oversight

FHFA's Approval of Senior Executive Succession Planning at Fannie Mae Acted to Circumvent the Congressionally Mandated Cap on CEO Compensation

Published by the Federal Housing Finance Agency, Office of Inspector General on 2019-03-26.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

           Federal Housing Finance Agency
               Office of Inspector General




    FHFA’s Approval of Senior
  Executive Succession Planning at
Fannie Mae Acted to Circumvent the
 Congressionally Mandated Cap on
       CEO Compensation




Evaluation Report • EVL-2019-001 • March 26, 2019
                 Executive Summary
                 Pursuant to the Housing and Economic Recovery Act of 2008 (HERA), the
                 Federal Housing Finance Agency (FHFA or Agency) is empowered to operate
                 the Enterprises “with all the powers of the shareholders, the directors, and the
                 officers” while they remain in conservatorship. With regard to succession
                 planning for Enterprise senior executives, FHFA delegated responsibility to
EVL-2019-001     the respective boards of directors to develop a succession plan for the Chief
                 Executive Officer (CEO) and President positions and to select candidates for
March 26, 2019   vacant CEO and President positions, and the selections are subject to review
                 by FHFA as conservator. According to FHFA, it has, as a practical matter,
                 chosen to approve such selections after review. FHFA has retained the
                 responsibility to approve compensation actions for senior executive officers.

                 In two evaluations that we are issuing today, we reviewed FHFA oversight of
                 the Enterprises’ boards of directors succession planning efforts for the CEO
                 position. This evaluation focuses on FHFA oversight of the Fannie Mae
                 Board of Directors (Board) and a companion report focuses on the Freddie
                 Mac Board of Directors. See FHFA’s Approval of Senior Executive
                 Succession Planning at Freddie Mac Acted to Circumvent the
                 Congressionally Mandated Cap on CEO Compensation, EVL-2019-002,
                 available online at www.fhfaoig.gov/reports/auditsandevaluations.

                 Fannie Mae is in a period of significant transition in its executive and board
                 leadership. According to the former Acting Deputy Director, Division of
                 Conservatorship (DOC) and Special Advisor to the former FHFA Director,
                 Fannie Mae’s then-CEO, who also held the position of President, notified
                 FHFA executives in early 2018 of the likelihood that he would leave Fannie
                 Mae by the end of 2018. He left Fannie Mae in October 2018. Fannie Mae’s
                 Executive Vice President and General Counsel resigned in September 2018.
                 During 2018, four directors resigned from Fannie Mae’s Board, two of whom
                 had served ten-year terms. Another director, who has served on the Board
                 since November 2009 and is the current Board Chair, will likely depart by
                 November 2019.

                 According to minutes of Board meetings and materials provided to us, the
                 Board considered a potential CEO succession plan in 2016. FHFA reported to
                 us that the then-FHFA Director raised the need for succession planning with
                 the Board Chair in 2018, following the CEO’s notice of his likely departure.
                 The Board then resumed consideration of succession planning.

                 In June 2018, the Board Chair, on behalf of the Board, submitted the Board’s
                 written proposed transition plan (Board Transition Plan) for directors and
                 senior executive leadership to FHFA for approval. The Board Transition Plan
                 represented that the statutory cap of $600,000 on compensation for Enterprise
                 CEOs imposed by the Equity in Government Compensation Act of 2015
                 (EGCA) created challenges to recruit internal and external qualified
                 candidates for the CEO position.

                 To address these challenges, the Board Transition Plan recommended
                 a change to Fannie Mae’s management structure by filling the positions of
EVL-2019-001     President and CEO with separate individuals. (Since 2008, those positions
                 had been held by one individual.) According to the Board, this change would
March 26, 2019   “best preserve as much stability and continuity as possible” for Fannie Mae
                 senior leadership and employees, and allay market concerns. The Board
                 nominated Fannie Mae’s Chief Financial Officer (CFO) to the position of
                 President and elevated the Deputy CFO to CFO. Under the Board Transition
                 Plan, certain responsibilities previously executed by the individual holding the
                 CEO and President positions were assigned to the position of President. The
                 Board proposed that the annual compensation for the President position
                 should be no less than Fannie Mae’s most highly compensated Fannie Mae
                 officer, which was then $3.25 million. The former FHFA Director approved
                 the Board Transition Plan in July 2018.

                 We found that FHFA’s approval of the Board Transition Plan acted to
                 circumvent the congressionally mandated cap of $600,000 on CEO
                 compensation. By authorizing Fannie Mae to fill the positions of CEO and
                 President with two separate individuals and transfer substantial
                 responsibilities from the CEO and President to the President position, FHFA
                 permitted Fannie Mae to compensate its President at a level more than five
                 times greater than the statutory cap. After the current President had served in
                 the position for less than seven weeks, the Board approved an 11% increase in
                 the President’s target compensation, raising it to $3.6 million per year, which
                 FHFA approved in October 2018. Fannie Mae is now compensating its
                 interim CEO and President a total of $4.2 million to execute the same
                 responsibilities for which it had previously paid $600,000.

                 FHFA has established internal controls for processing, tracking, and
                 monitoring requests for conservator approval. We found that the then-FHFA
                 Director overrode those controls, which he was authorized to do, when he
                 determined to review the Board Transition Plan directly, without any staff
                 analysis or recommendation. The decision by the former FHFA Director to
                 override established FHFA internal controls for conservator review and
                 approval of an Enterprise request created an information vacuum within DOC
                 and rendered it unable to execute its responsibilities.

                 To address these shortcomings, we recommend that FHFA (1) re-assess the
                 appropriateness of the annual compensation award of $3.6 million to the
                 Fannie Mae President; and (2) establish a process for maintaining and
                 monitoring sensitive conservator requests in its tracking system. In a written
                 management response, FHFA disagreed with our first recommendation and
                 agreed with our second recommendation.

                 This report was prepared by Jon Anders, Program Analyst, with assistance
                 from Philip Noyovitz, Investigative Evaluator. We appreciate the
EVL-2019-001     cooperation of FHFA staff, as well as the assistance of all those who
                 contributed to the preparation of this report.
March 26, 2019
                 This report has been distributed to Congress, the Office of Management and
                 Budget, and others and will be posted on our website, www.fhfaoig.gov.




