[Congressional Record Volume 154, Number 115 (Monday, July 14, 2008)]
[House]
[Pages H6452-H6455]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         AMERICA NEEDS TO KNOW

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, last week's rattling of Fannie Mae and 
Freddie Mac and the failure of IndyMac Bank are the latest wreckage of 
our held-hostage economy enlarged to a trillion-dollar hole. When we 
think about what is happening, the seeds of the ruin were sown in the 
1990s, and those who planted the seeds got rich while pushing America 
financially to the precipice.
  The repeal of the Glass-Steagall Act by Congress in 1999 contributed 
to our financial system's vulnerability. For the first time in a half a 
century, the firewall between banking and commerce was breached. I 
voted against abandoning Glass-Steagall, but the act passed 
overwhelmingly in this chamber by a vote of 362-57 and over in the 
other body, 90-8.
  As a result, the American taxpayers are now being asked to bail out 
Wall Street. The biggest high-risk investment banks and some uninsured 
government instrumentalities are going right to the American people, 
where they said they would never go. As these risky practices were 
standardized, the question is, what happened to the regulatory bodies 
charged with maintaining the safety and soundness of our financial 
system? Why didn't Fannie Mae and Freddie Mac exert due diligence and 
oversight? Where was Treasury's Office of Thrift Supervision?
  What happened to HUD's appraisal and underwriting standards, when in 
1993 and mortgage letter 93-2, and then in 1994, in HUD's mortgage 
letter 94-54, HUD gave authority to lenders like Countrywide to approve 
their own loans and select their own appraisers. Assuming many of these 
loans were moved to market through Freddie Mac and Fannie Mae, why did 
their regulatory standards fall short? Who served on their boards of 
directors and voted for these high-risk practices? How much were those 
boards and executives compensated during those years when these risky 
practices proliferated?
  Evidence is beginning to surface that many of those board members 
personally benefited from their own decisions. Well, through which 
domestic and international institutions were the original mortgage 
securitizations first moved? Which persons and which firms did it, and 
which regulatory agencies sanctioned the process?

[[Page H6453]]

  Why did Treasury's Office of Thrift Supervision fail to bat an eye 
when Superior Bank, one of the first institutions to embark on subprime 
lending, was earning 7\1/2\ times the industry's average return on 
assets? Where was its Chicago Office of Thrift Supervision? When FDIC 
finally caught up and charged Superior in 2001, it was fined $450 
million, the largest fine in U.S. history much.
  But why haven't other hot-dog banks been brought to justice? This 
subprime crises happened because people at the highest levels wilted, 
they placed America in bondage for another generation. The gaming of 
our financial markets is not a new phenomenon, but each crisis seems to 
get bigger, and the big fish, the kingfish, aren't brought to justice.
  All the men and women who served on the boards of Freddie Mac and 
Fannie Mae during the 1990s and voted for these high-risk practices 
should be investigated. They made millions off their stock options and 
industry connections. Are they to remain anonymous to the American 
people who are being asked to pick up their horse dung after the parade 
has gone through town? Who were they, and how did their votes, as board 
members, contribute to this unfolding American tragedy?
  I am going to place in the Record tonight the list of all the board 
members at Freddie Mac from the early nineties until the early 2000s 
and will be placing the same names in the Record for Fannie Mae in 
future days.
  Let me just say that the trillion-dollars debt that is being proposed 
to be financed through the sale of U.S. bonds, let me remind the 
American people, our coffers are empty as a country. Our country will 
borrow more money from foreign interests to close this gap, and our 
children will owe principal and interest to the bondholders, just as 
they paid nearly a quarter trillion dollars on the savings and loan 
crises from the 1980s.
  Let me remind you the meaning of the word ``bondage,'' a state of 
being bound, captive, a serve, subjugated to a controlling person or 
force, subservient, dependent, a bond slave, a lackey.
  What is happening to our country is truly very, very dangerous. This 
never should have happened, and every single person responsible at the 
highest levels in this government, who did not regulate, who did not 
have oversight, who did not properly manage their regulatory systems in 
order to guard against this kind of risk-prone behavior, should be 
investigated, and the American people should know whose bill they are 
paying for. What a tremendous tragedy for our country.

