Officials say Obama starts search for running mate (X posted from LBN)

Examining Fannie Mae
How a Former Chief Helped Shape The Company's Political Culture

By Annys Shin
Washington Post Staff Writer
Wednesday, May 24, 2006; Page D01

When James A. Johnson walked out of his office as chief executive at Fannie Mae for the last time, in December 1998, the longtime Democratic Party operative and investment banker could look back at his nearly decade-long tenure at the helm knowing the company had lived up to his promises of double-digit earnings growth. The value of its assets had also tripled, and its share price had risen sevenfold.

"Without good numbers, nothing else can get done," he told The Post in 1998.

Good numbers kept Wall Street happy. They paid the light bills for more than 50 partnership offices that represented Fannie Mae around the country. And they made top executives multimillionaires. Johnson received $21 million in his last year as chief executive and a consulting contract worth $600,000 a year.

But when good numbers -- and the bonuses that came with them -- weren't possible anymore, the executives who came after Johnson allegedly rearranged the math and, even after accounting problems were found, used the company's political clout to fend off closer regulation. That was the conclusion of Fannie Mae's chief regulator, the Office of Federal Housing Enterprise Oversight, in a 340-page report that determined the company's $10.6 billion accounting scandal was rooted in a corporate culture that dates back 20 years.

Johnson, now a managing partner with Perseus, a private equity firm and merchant bank, has not been accused of involvement in the accounting irregularities. During the 1990s, he shaped the company's management and culture, mixing a Wall Street-like obsession with meeting earnings targets and the aggressive tactics of a political campaign.

In an interview yesterday, Johnson would not discuss what happened after his tenure and said Fannie Mae's political success was a result of its success in funding home mortgages.

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/23/AR2006052301751.html