                 Kyle D. Roberts
                 Deputy Inspector General for Evaluations
TABLE OF CONTENTS ................................................................
EXECUTIVE SUMMARY .............................................................................................................2

ABBREVIATIONS .........................................................................................................................7

BACKGROUND .............................................................................................................................8
      Standards for Internal Control Systems in the Federal Government: The “Green
      Book” ........................................................................................................................................8
      FHFA’s Internal Controls for Conservatorship Decisions .......................................................8
             FHFA, as Conservator, Exercises Sweeping Statutory Powers ........................................8
             FHFA Has Delegated Certain Authorities to the Enterprise Boards ................................9
             FHFA Has Adopted Policies and Procedures to Facilitate its Execution of
             Retained Responsibilities ................................................................................................10

FACTS AND ANALYSIS.............................................................................................................11
      Transition in Executive Leadership at Fannie Mae ................................................................11
      Board Approval of a Transition Plan for Directors and Senior Executive Leadership
      and Submission of this Plan to FHFA for its Approval ..........................................................11
      The Former FHFA Director Overrode Established FHFA Internal Controls for
      Conservator Review and Approval for the Board Transition Plan .........................................14
      The FHFA Director Approved the Board Transition Plan, with Conditions, on July
      24, 2018 ..................................................................................................................................16
      Fannie Mae’s Announcement of CEO Departure, New Leadership Structure, and
      Appointment of a New President on July 23 ..........................................................................17
      FHFA Failed to Log or Track the Conditions Imposed by the Former FHFA Director
      to His Approval of Fannie Mae’s Board Transition Plan and, as a Result, Could Not
      Confirm that Fannie Mae Satisfied those Conditions .............................................................19
      Fannie Mae’s Board Approved a Significant Compensation Increase for the
      President Less Than Seven Weeks After He Was Assigned to the Position, Which
      FHFA Approved .....................................................................................................................20

FINDINGS .....................................................................................................................................22
      1. FHFA’s Approval of the Board Transition Plan Acted to Circumvent the
      Congressionally Mandated Cap of $600,000 on the Compensation for Enterprise
      CEOs. ......................................................................................................................................22


                                             OIG • EVL-2019-001 • March 26, 2019                                                                  5
      2. The Former FHFA Director Overrode Internal Controls for Conservator Review
      and Approval of the Board Transition Plan, and FHFA Failed to Log or Track the
      Conditions Imposed by the Former Director to his Approval of the Board Transition
      Plan. ........................................................................................................................................22

CONCLUSIONS............................................................................................................................22

RECOMMENDATIONS ...............................................................................................................23

FHFA COMMENTS AND OIG RESPONSE ...............................................................................24

OBJECTIVE, SCOPE, AND METHODOLOGY .........................................................................24

APPENDIX: FHFA MANAGEMENT RESPONSE ....................................................................25

ADDITIONAL INFORMATION AND COPIES .........................................................................31




                                             OIG • EVL-2019-001 • March 26, 2019                                                                   6
ABBREVIATIONS .......................................................................

2017 LOI                December 18, 2018, Letter of Instruction to the Fannie Mae Board of
                        Directors

2017 Order              Conservatorship Order No. 2017-003

Board                   Fannie Mae Board of Directors

Board Transition Plan   June 5, 2018, Transition Plan of the Fannie Mae Board of Directors

CEO                     Chief Executive Officer

CFO                     Chief Financial Officer

DOC                     Division of Conservatorship

EGCA                    Equity in Government Compensation Act of 2015

Enterprises             Fannie Mae and Freddie Mac, collectively

Fannie Mae              Federal National Mortgage Association

FHFA or Agency          Federal Housing Finance Agency

Green Book              U.S. Government Accountability Office, Standards for Internal
                        Control in the Federal Government

HERA                    Housing and Economic Recovery Act of 2008

LOI                     Letter of Instruction

OIG                     Federal Housing Finance Agency Office of Inspector General

STAR                    DOC Status Tracking and Reporting System

Treasury                U.S. Department of the Treasury




                           OIG • EVL-2019-001 • March 26, 2019                                7
BACKGROUND ..........................................................................

Standards for Internal Control Systems in the Federal Government: The “Green Book”

FHFA, like other federal agencies, is responsible for implementing and maintaining an
effective internal control system. Standards issued by the Comptroller General of the United
States for internal controls in the federal government are set forth in Standards for Internal
Control in the Federal Government (also known as the Green Book). 1 The Green Book
defines an “Internal Control System” as a continuous built-in component of operations,
effected by people, that provides reasonable assurance, not absolute assurance, that an entity’s
objectives will be achieved. The Green Book explains that an effective internal control
system assists a federal agency in adapting to changing environments, evolving demands,
evolving risks, and new priorities.

We use the standards set forth in the Green Book to assess the adequacy of the policies and
procedures FHFA has put in place to facilitate its administration of the conservatorships of
Fannie Mae and Freddie Mac (the Enterprises) and we review FHFA’s practices against the
internal controls established by its own policies and practices.

FHFA’s Internal Controls for Conservatorship Decisions

      FHFA, as Conservator, Exercises Sweeping Statutory Powers

Created by Congress in 2008, FHFA is charged by the Federal Housing Enterprises Financial
Safety and Soundness Act, as amended by HERA, with supervision and regulation of Fannie
Mae, Freddie Mac, and the Federal Home Loan Bank System. HERA vested FHFA with the
authority to place the Enterprises into conservatorship and granted it sweeping powers to act
as conservator. After FHFA placed the Enterprises into conservatorship in September 2008,
the Agency succeeded to all rights, titles, powers, and privileges of the Enterprises, and of
any shareholder, officer, or director with respect to the Enterprises and their assets. As
conservator, FHFA is empowered by HERA to operate the Enterprises “with all the powers of
the shareholders, the directors, and the officers.” 2 These powers position FHFA to potentially
control every aspect of Fannie Mae’s and Freddie Mac’s governance and operations.




1
  See generally, Government Accountability Office, Standards for Internal Control in the Federal Government
(Sept. 2014) (GAO-14-704G) (online at www.gao.gov/products/GAO-14-704G).
2
    See 12 U.S.C. § 4617(b)(2)(B)(i), (D)(ii).




