A coalition of 17 conservative groups led by the Competitive Enterprise Institute have asked the House Financial Services Oversight & Investigations Subcommittee to demand that the U.S. Treasury Dept. disclose to Congress and the public all documents that pertain to the origins of Treasury’s controversial Third Amendment Sweep of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC).
The letter to Chairman Patrick McHenry and Ranking Member Al Green reflects growing awareness of the secrecy with which the USG has responded to legal challenges to the seizure of private assets as part of the six-year conservatorship of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC). Plaintiffs in several high profile lawsuits expect that discovery could reveal the provenance of the Third Amendment, which diverted all profits to the USG and left hundreds of thousands of zombified shareholders in its wake.
Reputed short-seller Spruce Point Capital Management released its latest short report this week. The firm is shorting Canadian dairy and grocery manufacturer Saputo. Spruce Point chief Ben Axler believes the company is entering a phase of declining growth and highlights the financial stress and growing challenges he sees it facing, not only in Canada but Read More
The U.S. Federal Claims Court mandated that the government must turn over its documents to the court. CEI and others urge that the documents also be shared with Congress and the public.
Fannie Mae, Freddie Mac Profit Sweeps: Press Release from CEI sent to ValueWalk
September 17, 2014
The Competitive Enterprise Institute (CEI), in a coalition of 17 conservative and free-market public policy leaders, sent a letter to Chairman Patrick McHenry and Ranking Member Al Green of the House Financial Services Subcommittee on Oversight and Investigations. The letter urges the subcommittee to demand greater transparency and accountability in response to the federal government’s “Third Amendment,” which infringes on the rights of private shareholders who invested in the government-sponsored enterprises (GSEs) Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC).
Specifically, the letter asks the subcommittee to demand the Treasury Department turn over to the committee, or make public, any and all documents, which could shed light on “the alleged need for and legal rationale justifying the Third Amendment, as well as all documents detailing the Amendment’s development and evolution, such as those customarily contained in the administrative docket for agency rule-making.”
Coalition members include: Competitive Enterprise Institute, 60 Plus Association, American Commitment, American Family Association, Americans for Competitive Enterprise, Blue Ridge Forum, Campaign for Liberty, Citizen Outreach, Council for Citizens Against Government Waste, Institute for Liberty, Less Government, National Center for Public Policy Research, National Tax Limitation Committee, Protect America Today, Small Business and Entrepreneurship Council, Tea Party Nation, and Tradition, Family, Property, Inc.
Competitive Enterprise Institute, By John Berlau
Fannie Mae Freddie Mac Profit Sweeps: Letter to Chairman Patrick McHenry
Dear Chairman McHenry and Ranking Member Green:
As organizations that sh are your goals of transparency and accountability in government and applaud your efforts at oversight, we wish to bring to you a matte r t hat needs your urgent attention. On vital issues relating to the government-sponsored enterprises (GSEs) Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) – issues concerning both government spending, private property and contract rights – the Obama Administration continues to shroud information in secrecy.
In 2012, then Treasury Secretary Timothy Geithner altered the terms of the federal government’s conservatorship over Fannie Mae and Freddie Mac. This “Third Amendment ” to the Restated Senior Preferred Stock Purchase Agreements will require both Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) to turn over to the government any net profits they earn indefinitely, even after taxpayers have been paid back in full. Such a taking is a clear violation of property rights belonging to the Fannie Mae and Freddie Mac’s’ private shareholders – a group that includes American families, seniors and pension beneficiaries. It will also enable unaccountable, off?budget government s pending hikes.
Not only is this Third Amendment an unprecedented power grab that violates shareholder property rights, but the process use d by the Treasury Department to develop the amendment provided n either an opportunity for public comment nor t he customary transparency safeguards that permit we the people to hold our government accountable. To this day , the Amendment’s provenance re mains secret.
The potential seizure of private assets has spawned numerous lawsuits challenging both its constitutionality and lack of statutory authority. Needless to say, it should be incumbent upon the Treasury Department and any other agencies involved to make public all relevant documents associated with the Amendment’s development. Information that come s to light due to the on-going litigation should be made available to the public, but members of Congress also have a responsibility to the public when they perform the vital function of oversight.
We urge you to demand greater transparency an d accountability on this matter by requesting that the Treasury Department turn over to your committee, or otherwise make public, any and all documents shedding light on the alleged need for and legal rationale justifying the Third Amendment, as well as all documents detailing t he Amendment’s development and evolution, such as those customarily contained i n the administrative docket for an agency rule making.
W e note that the U.S. Court of Federal Claims recently issued a discovery order in Fairholme v. United States – one of the ongoing Third Amendment legal challenges – ordering the government to turn over a similar set of documents to the court. We urge you to request these documents be made public in order to further the rule of la w and ensure government accountability.
Thank you for your attention to this crucial matter of government oversight.
John Berlau Andrew Langer
Competitive Enterprise Institute Institute for Liberty
James Martin Seton Motley
60 Plus Association Less Government
Phil Kerpen Amy Ridenour
American Commitment National Center for Public Policy Research
Coley Jackson Lew Uhler
Americans for Conservative Enterprise National Tax Limitation Committee
Donald E. Wildmon JD Gordon
American Family Association Protect America Today
Richard and Susan Falknor Karen Kerrigan
Blue Ridge Forum Small Business and Entrepreneurship Council
NormSingleto n Judson Phillips
Campaign for Liberty Tea Party Nation
ChuckMuth Presto n Noell
Citizens Outreach Tradition, Family, Property, Inc.
Council for Citizens Against Government