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For a guy who made an estimated $90 million dollars at Fannie Mae, which is central to any discussion on the subprime mortgage mess, and was forced out by the board and under investigation by federal regulators for accounting irregularities at the former mortgage giant, he like many other participants in the so-called financial crisis are doing pretty well for themselves. Something not lost on the average American unless that person is supporting Barack Obama for President. More on that later. Among Franklin Raines sweetheart deals is the one he received from regulators for his part in the Fannie Mae debacle. Here are some details from WaPo.

The agreement includes stock options worth $15.6 million at the time they were issued; those options are currently under water. They entitled Raines to buy shares at prices of $77.10 and higher. Fannie Mae’s shares are currently trading at about $29, so the options Raines is surrendering would not produce any benefit to him unless the share price rose dramatically, according to sources familiar with the settlement who spoke on the condition of anonymity because they did not want to be seen as criticizing the regulator.

OFHEO said Raines’s settlement also includes the payment of $2 million to the federal government. That sum would be covered by a Fannie Mae insurance policy, the sources said.

The settlement also includes proceeds from the sale of stock worth $1.8 million, to be donated to programs aimed at assisting financially strapped homeowners. Those are shares Raines had been fighting in court to obtain from Fannie Mae.

He also agreed to part with $5.3 million in other unspecified benefits, OFHEO said.

Raines was one of three former Fannie Mae executives to settle.

While John McCain criticizes Obama for taking advice from Raines and Obama’s legions deny the claim you might want to ask yourself, what exactly does ‘taking calls’ mean in the report below.

In the four years since he stepped down as Fannie Mae’s chief executive under the shadow of a $6.3 billion accounting scandal, Franklin D. Raines has been quietly constructing a new life for himself. He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.

Here is another interesting turn of events for a man who most would have considered being disgraced after the events at Fannie and his part in them.

Case said he asked Raines to come on board at the end of 2004, just a week after he stepped down from Fannie Mae, because he considers him “terrifically thoughtful and intelligent.”

CEOs, board members, politicians and the like are all so cozy. Raines finds more ways to make money right after a forced departure from Fannie. Those offering him an opportunity apparently have a different set of standards than employers who reject applicants for much less significant failures or lapses in judgment. So what does that say about the Obama campaign and is Raines really connected to it?

For the moment and until the next post on this topic, a concluding excerpt from The Boston Globe will serve as the Obama campaign’s stand on Franklin Raines connection as an advisor to them. The Obama campaign responded last night that “Frank Raines has never advised Senator Obama about anything - ever.” Not only is the question about Raines in an advisory capacity important but any other connections to the campaign as well as why Obama is trying so hard to distance himself from Raines. Is it the same reason he avoids answering questions on Ayers, Wright and Rezko? More posts on all this later.

Stanford Matthews
MoreWhat.com

Picture credit: Mr. Raines discussed Fannie Mae’s risk management practices and the importance of sound risk management procedures at a 2002 FDIC conference, how ironic?

This entry was posted on Saturday, October 4th, 2008 at 9:20 pm and is filed under Money Matters, wordpress, Politics, campaign, election, disclosure, ethics, obama. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.