Capitol Hill Showdown Over FannieMae

WASHINGTON - (10/04/04) -- In a dramatic politicalconfrontation just weeks before this year's elections,Congressional leaders will grill top executives of Fannie Mae thisweek over the spreading accounting scandal at the secondarymortgage market giant. Scheduled to testify before the HouseFinancial Services Committee Wednesday are both the regulator, theOffice of Federal Housing Enterprise Oversight, which uncovered theaccounting improprieties, and top Fannie executives, including CEOFranklin Raines, who swore to the accuracy of his company'sfinancials under the Sarbanes-Oxley Act. The hearings promise to bea portend to the future course of both Fannie Mae and its sisterGSE, Freddie Mac, which have been fighting tooth and nail to blocklegislation that would tighten federal oversight over the twocompanies. It will also be a test of Sarbanes-Oxley, aimed atreigning in some of the recent accounting excesses by requiring,among other things, that chief executives personally attest to thetruth of their companies' financial statements. Republican RichardBaker of Louisiana, a leading critic of the two mortgage giants,will preside over Wednesday's hearing.