                                      OIG • EVL-2019-001 • March 26, 2019                                     8
      FHFA Has Delegated Certain Authorities to the Enterprise Boards

Although Congress granted FHFA authority to operate the Enterprises, FHFA determined,
for reasons of efficiency, concordant goals with the Enterprises, and operational savings,
to (1) delegate authority for general corporate governance and day-to-day matters to the
Enterprises’ boards of directors and executive management, and (2) retain authority for
certain significant decisions. 3 Shortly after placing the Enterprises into conservatorship
in September 2008, FHFA issued formal orders to each Enterprise board of directors that
delegated specified general corporate governance authority to them and addressed specific
governance matters. 4 In conjunction with these Orders, FHFA issued to the Enterprises’
respective boards the first Letters of Instruction (LOI) that defined and outlined the scope of
delegated and undelegated authorities. On November 15, 2012, FHFA revised and replaced
the 2008 LOI to provide more specificity regarding the responsibilities of FHFA, the boards,
and Enterprise management.

On July 12, 2017, FHFA issued Conservatorship Order No. 2017-003 (2017 Order) to the
Enterprises’ boards, replacing Order No. 2008-006. The 2017 Order outlines functions,
responsibilities, and authorities of the Enterprises’ boards. The 2017 Order also clarified that
FHFA, as conservator, was exercising its statutory authority under HERA by which it “may,
by regulation or order, provide for the exercise of any function by any stockholder, director,
or officer of any regulated entity for which [FHFA] has been named conservator or receiver.” 5
On June 27, 2018, FHFA issued Conservatorship Order No. 2018-002, replacing the 2017
Order. Order No. 2018-002 carries over all provisions in the 2017 Order with added language
to make the Conservator’s authority more explicit.

On December 18, 2017, FHFA issued another revision to the LOI, replacing all prior versions
(2017 LOI). The 2017 LOI became effective on March 31, 2018. Under the 2012 and 2017
LOIs, FHFA delegated authority to the Enterprise boards of directors to address and resolve
many of the same issues that boards of directors of public companies address and resolve,
save for those matters carved out by FHFA for its review and decision (or for which prior
notice must be provided by the Enterprises).

The Orders and LOIs create significant differences between the responsibilities of Enterprise
directors (for the duration of the conservatorships) and directors of publicly traded companies.

3
 See OIG, FHFA’s Conservatorships of Fannie Mae and Freddie Mac: A Long and Complicated Journey, at
11–12 (Mar. 25, 2015) (WPR-2015-002) (online at www.fhfaoig.gov/Content/Files/WPR-2015-002_0.pdf).
4
  Conservatorship Order No. 2008-006 issued November 24, 2008. For a general discussion of the authorities
delegated by FHFA to the Enterprise boards under its different orders and LOIs, see OIG, FHFA Letters of
Instruction to the Enterprises (July 23, 2018) (WPR-2018-004) (online at
www.fhfaoig.gov/Content/Files/WPR-2018-004.pdf).
5
    12 U.S.C. § 4617(b)(2)(C).



                                  OIG • EVL-2019-001 • March 26, 2019                                        9
In publicly traded companies, directors owe their fiduciary duties of care and loyalty to the
shareholders. Enterprise directors, however, solely owe their fiduciary duties to the
conservator and their authority is limited to the scope of the delegation from the conservator.
Limits of the delegation of authority relevant to this evaluation are succession planning for
directors and senior executive leadership of Fannie Mae and selection of a new CEO and
President. In publicly traded companies, the boards of directors are responsible for succession
planning for directors and senior executive leadership and for selecting a new CEO and
President, as the need arises. Here, FHFA delegated responsibility to the Enterprise boards
(1) to develop a succession plan for board positions, the CEO, and President and (2) to select
candidates for vacant board positions and for the CEO and President positions, and the
selections are subject to review by FHFA, as conservator. According to FHFA, it has, as a
practical matter, chosen to approve such selections after review. FHFA has retained the
responsibility to approve compensation actions for senior executive officers.

    FHFA Has Adopted Policies and Procedures to Facilitate its Execution of Retained
    Responsibilities

Under the Green Book, agency management is responsible for establishing policies and
procedures as an integral part of the agency’s operations. Generally, management implements
“control activities” (the actions management establishes to achieve its objectives) through
written policies.

DOC is tasked with, among other things, evaluating the Enterprises’ requests for
conservatorship approval and facilitating review of such requests and decision-making
processes within FHFA. Consistent with the principles set forth in the Green Book, FHFA
established an internal control framework that includes policies and procedures for processing
formal Enterprise requests for conservator approvals. 6




6
  Those policies and procedures include the LOIs, the Conservatorship Decision Policy, the Conservatorship
Decision Procedure, the Official Documents Policy. The DOC Status Tracking and Reporting System (STAR),
DOC’s internal tracking and reporting system for conservator decisions, is also a part of the internal control
framework.



                                   OIG • EVL-2019-001 • March 26, 2019                                           10
FACTS AND ANALYSIS ...............................................................

Transition in Executive Leadership at Fannie Mae

Fannie Mae is in a period of transition. FHFA’s corporate governance regulations limit
service on Fannie Mae’s Board to ten years or age 72, whichever comes first, unless a waiver
is granted. 7 During 2018, four directors resigned from Fannie Mae’s Board, two of whom
had served ten-year terms. Another director, who has served on the Board since November
2009 and is the current Board Chair, will depart by November 2019, unless a waiver is sought
and granted. Fannie Mae’s CEO and President, who joined Fannie Mae in 2009 as its General
Counsel and was approved by Fannie Mae’s Board and FHFA in 2012 to serve in both the
CEO and President positions, departed in October 2018. 8 Its Executive Vice President and
General Counsel resigned in September 2018.

Board Approval of a Transition Plan for Directors and Senior Executive Leadership and
Submission of this Plan to FHFA for its Approval

We agree with FHFA that the selections of Board members and the CEO “are significant,
foundational decisions for any company” and “remains the case for the Enterprises under
conservatorship.” According to minutes of Board meetings and Board materials, the Board
considered a potential CEO succession plan in 2016. Based on our review of Board and
examination materials, we found that the Board ended its work on succession planning after
2016. The former Acting Deputy, DOC and Special Advisor to the former FHFA Director
(who remains a Special Advisor to the Acting FHFA Director) reported to us that the CEO
notified FHFA executives in early 2018 of the likelihood that he would leave Fannie Mae by
the end of 2018. This Special Advisor recalled that the former FHFA Director discussed the
need for the Board to develop a CEO succession plan with the Board Chair. Board minutes
reflect that the Board resumed its discussions about a CEO succession plan in early 2018.

