Theodore Olson, a former solicitor general who has represented both George W. Bush and same-sex marriage plaintiffs in blockbuster legal cases, is rising up against the federal government’s handling of Fannie Mae and Freddie Mac profits, calling the conduct “intolerable.” The private investors whom the government asked to shore up the federally-backed mortgage holders are being cheated out of property and potential gains, he said in a Wall Street Journal op-ed.
“Taxpayers should get their investment back, but once they do, so should the private investors who first came to Fannie and Freddie’s aid,” Olson wrote. “The government’s scheme to wipe out these investors is bad policy and a plain violation of the law that respects private, investment-backed expectations and our constitutional protection of property rights.”
The Gibson, Dunn & Crutcher partner filed a lawsuit, now known as Perry Capital v. Lew, to stop the seizure of profits.
Fannie and Freddie announced a quarterly profit of $8 billion and $7 billion, respectively, last quarter, Olson said, and sent $66 billion to the U.S. Treasury Department as a dividend last month.
“None of this money went to pay down the government’s investment,” Olson said. “Whatever amount of money the government takes out of Fannie and Freddie, the amount owed to the government is never to be reduced, meaning there can never be any recovery for private investors.” [WSJ] – Mark Maurer