                           Board of Directors

       Leland C. Brendsel, Chairman of the Board and CEO, Freddie 
     Mac.
       George L. Argyros, Chairman and CEO, Arnel and Affiliates.
       Thomas Ludlow Ashley, President, Association of Bank, 
     Holding Companies.
       Armando J. Bucelo, Jr., Attorney-at-law, Law Office of 
     Armando J. Bucelo, Jr.
       John C. Etling, President and CEO, General Reinsurance 
     Corporation.
       Shannon Fairbanks, Managing Partner, Castine Partners.
       David W. Glenn, President and COO, Freddie Mac.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company.
       Barbara C. Jordan, Holder, Lyndon B. Johnson Centennial 
     Chair in National Policy, University of Texas in Austin.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       John B. McCoy, Chairman and CEO, Banc One Corporation
       James F. Montgomery, Chairman and CEO, Great Western 
     Financial Corporation.
       Russell E. Palmer, Chairman and CEO, The Palmer Group.
       Ronald F. Poe, Chairman and CEO, Dorman and Wilson, Inc.
       Donald J. Schuenke, Chairman and CEO, Northwestern Mutual 
     Life Insurance Company.
       Christina Seix, Chairman and CEO, Seix Investment Advisors, 
     Inc.
       William J. Turner, Chairman and CEO, Turner & Partners, 
     Inc.

                Board of Directors (as of March 7, 1994)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W. Glenn, President & Chief Operating Officer, 
     Freddie Mac.
       John C. Edling, President & Chief Executive Officer, 
     General Reinsurance Corporation.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company.
       Jerry M. Hultin, Partner, Warner & Hultin.
       Barbara C. Jordan, Professor of Public Service, University 
     of Texas.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       Raymond J. McClendon, Vice Chairman & Chief Executive 
     Officer, Pryor, McClendon, Counts & Co.
       John B. McCoy, Chairman & Chief Executive Officer, Banc One 
     Corporation.
       James F. Montgomery, Chairman & Chief Executive Officer, 
     Great Western Financial Corporation.
       James B. Nutter, President, James B. Nutter and Co.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, Chairman & Chief Executive Officer, Dorman & 
     Wilson, Inc.
       Donald J. Schuenke, Retired Chairman, Northwestern Mutual 
     Life Insurance Company.
       Christina Seix, Chairman & Chief Executive Officer, Seix 
     Investment Advisors, Inc.
       William J. Turner, Chairman & Chief Executive Officer, 
     Turner & Partners, Inc.

               Board of Directors (as of March 10, 1995)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W. Glenn, President & Chief Operating Officer, 
     Freddie Mac.
       John C. Etling, President & Chief Executive Officer, 
     General Reinsurance Corporation.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company.
       Jerry M. Hultin, Partner, Warner & Hultin.
       Barbara C. Jordan, Professor of Public Service, University 
     of Texas.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       John B. McCoy, Chairman & Chief Executive Officer, BANC ONE 
     CORPORATION.
       James F. Montgomery, Chairman & Chief Executive Officer, 
     Great Western Financial Corporation.
       James B. Nutter, President, James B. Nutter and Co.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, Chairman & Chief Executive Officer, Dorman & 
     Wilson, Inc.
       Donald J. Schuenke, Non-Executive Chairman, Northern 
     Telecom, Ltd.
       Christina Seix, Chairman & Chief Investment Officer, Seix 
     Investment Advisors, Inc.
       William J. Turner, Chairman & Chief Executive Officer, 
     Turner & Partners, Inc.
       Dennis DeConcini, Former U.S. Senator from Arizona.
       Harriet F. Woods, President of the National Women's 
     Political Caucus, Washington, D.C.

