Fannie Executives to Defend Accounting Practices to Congress

In their first public response to regulators’ allegations that the company manipulated its books, executives of mortgage funding giant Fannie Mae plan to defend its accounting and say the actions regulators have criticized involve interpretations of complicated rules.

“These accounting standards are highly complex and require determinations over which experts often disagree,” Fannie Mae chairman and chief executive Franklin D. Raines says in written testimony prepared for delivery at a congressional hearing today and made available to The Washington Post.

Some of the regulators’ findings “involve highly detailed issues that I would not normally focus on in my role as CEO,” Raines says.

Raines says the company strongly disagrees with the allegation that it willfully violated accounting rules to maximize executive bonuses in 1998, according to the testimony.

“What we want to demonstrate is that we intended to do the right thing and we took care to do the right thing,” Raines says.

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