The New York Times recently reported that the legal cost to defend three former executives of Fannie Mae and Freddie Mac is approaching $100 million. Taxpayers have already covered almost half of the tab.
The inspector general of the Federal Housing Finance Agency, the entity overseeing both companies as their conservator, is trying to protect taxpayers from further unnecessary and excessive costs. In its report on the matter, the inspector general remarked that when the companies were taken over in September 2008 their legal contracts could have been repudiated but were not. As a result, taxpayers are bearing the costs ever since. The report suggests that these legal fees should be the subject of Congressional oversight to control costs.