House Banking Committee Chairman Jim Leach is criticizing the Federal Agriculture Mortgage Corp. for investing two-thirds of its assets in nonmortgage securities.

"Farmer Mac was established by Congress to help the farmer, not stockholders," the Iowa Republican said Wednesday in a prepared statement. "It is simply an abuse of government authority for a GSE to have over half its assets invested in sophisticated arbitrage instruments."

Rep. Leach's comments came after the General Accounting Office released a study showing that Farmer Mac last year invested $931 million in securities other than agriculture-related mortgages. That is up from $155 million in 1996.

A spokesman for Farmer Mac declined to comment, but company president Henry D. Edelman wrote in the letter to the GAO that the investments were necessary to properly manage its balance sheet.

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