Yesterday, we learned from the Chicago Tribune that Freddie Mac documents are not subject to the Freedom of Information Act because they contain or might compromise commercial information–that is, the proprietary insider information of a private company. Today, in the Washington Post, we learn that that private company was pressured to withhold negative information it was obligated to disclose under SEC rules. It seems that following government policy will adversely affect its bottom line, and the firm wanted to tell its remaining shareholders that.
Federal officials who took over Freddie Mac stopped short of nationalizing the company, leaving it partly in private hands. This means Freddie still has to answer to investors and file financial disclosures.
But when Freddie Mac’s executives concluded a few weeks ago that they had to disclose that the government’s management of the McLean company was undermining its profitability and would cost it tens of billions of dollars, the firm’s regulator urged it not to do so, according to several sources familiar with the matter….
As Freddie Mac executives were preparing their annual 10-K financial disclosure this month, they reported that carrying out the Obama administration’s housing plan would cost $30 billion this year. That sum would have to be covered by the Treasury Department. The federal government has pledged to cover $200 billion each in losses for Freddie Mac and Fannie Mae, of which the pair have asked for about $60 billion.
The housing agency asked that the cost of the program be withheld and that the firm soften language describing how government management was undercutting profitability, according to sources.
Freddie Mac ultimately included the disclosures, after negotiating on the wording with federal regulators, the article says.