                Board of Directors (as of Feb. 1, 1996)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W. Glenn, President & Chief Operating Officer, 
     Freddie Mac.
       Dennis DeConcini, Former U.S. Senator from Arizona.
       John C. Etling, Retired President & Chief Executive 
     Officer, General Reinsurance Corporation.
       Joel I. Ferguson, President. F&S Development Company.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, L.P.
       Jerry M. Hultin, Partner, Warner & Hultin.
       Henry Kaufman, President, Henry Kaufman & Company. Inc.
       John B. McCoy, Chairman & Chief Executive Officer, BancOne 
     Corporation.
       James F. Montgomery, Chairman, Great Western Financial 
     Corporation.
       James B. Nutter, President, James B. Nutter and Co.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, Chairman & Chief Executive Officer, Dorman & 
     Wilson, Inc.
       Donald J. Schuenke, Non-Executive Chairman, Northern 
     Telecom, Ltd.
       Christina Seix, Chairman & Chief Investment Officer, Seix 
     Investment Advisors, Inc.
       William J. Turner, Chairman & Chief Executive Officer, 
     Turner & Partners, Inc.
       Harriett F. Woods, President, Harriett Woods Productions.

              Board of Directors (as of February 1, 1997)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W Glenn, President & Chief Operating Officer, Freddie 
     Mac.
       Dennis DeConcini, Former U.S. Senator from Arizona.
       Joel I. Ferguson, President, F & S Development Company.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, L.P.
       Jerry M. Hultin, Partner, Warner & Hultin.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       Maud Mater, Senior Vice President, General Counsel and 
     Secretary, Freedie Mac.
       John B. McCoy, Chairman & Chief Executive Officer, Banc One 
     Corporation.
       James F. Montgomery, Chairman, Great Western Financial 
     Corporation.
       James B. Nutter, President, James B. Nutter and Company.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, Chairman & Chief Executive Officer, Dorman & 
     Wilson, Inc.
       Donald J. Schuenke, Non-Executive Chairman, Northern 
     Telecom, Ltd.
       Christina Seix, Chairman & Chief Investment Officer, Seix 
     Investment Advisors, Inc.
       William J. Turner, Chairman & Chief Executive Officer, 
     Turner & Partners, Inc.
       Harriett F. Woods, President, Harriett Woods Productions.

              Board of Directors (as of February 28, 1998)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.

[[Page H6454]]

       David W. Glenn, President & Chief Operating Officer, 
     Freddie Mac.
       Dennis DeConcini, Former U.S. Senator from Arizona.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, L.P.
       Neil F. Hartigan, Partner, McDermott, Will & Emery.
       Thomas W. Jones, Chairman & Chief Executive Officer, 
     Salomon Smith Barney Asset Management.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       Maud Mater, Senior Vice President, General Counsel and 
     Secretary, Freedie Mac.
       John B. McCoy, Chairman & Chief Executive Officer, Banc One 
     Corporation.
       James F. Montgomery, Past Chairman, Great Western Financial 
     Corporation.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, Chairman & Chief Executive Officer, Legg 
     Mason Dorman & Wilson, Inc.
       Donald J. Schuenke, Non-Executive Chairman, Northern 
     Telecom, Ltd.
       Christina Seix, Chairman, Chief Executive Officer & Chief 
     Investment Officer, Seix Investment Advisors, Inc.
       Joe Serna, Jr., Mayor, City of Sacramento, California.
       William J. Turner, Co-Manager, Signature Capital, Inc.
       Harriett F. Woods, President, Harriett Woods Productions.

               Board of Directors (as of March 15, 2000)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W. Glenn, President & Chief Operating Officer, 
     Freddie Mac.
       Dennis DeConcini, Former U.S. Senator from Arizona.
       Rahm Emanuel, Managing Director, Wasserstein Perella & Co.
       Joel I. Ferguson, Chairman, Ferguson Development Company.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, L.P.
       Neil F. Hartigan, Partner, McDermott, Will & Emery.
       Thomas W. Jones, Chairman & Chief Executive Officer, Global 
     Investment Management and Private Banking Group.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       John B. McCoy, Retired Chairman & Chief Executive Officer, 
     Bank One Corporation.
       James F. Montgomery, Chairman & Chief Executive Officer, 
     Frontier Bank.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, President, Ronald F. Poe & Associates.
       Stephen A. Ross, Professor, Massachusetts Institute of 
     Technology, Cambridge, Massachusetts.
       Donald J. Schuenke, Retired Chairman, Northwestern Mutual 
     Life Insurance.
       Christina Seix, Chairman, Chief Executive Officer & Chief 
     Investment Officer, Seix Investment Advisors, Inc.
       William J. Turner, Co-Manager, Signature Capitol, Inc.

