Fannie Mae is a huge, little—known, legally—favored organization which has long been in the hands of Democrat apparatchiks. The Wall Street Journal has long investigated and raised questions about its accounting practices. yesterday, its president, Franklin Raines, whom even the New York Times was forced to admit was a former high—ranking Clinton Administration official, resigned to take responsibility for massive accounting "mistakes" which overstated earnings, and whose correction now brings FNMA out of compliance with legally required reserves.

This is a scandal easily the equal of Enron. Raines has made scores of millions of dollars as CEO, including ample bonuses, fuelled by phony earnings. His general counsel was Jamie Gorrelick, the "controvrsial" Deputy AG under Janet Reno (long assumed to be the functional AG) and member of the 9/11 commission. FNMA contributes millions of dollars to left wing causes, and has preferential borrowing privileges and federal guarrantees.

Don't expect the press to be eager to report on this massive scandal.

Thomas Lifson  12 22 04