The US government has sunk almost $100 million into defending a trio of ex-Fannie Mae executives accused of securities fraud, including $37 million since the government took control of the firm, according to a regulatory analysis released today. The Federal Housing Finance Agency is on the hook for those costs because of contracts signed before the federal takeover, the New York Times explains—though the inspector general's report notes that the government could have repudiated those contracts during the takeover, but didn't.
The three executives, Franklin Raines, J. Timothy Howard, and Leanne Spencer, are accused of an accounting fraud designed to maximize their own bonuses. If a jury ruled that they breached their duties with the company they'd have to repay the advances, but the costs have grown so large that taxpayers are unlikely to recoup their money even then. The inspector general acknowledged that the FHFA has few options, but called for greater oversight in the case. (Read more Fannie Mae stories.)