- - Tuesday, January 10, 2012


CEO in charge after takeover to quit

The executive who was appointed to lead mortgage giant Fannie Mae in 2009 after the federal government seized the company plans to step down as its CEO.

Michael J. Williams announced Tuesday he will continue as CEO and as a director until a successor is found.

“I decided the time is right to turn over the reins to a new leader,” he said in a statement. Mr. Williams, 53, has been a Fannie employee since 1991.

The government rescued Fannie Mae and Freddie Mac in September 2008 after the two mortgage firms absorbed huge losses on risky loans that threatened to topple them.

Since then, a government regulator has controlled the two firms’ financial decisions. Pressure has been building for the government to eliminate or transform the two companies and reduce taxpayers’ exposure to further losses.

So far, Fannie and Freddie have cost taxpayers more than $150 billion — the largest bailout of the financial crisis. They could end up costing up to $259 billion, according to their government regulator, the Federal Housing Finance Agency.

Mr. Williams oversaw the restructuring of Fannie’s foreclosure-prevention efforts and managed the troubled firm’s reorganization and transition to conservatorship.

Freddie’s CEO, Charles E. “Ed” Haldeman Jr., announced in October that he would resign within the next year.

The departures amount to the biggest leadership shakeup for the agencies since their takeover.

Mr. Williams, Mr. Haldeman and other Fannie and Freddie executives faced intense questioning on Capitol Hill in November over tens of millions of bonuses and compensation they had received since 2009. Twelve executives at the firms received roughly $35.4 million in total salary and bonuses in 2009 and 2010. Mr. Williams earned about $9.3 million for the two years.

Members of Congress are seeking to end those bonuses and align salaries with those of other federal employees who earn much less.


Governor eulogizes lawmaker, delays ‘State of the State’ speech

TRENTON — New Jersey Gov. Chris Christie, who had expected to deliver his annual State of the State message to the Legislature on Tuesday, abandoned those plans and instead delivered a eulogy for a Republican General Assembly leader who collapsed at the end of a lengthy session and died.

A somber Mr. Christie appeared before the Legislature on Tuesday, about 14 hours after Assembly Minority Leader Alex DeCroce collapsed and died on the last day of the 214th session.

“As you know, I was to come here today to report on the state of our state,” Mr. Christie told the joint session. “I will fulfill that constitutional obligation by addressing you and our citizens more fully next week. For today, it’s enough to say that the state of our state is getting better. Today our hearts are full of sadness.”

The GOP governor described Mr. DeCroce as a colleague, mentor and friend and told lawmakers the Republican leader died “doing what he loved, serving the people of New Jersey. “

But that “does not lessen the pain,” he said.

On what was to be a day of pomp and circumstance with the swearing-in of new lawmakers, the Legislature largely abandoned its plans in favor of a somber, low-key event.

Assembly Speaker Sheila Y. Oliver broke down as she described Mr. DeCroce as a career public servant of the highest caliber.

The Assembly observed a moment of silence for Mr. DeCroce as the lawmakers were sworn in for a new term. Bagpipes played before the ceremony, and a small bouquet of flowers rested on the late legislator’s empty desk.


House panel advances right-to-work bill

INDIANAPOLIS — A panel of Indiana lawmakers used a window of opportunity Tuesday after Democrats ended a three-day boycott to send divisive right-to-work legislation to the full House of Representatives.

The committee voted 8-5 along party lines to advance a ban on contracts that require workers to pay union fees for representation. Republican Chairman Doug Gutwein and Democratic Rep. David L. Niezgodski periodically shouted each other down as Democrats attempted to introduce a handful of changes to the bill. Other Republicans on the House Employment, Labor and Pensions Committee remained largely quiet through the testy voting session.

Indiana could become the first state in more than a decade to approve right-to-work legislation. National advocates have tried without success to push the measure in New Hampshire and other states following a wave of statehouse victories by Republicans in 2010.

The right-to-work measure is the first bill to be voted on by a House panel this session and could advance to the Senate as early as Friday if Democrats stick around long enough. A boycott by House Democrats last week stalled work on the measure. And Democratic House Minority Leader Patrick Bauer said when his caucus returned to the House chamber Monday the lawmakers may boycott again to block the bill.

Union protesters who packed the House chamber for the vote booed at Republicans and cheered for Democrats.

Mr. Gutwein said Tuesday that a batch of Democratic amendments to the bill were drafted too late to be considered during the voting session.


Judge rejects denial of FOIA request

A federal judge is rejecting the Justice Department’s refusal to turn over records of its criminal investigation into Rep. Don Young’s handling of a Florida highway project, including its decision not to charge the congressman.

The department had denied a government watchdog group’s Freedom of Information Act request in order to protect the Alaska Republican’s privacy rights. But U.S. District Judge Gladys Kessler ruled Tuesday that public interest in the case outweighs Mr. Young’s privacy rights.

Congress asked the Justice Department in 2008 to investigate Mr. Young’s role in securing a $10 million earmark to widen a Florida highway. The project would have benefited a developer who helped raise money for Mr. Young.

Mr. Young was re-elected to a 20th term in 2010 after revealing that the department was not going to charge him.


Herger planning to retire after 13 terms

A campaign consultant for Rep. Wally Herger of California says the 13-term congressman and senior member of the powerful House Ways and Means Committee plans to announce his retirement.

Dave Gilliard said Tuesday that the 66-year-old Mr. Herger will not seek re-election so he can spend more time with his family.

Mr. Herger is the second California Republican to announce this week that he will retire. Rep. Elton Gallegly, who faced a tough re-election battle because of redistricting, also is bypassing another term.

Mr. Herger’s district, which covers much of Northern California, still leans Republican.

Mr. Herger is a conservative who serves as the chairman of the Ways and Means subcommittee with jurisdiction over health issues, such as Medicare and provisions of the tax code pertaining to health care.


Food facility audits largely ignore guidance

Congressional investigators looking into an outbreak of listeria in cantaloupe that killed at least 30 people last year found that third-party auditors who gave Colorado’s Jensen Farms a “superior” rating just before the outbreak largely ignored government guidance on food safety.

A report released Tuesday by the House Energy and Commerce Committee quotes a representative of an auditing company that graded the facility two months before the outbreak as saying that audits are not intended to help clients improve food safety standards. Retailers often rely on such audits to make sure food they buy is safe.

Democrats on the panel asked the Food and Drug Administration to crack down on such third-party auditors, who often are the only outside entities to inspect food facilities.

From wire dispatches and staff reports

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