               Board of Directors (as of March 15, 2001)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W. Glenn, Vice Chairman & President, Freddie Mac.
       Rahm Emanuel, Managing Director, Wasserstein Perella & Co.
       Joel I. Ferguson, Chairman, Ferguson Development Company.
       James C. Free, President & CEO, The Smith-Free Group.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, L.P.
       Neil F. Hartigan, Partner, McDermott, Will & Emery.
       Harold Ickes, Partner, Ickes & Enright Group.
       Thomas W. Jones, Chairman & Chief Executive Officer, Global 
     Investment Management and Private Banking Group.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       John B. McCoy, Retired Chairman & Chief Executive Officer, 
     Bank One Corporation.
       James F. Montgomery, Chairman & Chief Executive Officer, 
     Frontier Bank.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, President, Ronald F. Poe & Associates.
       Stephen A. Ross, Professor, Massachusetts Institute of 
     Technology, Cambridge, Massachusetts.
       Donald J. Schuenke, Retired Chairman, Northwestern Mutual 
     Life Insurance.
       Christina Seix, Chairman, Chief Executive Officer & Chief 
     Investment Officer, Seix Investment Advisors, Inc.
       William J. Turner, Co-Manager, Signature Capital, Inc.

               Board of Directors (as of March 15, 2001)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W. Glenn, Vice Chairman & President, Freddie Mac.
       Rahm Emanuel, Managing Director, Wasserstein Perella & Co.
       Joel I. Ferguson, Chairman, Ferguson Development Company.
       James C. Free, President & CEO, The Smith-Free Group.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, L.P.
       Neil F. Hartigan, Partner, McDermott, Will & Emery, A law 
     firm, Chicago, Illinois.
       Harold Ickes, Partner, Ickes & Enright Group.
       Thomas W. Jones, Chairman & Chief Executive Officer, Global 
     Investment Management and Private Banking Group.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       John B. McCoy, Retired Chairman & Chief Executive Officer, 
     Bank One Corporation.
       James F. Montgomery, Chairman & Chief Executive Officer, 
     Frontier Bank.
       Russell E. Palmer, Chairman & Chief Executive Officer, The 
     Palmer Group.
       Ronald F. Poe, President, Ronald F. Poe & Associates.
       Stephen A. Ross, Professor, Massachusetts Institute of 
     Technology, Cambridge, Massachusetts.
       Donald J. Schuenke, Retired Chairman, Northwestern Mutual 
     Life Insurance.
       Christina Seix, Chairman, Chief Executive Officer & Chief 
     Investment Officer, Seix Investment Advisors, Inc.
       William J. Turner, Co-Manager, Signature Capital, Inc.

               Board of Directors (as of March 15, 2002)

