Federal National Mortgage Association (Fannie Mae)
Even though she had no previous training nor experience in finance, Gorelick was appointed Vice Chairman of Federal National Mortgage Association (Fannie Mae) from 1997 to 2003. She served alongside former Clinton Administration official Franklin Raines. During that period, Fannie Mae developed a $10 billion accounting scandal.
On March 25, 2002, Business Week interviewed Gorelick about the health of Fannie Mae. Gorelick is quoted as saying, "We believe we are managed safely. We are very pleased that Moody's gave us an A-minus in the area of bank financial strength – without a reference to the government in any way. Fannie Mae is among the handful of top-quality institutions." One year later, Government Regulators "accused Fannie Mae of improper accounting to the tune of $9 billion in unrecorded losses".
In an additional scandal concerning falsified financial transactions that helped the company meet earnings targets for 1998, a "manipulation" that triggered multimillion-dollar bonuses for top executives, Gorelick received $779,625.
Investigation by the OFHEO detailed in their official report on the accounting scandal in 2006 on page 66 that from 1998 to 2002 Gorelick received a total of $26,466,834.00 in income.
Read more about this topic: Jamie Gorelick
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