We - taxpayers - paid to bail Fannie Mae and Freddie Mac out when they fell victim to the mortgage scams.
Now, according to the New York Times (see http://tinyurl.com/7jxrc3o) we are being fleeced to pay for Fannie and Freddie managers legal fees.
The Times leed (cq) paragraph reads:
- Taxpayers have advanced almost $50 million in legal payments to defend former executives of Fannie Mae and Freddie Mac in the three years since the government rescued the giant mortgage companies, a regulatory analysis has found.
Most businesses have insurance to cover executives and board member legal battles.
Apparently execs at Freddie and Fanny are "uncovered" - leaving the taxpayers' wallet "naked."
According to the Times, "The legal costs are the responsibility of taxpayers because of contracts struck by the companies before they collapsed." The Times goes on to state that if, in the commercial (non-government) world, execs are found guilty in the courts they are normally obliged to repay the company for legal fees. But again, most commercial organizations carry insurance to protect their interests if their executives or board members get into company-related legal hot water.
Lucky taxpayers. We get to bail out the lenders AND pay the legal fees for the managers that allowed the financial disaster to occur.
