Inspector General Confirmation Testimony

Published by the Federal Housing Finance Agency, Office of Inspector General on 2014-06-17.

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

                        Statement of Laura S. Wertheimer
      Nominee to be Inspector General of the Federal Housing Finance Agency
       Before the Senate Committee on Banking, Housing, and Urban Affairs
                                  June 17, 2014

Chairman Johnson, Ranking Member Crapo and Members of the Committee, thank you
for this opportunity to appear before you today. I am honored to be President Obama’s
nominee for Inspector General of the Federal Housing Finance Agency (“FHFA”).

The FHFA plays a critical role in our financial system as the safety and soundness
regulator of the Federal National Mortgage Association (“Fannie Mae”), the Federal
Home Loan Mortgage Corporation (“Freddie Mac”), and the Federal Home Loan Bank
System, comprised of 12 regional Federal Home Loan Banks (“FHLBanks”). Since
September 2008, Fannie Mae and Freddie Mac have been in conservatorship under
FHFA, because of concern that their deteriorating financial condition threatened the
stability of the financial markets. Fannie Mae and Freddie Mac currently own or
guarantee $5 trillion in mortgages, three out of every four mortgages in this country.

The FHFA Inspector General’s mission is to promote the economy, efficiency, and
effectiveness of FHFA’s programs and operations. To carry out this mission, OIG
conducts and coordinates audits and evaluations of FHFA’s activities, which includes
FHFA’s regulation of Fannie Mae, Freddie Mac, and the FHLBanks and its
conservatorships of Fannie Mae and Freddie Mac, and investigations involving FHFA,
Fannie Mae, Freddie Mac, and the FHLBanks. Strong independent oversight of FHFA
programs and operations is critical to safeguard taxpayer dollars and ensure that FHFA
programs and the FHFA’s conservatorships of Fannie Mae and Freddie Mac are
conducted in accordance with the laws enacted by Congress.

Much of my professional career has focused on leading investigations into alleged
wrongdoing and counseling clients on improvements to internal controls and processes to
prevent and detect violations of governing laws and regulations. I have significant
experience running independent investigations for audit committees and committees of
independent directors of public companies looking into financial statement reporting and
disclosure errors, alleged accounting irregularities, misconduct by corporate officers and
employees, possible improper payments to foreign government officials, whistleblower
claims, and other significant issues identified by internal or external auditors. These
investigations followed the facts wherever they led, without fear or favor; developed
remedial measures tailored to the facts found; and monitored implementation of that

If confirmed as the FHFA Inspector General, I will exercise my duties aggressively and
independently. I have a deep appreciation of the critical importance of conducting
rigorous, fair and thorough audits, evaluations and investigations, communicating the
results to stakeholders clearly and holding individuals and entities accountable for their

actions. I pledge to be responsive to this Committee and to Congress as a whole and will
work to develop a good working relationship with the FHFA Director.

After more than thirty years in the private sector, I am honored to have an opportunity for
public service. My father was a first generation immigrant who came to this country with
his parents in 1938, escaping with the clothes on their backs and speaking only German.
My grandparents had to reinvent themselves in a strange, new environment: my
grandmother found work as a domestic housecleaner and my grandfather was employed
to scrub out cocoa barrels on the New York docks. Together, they earned enough to rent
an apartment in Kew Gardens, a community populated with German and Austrian
refugees. My father enrolled in New York City public schools, learned to speak
unaccented English, and graduated as valedictorian of his high school class.

America has given much to me and to my family. I am eager to give something back to

Thank you and the Committee for your consideration of my nomination. I look forward
to answering your questions.