The House Oversight and Government Reform Committee held a hearing Tuesday to explore the collapse of mortgage finance giants Fannie Mae and Freddie Mac. And, as usual, Chairman Henry Waxman, a California Democrat, made sure to have plenty of unflattering documents on hand.
From Waxman's prepared statement:
In another E-mail on July 16, 2007, the same risk officer wrote to Mr. Mudd again, this time complaining that the board of directors had been told falsely that the "we have the will and the money to change our culture and support taking more credit risk." The risk officer wrote:
I have been saying that we are not even close to having proper control processes for credit, market, and operational risk. I get a 16 percent budget cut. Do I look so stupid?
But these warnings were routinely disregarded.
Here's the E-mail that Waxman is referring to: