Ohio Attorney General Mike DeWine said in Congress last week that the mortgage giant Fannie Mae is wasting millions of dollars of taxpayer money on an excessive legal defense for its former leaders.
“Simply put, Fannie Mae and its former executives have been using American taxpayer dollars to pay their highly compensated cadre of lawyers to over-lawyer their indefensible actions,” DeWine said in testimony before the Oversight and Investigations Subcommittee of the House Financial Services Committee. “It is wrong, it is unconscionable and I urge the committee and Congress to bring it to an end.”
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DeWine is the lead lawyer representing 29 million investors in a class-action lawsuit against Fannie Mae, three former executives and the companies accounting firm, KMPG. The suit accuses the defendants of consumer fraud. It’s been winding through the courts for six years – so long that DeWine is actually the third attorney general from Ohio to play the role as lead litigant.
In his testimony, DeWine described recent trial conferences in which 35 to 40 lawyers and paralegals representing Fannie Mae crammed into the judge’s chambers to discuss the case. The plaintiffs brought three.
Taxpayers foot the bill for both sides. The plaintiff’s lawyers are with DeWine’s office. Fannie Mae’s army of lawyers is paid by the federal government, which took ownership of the company in 2008. They have charged at least $132 million in legal fees since the case began.
“Fannie Mae and the executives whom it is indemnifying are using taxpayer resources to lawyer this case to death and delaying justice for those whom they defrauded in the first place more than six years ago, while simultaneously swindling every American taxpayer,” DeWine said.
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Image courtesy www.ohioattorneygeneral.gov