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Fannie regrets golf excursion

An outing that cost $6,000 took place after the firm's seizure by the U.S. It vows to halt such events.

November 05, 2008|The Associated Press

Mortgage finance company Fannie Mae acknowledged Tuesday that it spent more than $6,000 on a golf outing after it was seized by the government earlier this year but said it was halting similar company-sponsored events.

Dallas-Fort Worth-area television station KTVT reported Monday night that Fannie paid for 20 golfers, including several company executives, to attend a Sept. 29 golf excursion in Texas. Fannie Mae, which did not dispute the report, described the event as a mortgage industry customer meeting held twice annually.

"We do regret that the activities surrounding the customer meetings in Dallas may be perceived as excessive," company spokesman Brian Faith said in an e-mail message. "We have ceased all similar activities as those associated with this event, and we regret having not done so in this case."

The report highlights the intense scrutiny surrounding Fannie Mae, especially because the government may have to absorb its losses from the mortgage crisis.

Fannie Mae, based in Washington, D.C., and sibling company Freddie Mac in McLean, Va., were placed under government control Sept. 7. The government may inject as much as $200 billion to stabilize Fannie's and Freddie's finances, though that money has yet to be spent. The mortgage finance giants own or guarantee about $5 trillion of the nation's outstanding mortgages -- nearly half the home loans in the U.S.

The golf outing incident comes after revelations last month that insurance giant American International Group Inc. spent $440,000 on a posh California retreat for its executives, days after the company tapped into an $85-billion government loan to stave off bankruptcy.

In a memo to Fannie Mae managers last week, Chief Executive Herbert Allison's chief of staff told company executives to have all external events reviewed by Allison's office.

"We want to work with you to ensure these events reflect the company's best judgment in this extraordinary environment," Chuck Greener wrote.

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