Friday, April 15, 2005

Ken Lay vs. Franklin Raines

Chances are you've heard of Kenneth Lay. He was the CEO of Enron when it overstated its earnings by $567 million, causing the stock to tank and costing many investors and employees their savings. One could not even turn on the news or read a newspaper without something about Enron. The fact that it was located in Texas, donated to President Bush's campaign or had any ties with Dick Cheney was BIG news. In fact, you pretty much had to live on Mars to have not heard about Ken Lay and Enron.

Now, can anyone tell me who Franklin Raines is? Never heard of him? Don't worry, you're not alone. Even if you turn on the evening news or read the local daily paper, you probably still would not have heard of him. I only heard of him through Dan Gainor. Franklin Raines was the CEO of Fannie Mae, the federal home mortgage company. Under the leadership of Mr. Raines, Fannie Mae had accounting errors totalling around $11 Billion! Gainor puts it as "more than 19 times larger than Enron's error." 19 times larger than Enron's error?!?!? This has got to be a financial scandal of Oil for Food proportions! Given the amount of coverage Enron received the past couple of years, Fannie Mae has got to be on the cover of just about every magazine and newspaper, not to mention the top story on CNN, ABC, CBS, NBC, MSNBC and other MSM outlets! It's not? Why not?

Gainor quotes Charles Gasparino to explain why not. Gasparino is a reporter from Newsweek who describes Fannie Mae as a "politically correct company" that "do(es) the things liberal reporters like, like putting home mortgages out there for poor people." There you have it. You see, if a company loses or misstates billions of dollars in earnings, costing investors billions in stock losses it is not much of a scandal if it is "a politically correct company." Therefore, it gets ignored in the MSM. Will the whistleblower on this scandal be named Time Magazine's Person of the Year like the Enron whistleblowers? Yeah, right.


Post a Comment

<< Home