On June 5, 2018, the Board Chair, on behalf of the Board, 9 submitted the written Board
Transition Plan for directors and senior executive leadership to the former FHFA Director for

7
    See 12 C.F.R. § 1239.20(a)(1).
8
 FHFA, currently the conservator and supervisor for Fannie Mae, is also in the midst of a transition. Former
FHFA Director Melvin Watt departed from FHFA after completion of his five-year term in early January 2019,
and President Trump named the Comptroller of the Currency to serve as Acting FHFA Director until a
permanent Director is confirmed by the Senate. On January 3, 2019, President Trump officially nominated
Mark Calabria to serve as the next FHFA Director.
9
 We found no formal Board resolution or Board minutes reflecting formal review and approval of the
Transition Plan by the Board, prior to submission of it to the former FHFA Director on June 5, 2018. The
Board Chair represented to FHFA that the Transition Plan was submitted on behalf of the Board. Based on his



                                     OIG • EVL-2019-001 • March 26, 2019                                       11
approval. The Board Transition Plan identified changes at the board and management levels
and proposed certain actions to manage those changes.

1. Board transition. The Board Transition Plan recognized both a current vacancy on the
Board and vacancies expected to arise in the near future because several directors were
nearing the end of their ten-year terms. It set forth the steps that the Board was taking to
identify and vet new director candidates for approval by FHFA.

2. Management transition. The Board Transition Plan explained that the Board anticipated
“the likely departure” of Fannie Mae’s former CEO and President. It attributed this likely
departure, in large measure, to the cap imposed by Congress on compensation for Enterprise
CEOs in 2015 (which was $600,000) and the unlikely prospect that the conservatorship would
end in the near future. 10 (The former FHFA Director had previously awarded $4 million
compensation packages to each CEO in July 2015, both of which were suspended by the Act.)
The Board Transition Plan highlighted the 2015 congressional compensation cap on
Enterprise CEOs as the most significant challenge to identify a CEO successor. It advised
that the Board had “little reason to be confident that any” of Fannie’s Mae senior executives
would be willing to take on the “substantial responsibilities and challenges of the CEO”
position in exchange for a “very significant cut in pay,” 11 and asserted that internal
candidates, a “normal source of top leadership in well run companies,” would not likely be
candidates. (The Board Transition Plan included no data to support the Board’s views.) The
Board Transition Plan represented that this statutory cap would also “create potential
challenges in attracting an external candidate with deep financial services expertise” and
meaningful operational experience in a large and complex company. 12

To address these challenges, the Board Transition Plan proffered a change to Fannie Mae’s
management structure: to separate the positions of President and CEO. FHFA, in its
management response, asserts that a “common corporate management arrangement” is to fill

representation, we considered the Transition Plan to have been reviewed and approved by the Board,
notwithstanding the lack of documented approval in Board minutes.
10
   Under the EGCA, Congress set the compensation and benefits for Enterprise CEOs at $600,000 and directed
that such compensation “may not thereafter be increased.” P.L. 114-93, Section 3(a). 12 U.S.C. 4518 note.
11
   Total compensation earned in 2017 for the four highest-compensated Fannie Mae executive vice presidents
ranged from $2.31 million to $3.15 million. See Fannie Mae, 2017 Annual Report on Form 10-K, at 182 (Feb.
14, 2018) (online at www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2017/10k_2017.pdf).
According to Fannie Mae data, 34 Fannie Mae officers and employees received total compensation in 2017
that exceeded the CEO’s salary of $600,000 and 9 Fannie Mae officers and employees received total
compensation greater than $1,000,000.
12
  Another challenge, according to the Board in its Transition Plan, was the January 2019 departure of FHFA
Director Watt because the “CEO effectively works for—and at the pleasure of—the Director of FHFA, as the
conservator” and candidates would want to learn the identity of the new Director before considering the
opportunity.



                                   OIG • EVL-2019-001 • March 26, 2019                                       12
each position with a separate individual and that “it is permissible, and may be appropriate, to
assign some responsibilities and duties that could, or once were, undertaken by the CEO to
other officers, such as a president or executive vice president, who support and are
accountable to the CEO.” We lack sufficient data to reach a determination on the
commonality or advisability of this practice. However, it has not been the practice at Fannie
Mae: since Fannie Mae was placed into conservatorship in September 2008, both positions
had been held by one individual who received one salary.

According to the Board Transition Plan, this structural change would “best preserve as much
stability and continuity as possible” for Fannie Mae senior leadership and employees, and
allay market concerns. It set forth specific responsibilities for the position of President, all of
which had previously been executed by the individual holding both the CEO and President
positions:

   •   Responsible for Fannie Mae’s operations both internally and to market participants;

   •   Manage the ongoing execution of company strategy, policies, and practices approved
       by the Board and CEO, with a focus on internal operations, including plans and targets
       at the business unit level;

   •   Communicate and build commitment to the strategic direction and key policies and
       procedures internally;

   •   Reinforce innovation by engaging with business units and overseeing the Chief
       Operating Officer;

   •   Lead the Management Committee;

   •   Manage resources, commitments, and conflicts across business units;

   •   Manage governance, financial information, and operations across the company; and

   •   Establish and maintain operating systems and company infrastructure to execute core
       business activities.

The Board, in its Transition Plan, envisioned that the position of President would report to the
CEO.

In its Transition Plan, the Board explained that it had considered potential internal candidates
for the position of President and concluded that the best candidate was Fannie Mae’s then-
CFO (Candidate A). The Board proposed that the annual compensation for the President
position should be no less than Fannie Mae’s most highly compensated Fannie Mae officer,
which was then $3.25 million. At the time it made this recommendation, the Board was


                               OIG • EVL-2019-001 • March 26, 2019                                    13
aware that its candidate for this position, the then-CFO, was currently compensated at the rate
of $3.25 million. The Board Transition Plan sought approval from FHFA to separate the
positions “as soon as possible” and to ratify both the Board’s selection of Candidate A for the
President position and compensation for that position. The Board proposed to fill the CFO
position by elevating the Deputy CFO and increasing her compensation, and sought FHFA
approval for those actions.

As the Board Transition Plan explained, the Board envisioned that Fannie Mae would conduct
a “thorough search,” both internally and externally, for a new CEO. It proposed that the CEO
position would continue to report to the Board and oversee the Enterprise’s strategic direction
and control environment. Should the then-CEO depart prior to the selection of a new CEO
candidate, the Board recognized the need for an interim solution. The Board Transition Plan
suggested either that a current director could serve as an interim CEO, or that the President (in
the event FHFA approved separation of that position from the CEO position) could also serve
as interim CEO. It asserted that appointment of an individual to the President position would
“facilitate the potential service of a board member as the Interim CEO” and could expand the
pool of external candidates for the CEO position.