       Leland C. Brendsel, Chairman & Chief Executive Officer, 
     Freddie Mac.
       David W. Glenn, Vice Chairman & President, Freddie Mac.
       Cesar B. Cabrera, President & Owner, Rocca Development 
     Corporation.
       Michelle Engler, Trustee, Investor Series Trust & Member, 
     Boards of Managers, JNL Variable Funds.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, L.P.
       David J. Gribbin III, Managing Director, Clark and 
     Weinstock.
       Thomas W. Jones, Chairman & Chief Executive Officer, Global 
     Investment Management and Private Banking Group.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       John B. McCoy, Retired Chairman & Chief Executive Officer, 
     Bank One Corporation.
       James F. Montgomery, Chairman & Chief Executive Officer, 
     Frontier Bank.
       Shaun F. O'Malley, Retired Chairman, Price Waterhouse LLP.
       Ronald F. Poe, President, Ronald F. Poe & Associates.
       William D. Powers, Principal, Powers, Crane & Company, LLC.
       Stephen A. Ross, Professor, Massachusetts Institute of 
     Technology, Cambridge, Massachusetts, and Co-Chairman, Roll 
     and Ross Asset Management Corporation.
       Donald J. Schuenke, Retired Chairman, Northwestern Mutual 
     Life Insurance, A life insurance company, Milwaukee, 
     Wisconsin, and Non-Executive Chairman, Allen-Edmonds Shoe 
     Company.
       Cristina Seix, Chairman, Chief Executive Officer & Chief 
     Investment Officer, Seix Investment Advisors, Inc.
       Catherine L. Stepp, Co-owner & Vice President, First Stepp 
     Builders, Inc.
       William J. Turner, Co-Manager, Signature Capital, Inc., A 
     venture capital investment firm, New York, New York, and 
     Chairman & Chief Executive Officer, Turner & Partners, Inc.

              Board of Directors (as of January 31, 2004)

       Richard F. Syron, Chairman and Chief Executive Officer, 
     Freddie Mac.
       Cesar B. Cabrera, President, Rocca Development Corporation.
       Michelle Engler, Trustee, JNL Investor Series Trust and 
     Member of Board of Managers, JNL Variable Funds.
       Richard Karl Goeltz, Former Vice Chairman and Chief 
     Financial Officer, American Express Company.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, LP.
       David J. Gribbin III, Former Managing Director, Clark & 
     Weinstock.
       Thomas W. Jones, Chairman and Chief Executive Officer, 
     Global Investment Management.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       Martin L. Leibowitz, Vice Chairman and Chief Investment 
     Officer, Teacher's Insurance and Annuity Association--College 
     Retirement Equities Fund.
       John B. McCoy, Retired Chairman and Chief Executive 
     Officer, Bank One Corporation.
       Shaun F. O'Malley, Retired Chairman, Price Waterhouse, LLP.
       Ronald F. Poe, President, Ronald F. Poe & Associates.
       William D. Powers, Principal, Powers, Crane & Company, LLC.
       Stephen A. Ross, Professor, Massachusetts Institute of 
     Technology.
       Donald J. Schuenke, Retired Chairman, Northwestern Mutual 
     Life Insurance Company, Milwaukee, Wisconsin and Non-
     Executive Chairman, Allen-Edmonds Shoe Company.
       Christina Seix, Chairman, Chief Executive Officer and Chief 
     Investment Officer, Seix Investment Advisors, Inc.
       Catherine Stepp, Vice President, First Stepp Builders, Inc.
       William J. Turner, Manager, Signature Capital, Inc.

              Board of Directors (as of September 1, 2004)

       Richard F. Syron, Chairman and Chief Executive Officer, 
     Freddie Mac.
       Joan E. Donoghue, Senior Vice President and Principal, 
     Deputy General Counsel, Freddie Mac.
       Michelle Engler, Trustee, JNL Investor Series Trust and 
     Member of Board of Managers, JNL Variable Funds.
       Richard Karl Goeltz, Retired Vice Chairman and Chief 
     Financial Officer, American Express Company.
       George D. Gould, Vice Chairman, Klingenstein, Fields & 
     Company, LP.

[[Page H6455]]

       Thomas S. Johnson, Chairman and Chief Executive Officer, 
     GreenPoint Financial Corporation.
       Henry Kaufman, President, Henry Kaufman & Company, Inc.
       William I. Ledman, Senior Vice President of Information 
     Systems and Services, Freddie Mac.
       John B. McCoy, Retired Chairman and Chief Executive 
     Officer, Bank One Corporation.
       Shaun F. O'Malley, Chairman Emeritus, Price Waterhouse, 
     LLP.
       Ronald F. Poe, President, Ronald F. Poe & Associates.
       Stephen A. Ross, Professor, Massachusetts Institute of 
     Technology.
       William J. Turner, Manager, Signature Capital, Inc.

       

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