(Move over, AIG, this is the next outrage. – promoted by David Dayen)

Fool us once, shame on you.  Fool us twice, shame on us.  Given the intense public backlash against the shameful AIG bonuses, it is unthinkable that Fannie Mae would now award million dollar bonuses to four of its top executives.  According to recent news reports, Executive Vice Presidents Kenneth Bacon, David Hisey, Michael Williams, and Thomas Lund will each receive over $1 million in bonuses.  This is unacceptable.

Let’s not forget that Fannie Mae failed last year.  At least $15 billion of precious taxpayer dollars have been injected into Fannie Mae to keep it afloat, and hundreds of billions more are being used to guarantee their loans.  We fire executives for bad judgment.  It is beyond bad judgment for any of Fannie Mae’s executives to accept their million dollar bonuses.  There are many Wall Street executives without a job right now who will happily take top positions at Fannie Mae without the need for million-dollar bonuses.

Fannie Mae executives should already be on thin ice for coming out with guidelines that reward speculators and investors.  The Fannie Mae guidelines issued on March 4, 2009 allow speculators with second homes and investment properties to take advantage of the refinancing component of President Obama’s Making Home Affordable plan.  This directly contradicts President Obama’s repeated statements that his plan will not reward speculators.  Fannie Mae needs to follow the President’s public statements and revise the guidelines immediatley.

We need to clean house on Wall Street.  We need a cultural change where taxpayer interests are placed above corporate greed; where homeowners’ interests are placed above speculators’ interests; and where common sense prevails over utter stupidity.  

I call on Fannie Mae executives to return any bonuses they receive while their company is being propped up by taxpayer dollars.  If they do not, they should be fired.

Ted W. Lieu (D-Torrance) is Chair of the Assembly Rules Committee and former Chair of the Assembly Banking and Finance Committee.  He is the author of the landmark California Foreclosure Prevention Act, which was signed into law last month.