in a last ditch effort to hide his dirty dealings and to keep incriminating documents out of the Court of Federal Claims and hidden from the American people.
President Obama, it is time to end the cover-up and do the right thing for America. End the sweep, end the conservatorship, honor the rule of law, and save the American Dream of homeownership.