The Former FHFA Director Overrode Established FHFA Internal Controls for
Conservator Review and Approval for the Board Transition Plan

As discussed previously, FHFA has established internal controls for Enterprise requests for
conservator approval. Under FHFA’s procedures, an Enterprise seeking conservator approval
submits a request for conservator decision to FHFA through an electronic portal established
for that purpose. The request is logged and tracked in FHFA’s official internal tracking
system (known as STAR). FHFA personnel are assigned to review the request and prepare
a staff analysis memorandum that includes a recommendation for decision. Typically, the
staff analysis memorandum is circulated among senior Agency stakeholders for review and
revision. The final staff analysis memorandum and supporting documentation are submitted
to the FHFA Director for review and decision, which is communicated to the Enterprise by
email and the STAR system. 13

The Special Advisor reported to us that the former FHFA Director instructed the Board Chair
to submit the Board Transition Plan to him, rather than to submit it through the electronic
portal for staff analysis. The Board Chair followed that instruction and addressed the Board

13
  In a 2012 audit report, we explained the established process used by the then-FHFA Acting Director. See
OIG, FHFA’s Conservator Approval Process for Fannie Mae and Freddie Mac Business Decisions (Sept. 27,
2012) (AUD-2012-008) (online at www.fhfaoig.gov/Content/Files/AUD-2012-008_2.pdf). The former FHFA
Director used a similar process for Enterprise matters requiring conservator approval. See OIG, Compliance
Review of FHFA’s Revised Process for Reviewing the Enterprises’ Annual Operating Budgets (Sept. 19, 2017)
(COM-2017-006) (online at www.fhfaoig.gov/Content/Files/COM-2017-006_Redacted.pdf).



                                  OIG • EVL-2019-001 • March 26, 2019                                        14
Transition Plan, dated June 5, 2018, to the former FHFA Director and caused it to be
delivered that same day. Several days later, on June 11, 2018, the former FHFA Director
advised the Board Chair by email that he had received the Board Transition Plan and he
would treat it as a request for approval and respond within the applicable time parameters. He
confirmed his prior instruction: “[b]ecause of the urgency and sensitivity of the matters
discussed in the [Board Transition Plan], however, we will not process these decisions
through the regular portal process . . .” By deciding to bypass this process, the former
Director opted not to follow FHFA’s established procedures for processing, tracking, and
monitoring requests for conservator approval. The FHFA Special Advisor (and former Acting
Deputy Director, DOC) reported to us that only he and the former FHFA Director had
knowledge of Fannie Mae’s request within FHFA. He provided two explanations for their
determination to override established policy and procedures. 14 First, had Fannie Mae’s
request been submitted through FHFA’s portal and subject to staff analysis, numerous Fannie
Mae and FHFA employees would have been aware of the content of the Board Transition
Plan, which heightened the potential for a leak and public disclosure. Second, public
disclosure of the Board Transition Plan, including the likely departure of Fannie Mae’s CEO,
could cause internal disruption within Fannie Mae management.

In technical comments to a draft of this report, FHFA took issue with our determination that
the former FHFA Director “overrode” internal controls when he directed the Board Chair not
to use the existing process for conservator review and approval. According to FHFA, the
conservator portal “is one process by which the FHFA Director may instruct an Enterprise to
seek conservator approval, but it is not the exclusive method.” We have reviewed numerous
sensitive Enterprise matters where conservator approval is required, such as executive
compensation and annual operating budgets. 15 Where we found that FHFA did not follow its
existing process, such as with review of the annual operating budgets, we recommended that
FHFA strengthen and follow its process, to which FHFA agreed. 16 We note that the Special

14
     OIG did not interview the former FHFA Director prior to the expiration of his term in early January 2019.
15
  See, e.g., OIG, Evaluation of Federal Housing Finance Agency’s Oversight of Fannie Mae’s and Freddie
Mac’s Executive Compensation Programs (Mar. 31, 2011) (EVL-2011-002) (online at
www.fhfaoig.gov/Content/Files/Exec%20Comp%20DrRpt%2003302011%20final%2C%20signed.pdf); OIG,
FHFA’s Exercise of Its Conservatorship Powers to Review and Approve the Enterprises’ Annual Operating
Budgets Has Not Achieved FHFA’s Stated Purpose (Sept. 30, 2015) (EVL-2015-006) (online at
www.fhfaoig.gov/Content/Files/EVL-2015-006.pdf); OIG, Compliance Review of FHFA’s Oversight of
Enterprise Executive Compensation Based on Corporate Scorecard Performance (Mar. 17, 2016) (COM-
2016-002) (online at www.fhfaoig.gov/Content/Files/COM-2016-002_0.pdf); and OIG, Compliance Review of
FHFA’s Revised Process for Reviewing the Enterprises’ Annual Operating Budgets (Sept. 19, 2017) (COM-
2017-006) (online at www.fhfaoig.gov/Content/Files/COM-2017-006_Redacted.pdf).
16
  See OIG, FHFA’s Exercise of Its Conservatorship Powers to Review and Approve the Enterprises’ Annual
Operating Budgets Has Not Achieved FHFA’s Stated Purpose (Sept. 30, 2015) (EVL-2015-006) (online at
www.fhfaoig.gov/Content/Files/EVL-2015-006.pdf).




                                      OIG • EVL-2019-001 • March 26, 2019                                        15
Advisor during his interview did not take issue with the characterization that the former
FHFA Director overrode FHFA’s established procedures for processing, tracking, and
monitoring requests for conservator approval. We do not question that the former FHFA
Director, as conservator of Fannie Mae, had the authority to override established internal
controls. As we discuss shortly, his decision to override those controls caused an information
vacuum in DOC and rendered it unable to execute its responsibilities. According to the
Special Advisor, he and the former FHFA Director reviewed the Board Transition Plan and
discussed it with the Board Chair, 17 and became “comfortable” with it. The Special Advisor
reported that he and the Director relied exclusively on the Board Transition Plan and their
discussions with the Board Chair and did not review supplemental materials. The Special
Advisor stated that no other DOC employees participated in the review process. He
confirmed that no staff analysis memorandum or other FHFA work product was created by
him during his evaluation of the Board Transition Plan.

