Obama’s new Chief of Staff, Rahm Emanuel, was on the Board of Directors of Freddie Mac.
President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.
According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.
Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.” [...]
The actions by Freddie Mac are cited by some economists as the beginning of the country’s economic meltdown.
The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds. [...]
During the years 2000, 2001 and 2002, according to the SEC, Freddie Mac substantially misrepresented its income to “present investors with the image of a company that would continue to generate predictable and growing earnings.”