The FHFA Director Approved the Board Transition Plan, with Conditions, on July 24,
2018

The former FHFA Director formally approved the Board Transition Plan in writing on July
24, 2018, and communicated that approval by email dated July 24, 2018, to the Board Chair.
According to that email, the former FHFA Director approved the Board Transition Plan
because he determined that it was the best means to minimize disruption to Fannie Mae’s
operations in light of the transitions to occur within the Board and the change in the
conservator. The Board Transition Plan, as approved, was to be implemented as “soon as
possible.”

Approval by the former FHFA Director of the Board Transition Plan was conditional upon
completion of specific actions: (1) the Board’s timely development of a proposed plan
to search for a successor to the CEO and submission of that plan to FHFA; (2) FHFA’s
review and approval of that proposed plan; and (3) FHFA’s approval of the CEO candidate
recommended by the Fannie Mae Board and of the terms and conditions of his/her
employment. That approval, and the attached conditions, was not recorded in FHFA’s STAR
system.




17
   The former FHFA Director and Special Advisor did not create any contemporaneous written records of
these discussions or their timing.




                                  OIG • EVL-2019-001 • March 26, 2019                                   16
Fannie Mae’s Announcement of CEO Departure, New Leadership Structure, and
Appointment of a New President on July 23

On July 23, 2018, Fannie Mae issued a press release announcing a new leadership structure. 18
It explained that it had separated the positions of President and CEO and that the President
would report to the CEO. Fannie Mae stated that it had appointed its current CFO to the
President position and that its current Deputy CFO would be promoted into the CFO position,
both effective August 6, 2018. Under this new leadership structure, Fannie Mae’s then-CEO
and President would no longer serve as President, effective August 6, 2018. It also
announced that the CEO had notified Fannie Mae that he decided to step down as CEO by
December 31, 2018, and that the Board would search for his successor.

In this press release and securities filing, Fannie Mae did not disclose the compensation to be
paid to its newly appointed President, effective August 6, 2018.

Prior to August 6, 2018, one individual held both the positions of CEO and President and
was compensated at the annual rate of $600,000 for his services in both positions. As of
August 6, 2018, the responsibilities executed by the then-CEO and President since 2012 were
separated into two positions, to be held by two individuals. Annual compensation for the
CEO continued at the statutory cap of $600,000 and annual compensation for the President
was set at $3.25 million. Accordingly, compensation for execution of the same set of
responsibilities increased from $600,000 to $3.85 million.

In 2015, the former FHFA Director explained that his award of annual target compensation of
$4 million to each Enterprise CEO was designed to “promote CEO retention, allow reliable
succession planning, and ensure the continuity, efficiency and stability of enterprise
operations.” In imposing a compensation cap of $600,000 for Enterprise CEOs, Congress
reasoned that the Enterprises should not pay CEO compensation commensurate with the
private sector because their risk is borne by taxpayers on an ongoing basis and the
conservatorships are not over. 19 As such, Congress implicitly rejected the former Director’s


18
   The former FHFA Director was aware of Fannie Mae’s intent to issue this press release on July 23, 2018,
and took responsibility for failing to communicate written approval of the Board Transition Plan until July 24,
2018. In his July 24, 2018, email conveying his written approval, the former FHFA Director wrote: “in our
effort to get the announcement of the transition plan out yesterday I failed to communicate our formal, written
approval [of Fannie Mae’s request for approval of the transition plan].”
19
  The House Committee on Financial Services explained the need for the Equity in Government
Compensation Act of 2015 in a committee report that accompanied the house bill. In the report, the
Committee referred to the bipartisan disapproval of the former FHFA Director’s decision to allow the
Enterprises to increase CEO salaries. It quoted statements from the U.S. Department of the Treasury
(Treasury) and the White House in support of limits on executive compensation due to taxpayers’ ongoing
backstop of the Enterprises. The report stated that the Enterprises “continue to function in ways unlike private



                                    OIG • EVL-2019-001 • March 26, 2019                                            17
rationale when it imposed a compensation cap of $600,000 on the CEO position. The Board’s
rationale for separating the CEO and President positions and attaching an annual
compensation package of $3.25 million to the position of President was virtually the same as
the one provided by the former FHFA Director in 2015: “to best preserve as much stability
and continuity as possible among our senior leadership team below the CEO level as the
company manages through” transitions at the Board and with the CEO.

According to the Senior Advisor, FHFA did not approve the separation of the positions
of CEO and President and $3.25 million in compensation to the President in an effort to
circumvent the congressional cap on CEO compensation. 20 Regardless of its intent in
approving the Board Transition Plan, FHFA’s approval acted to circumvent the statutory cap
of $600,000. For the past 10 years, the positions of CEO and President had been combined
and held by the incumbent with the titles, “President and CEO.” That incumbent was charged
with executing a bundle of responsibilities and, since 2015, was subject to the statutory
compensation cap. By authorizing Fannie Mae to fill the positions of CEO and President with
two separate individuals and transfer a subset of the CEO’s responsibilities to the President,
we found that FHFA permitted Fannie Mae to pay a total of $3.85 million in compensation for
the same responsibilities for which it had previously paid $600,000.

In its technical comments to a draft of our report, FHFA took issue with this finding. Relying
on the Board Transition Plan, it asserted “the Board also contemplated in the [Board
Transition Plan] that the current President would retain certain nonfinancial responsibilities
that he had performed as CFO.” However, the actual language in the Board Transition Plan
explains clearly that the Board recognized that Candidate A was responsible for “non-
financial responsibilities” and, upon his elevation to the position of President, those
responsibilities would either be “transferred to other executives or retained by” him (emphasis
added). Contrary to FHFA’s claim, the Board Transition Plan acknowledged that Candidate
A’s non-financial responsibilities as CFO could be executed by other executives. We
reviewed the materials prepared by Fannie Mae to support its September 2018 request to
increase the President’s compensation, the Board approval of that increase, and the FHFA
staff analysis memo that recommended approval of the compensation action and found no
suggestion that certain non-financial responsibilities migrated with Candidate A from the




industry.” See House of Representatives, Rept. 114-339 Part 1 (Nov. 16, 2015) (online at
www.congress.gov/congressional-report/114th-congress/house-report/339).
20
   In its technical comments to a draft of this report, FHFA asserted that no credit had been given to
Fannie Mae for a management reorganization that did not increase head count. We do not dispute that this
reorganization maintained executive headcount. However, this report focuses on the compensation to be paid
to Fannie Mae’s President, who is now charged with a subset of the responsibilities that the individual holding
the positions of CEO and President had previously executed.



                                    OIG • EVL-2019-001 • March 26, 2019                                           18
CFO to the President position. Absent supporting documentation provided by FHFA, we
have no basis on which to credit FHFA’s claim.

In its management response, FHFA challenges this finding with a different claim. It asserts
that the express language of the statutory compensation cap and the legislative history of that
statutory cap demonstrate that Congress only intended to impose a cap on compensation for
one position—an Enterprise CEO—and did not constrain the compensation that could be paid
to other Enterprise executives. Applying FHFA’s logic, Fannie Mae could create a number of
additional executive officer positions, assign each position certain responsibilities previously
executed by the CEO, and award compensation for each position well in excess of the
statutory cap. The result of Fannie Mae’s financial engineering caused it to circumvent the
congressionally mandated compensation cap and to pay a total of $3.85 million in
compensation for the same responsibilities for which it had previously paid $600,000.

FHFA Failed to Log or Track the Conditions Imposed by the Former FHFA Director to
His Approval of Fannie Mae’s Board Transition Plan and, as a Result, Could Not
Confirm that Fannie Mae Satisfied those Conditions

The Special Advisor confirmed that the former FHFA Director’s approval of the Board
Transition Plan was subject to three specific conditions, discussed previously. However, we
found that these conditions were not logged in DOC’s STAR system and DOC did not track
whether any of the conditions had been satisfied. Because neither the Special Advisor nor the
former FHFA Director alerted other FHFA employees of Fannie Mae’s request for approval
of its Board Transition Plan nor notified other FHFA employees of the conditional approval
for the Board Transition Plan, the Special Advisor acknowledged that no other FHFA
employee was assigned responsibility to monitor whether the conditions were met.

The current Deputy Director, DOC, who was named in October 2018, reported to us that
he was unaware of: the June 5, 2018, Board Transition Plan; the Board’s request for approval;
the conditional approval provided by the former FHFA Director on July 24, 2018; or the
conditions attached by the former FHFA Director to his approval. The first condition
imposed by the then-FHFA Director was timely development of a proposed CEO search
plan by the Board and submission of that plan to FHFA. The current Deputy Director,
DOC advised us that he had received a draft search plan from Fannie Mae’s Chief Human
Resources Officer but did not know whether the draft search plan was Fannie Mae’s final plan
or whether Fannie Mae submitted this draft search plan for FHFA review and approval.

FHFA’s documents show that the Fannie Mae submitted a draft CEO search plan to the
current Deputy Director, DOC and the Special Advisor, among others, in September 2018.
While Fannie Mae submitted a CEO search plan labeled “final” to the current Deputy
Director, DOC and the Special Advisor in November 2018, we found no evidence that this


                              OIG • EVL-2019-001 • March 26, 2019                                  19
search plan was formally approved by the Board or that Fannie Mae sought FHFA approval
for it. Hence, we found that the first condition was not met. The second condition required
FHFA review and approval of that proposed search plan. We found no evidence to show
that this condition was met. The last condition—FHFA approval of the CEO candidate
recommended by the Fannie Mae Board and of the terms and conditions of his or her
employment—is not ripe because no candidate has been selected.

The decision by the former FHFA Director to override established FHFA internal controls
for conservator review and approval of an Enterprise request created an information vacuum
within DOC and rendered it unable to execute its responsibilities.

Fannie Mae’s Board Approved a Significant Compensation Increase for the President
Less Than Seven Weeks After He Was Assigned to the Position, Which FHFA Approved

As discussed earlier, both the Board and FHFA, in June and July 2019, recognized that the
elevation of the then-CFO to the position of President would entail responsibilities far
different and more significant than his existing position. Nevertheless, the Board
recommended, and FHFA approved, that his compensation for the position of President would
be no less than the most highly compensated officer, which was $3.25 million. Less than
seven weeks after the then-CFO assumed the position of President, with its increased
responsibilities, Fannie Mae management proposed to increase compensation by $350,000. In
its September 20, 2018, recommendation memorandum to the Board’s Compensation
Committee, management wrote that the proposed increase reflected the “responsibilities,
scope and complexity of the President role that he assumed on August 6, 2018,” which were
“significantly larger than that of [the President’s] prior role as Executive Vice President and
Chief Financial Officer.”

Management’s proposed increase of $350,000 was made prior to any performance assessment
of the President and amounted to an 11% increase over the compensation package sponsored
by the Board Transition Plan and approved by the former FHFA Director. 21 According
to management, its proposed increase would place the President’s compensation between the
25th and 50th percentiles of market pay for presidents of other financial firms within Fannie
Mae’s comparator group.

The Board’s Compensation Committee approved management’s proposal on September 27,
2018, and recommended the increase to the Board. Later that same day, the Board approved
this recommendation. Minutes for the September 27, 2018, Board meeting do not summarize



21
  Management’s proposed package consisted of a $600,000 base salary, $1,920,000 in fixed deferred salary,
and $1,080,000 in an at-risk deferred salary.



                                  OIG • EVL-2019-001 • March 26, 2019                                       20
the discussion over the proposed increase nor explain the reasons that the Board determined
an increase was warranted after less than seven weeks of performance by the President.

On October 9, 2018, Fannie Mae submitted a request to FHFA to approve the President’s
compensation increase, pursuant to FHFA’s established processes. FHFA staff reviewed
management’s proposal and source data from Fannie Mae’s compensation consultant and
drafted an analysis memorandum dated October 25, 2018, that largely repeated Fannie Mae’s
analysis and justifications for the increase. This memorandum concluded that Fannie Mae’s
compensation adjustment for the President was “reasonable and comparable,” and
recommended that the Director approve the request. The former FHFA Director approved the
President’s compensation increase on October 29, 2018. 22 As a result of this increase, Fannie
Mae is now compensating its Interim CEO and President a total of $4.2 million to execute the
same responsibilities for which it had previously paid $600,000. FHFA did not address the
appropriateness of this compensation increase in its management response.




22
   Under the Senior Preferred Stock Purchase Agreement, FHFA is required to consult with Treasury on new
compensation arrangements with and increases in compensation for certain executive officers. FHFA shared
information from Fannie Mae relating to the proposed increase in compensation for the Fannie Mae President
with Treasury for its consultation but received no response from Treasury prior to the drafting of the staff
analysis memorandum on October 25, 2018.



                                   OIG • EVL-2019-001 • March 26, 2019                                         21
FINDINGS .................................................................................

   1. FHFA’s Approval of the Board Transition Plan Acted to Circumvent the
      Congressionally Mandated Cap of $600,000 on the Compensation for Enterprise
      CEOs.

   2. The Former FHFA Director Overrode Internal Controls for Conservator Review
      and Approval of the Board Transition Plan, and FHFA Failed to Log or Track the
      Conditions Imposed by the Former Director to his Approval of the Board
      Transition Plan.


CONCLUSIONS ..........................................................................

In 2015, the former FHFA Director awarded annual target compensation of $4 million to each
Enterprise CEO in order to “promote CEO retention, allow reliable succession planning, and
ensure the continuity, efficiency and stability of enterprise operations.” Following that award,
Congress suspended those awards and imposed a cap of $600,000 on the compensation for
each Enterprise CEO.

In June 2018, the Board Chair, on behalf of the Board, submitted the Board Transition Plan to
FHFA for approval. In it, the Board recommended a change to Fannie Mae’s management
structure by filling the positions of President and CEO with separate individuals. (Since
2008, those positions had been held by one individual.) The Board nominated Fannie Mae’s
CFO to the position of President and elevated the Deputy CFO to CFO. Under the Board
Transition Plan, some responsibilities previously executed by the CEO and President would
be assigned to the President, and annual compensation would be no less than Fannie Mae’s
most highly compensated Fannie Mae officer, which was then $3.25 million. The former
FHFA Director approved the Board Transition Plan in July 2018.

We found that FHFA’s approval of the Board Transition Plan acted to circumvent the
congressionally mandated cap of $600,000 on CEO compensation. By authorizing Fannie
Mae to fill the positions of CEO and President with two separate individuals and transfer
substantial responsibilities from the CEO and President to the President position, FHFA
permitted Fannie Mae to compensate its President at a level more than five times greater than
the statutory cap.

After the current President had served in the position for less than seven weeks, the Board
approved an 11% increase in the President’s target compensation, raising it to $3.6 million per



                              OIG • EVL-2019-001 • March 26, 2019                                  22
year, which FHFA approved in October 2018. Fannie Mae is now compensating its interim
CEO and President a total of $4.2 million to execute the same responsibilities for which it had
previously paid $600,000.

Fannie Mae has established internal controls for processing, tracking, and monitoring requests
for conservator approval. We found that the former FHFA Director overrode those controls
when he determined to review the Board Transition Plan directly, without any staff analysis or
recommendation, which he was authorized to do. As a result, the former Director and a
Special Advisor were the only FHFA employees aware of the former Director’s approval of
the Board Transition Plan, which was subject to specific conditions, and these conditions were
not logged in FHFA’s tracking system. Because DOC employees were not aware of the
conditions imposed by the former FHFA Director, they were unable to track whether any of
the conditions had been satisfied. The record reflects that two of those conditions have not
been met.


RECOMMENDATIONS ...............................................................

We recommend that FHFA:

   1. Re-assess the appropriateness of the annual compensation package of $3.6 million
      to the Fannie Mae President with consideration paid to the following factors: the
      congressional intent behind the statutory cap on compensation; Fannie Mae’s
      continued conservatorship status and the burdens imposed on the taxpayers from that
      status; and the 10-year practice at Fannie Mae where one individual executed the
      responsibilities of both the CEO and President positions, with annual compensation
      capped at $600,000 since 2015; and

   2. Establish a process for maintaining and monitoring sensitive conservator requests in
      DOC’s STAR System.




                              OIG • EVL-2019-001 • March 26, 2019                                 23
FHFA COMMENTS AND OIG RESPONSE .....................................

We provided FHFA with an opportunity to respond to a draft of this evaluation report and its
response is included in the Appendix to this report. Because FHFA disagreed with our
recommendation to re-assess the appropriateness of the annual compensation award of $3.6
million to the Fannie Mae President, we consider this recommendation to be closed as
rejected. FHFA agreed with our recommendation to establish a process for maintaining and
monitoring sensitive conservator requests in its tracking system.


OBJECTIVE, SCOPE, AND METHODOLOGY .................................

The objective of this report was to evaluate FHFA’s oversight of the Enterprise Boards of
Directors, with a particular focus on succession planning for the CEO position. Based on
information that came to our attention during this evaluation, we also sought to assess
FHFA’s oversight of Fannie Mae’s compensation practices relating to its President.

To achieve this objective, we requested and reviewed FHFA guidance pertaining to CEO
succession planning. Additional materials reviewed include FHFA correspondence with
the Fannie Mae Board and CEO, documentation of FHFA’s review of compensation
arrangements for the Fannie Mae President, Fannie Mae Board documentation of its
succession planning activities, and Fannie Mae’s policy for succession planning.

In addition to our document review, we interviewed a Special Advisor to the Acting Director
and the DOC Deputy Director.

The field work for this report was completed between October 2018 and February 2019.

This evaluation was conducted under the authority of the Inspector General Act and in
accordance with the Council of the Inspectors General on Integrity and Efficiency’s Quality
Standards for Inspection and Evaluation (January 2012). These standards require us to plan
and perform an evaluation based upon evidence sufficient to provide a reasonable basis to
support its findings and recommendations. We believe that the findings and
recommendations discussed in this report meet those standards.




                             OIG • EVL-2019-001 • March 26, 2019                               24
APPENDIX: FHFA MANAGEMENT RESPONSE .............................




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OIG • EVL-2019-001 • March 26, 2019   30
ADDITIONAL INFORMATION AND COPIES .................................


For additional copies of this report:

   •   Call: 202-730-0880

   •   Fax: 202-318-0239

   •   Visit: www.fhfaoig.gov



To report potential fraud, waste, abuse, mismanagement, or any other kind of criminal or
noncriminal misconduct relative to FHFA’s programs or operations:

   •   Call: 1-800-793-7724

   •   Fax: 202-318-0358

   •   Visit: www.fhfaoig.gov/ReportFraud

   •   Write:

                FHFA Office of Inspector General
                Attn: Office of Investigations – Hotline
                400 Seventh Street SW
                Washington, DC 20219




                               OIG • EVL-2019-001 • March 26, 2019                         31