Mary’s blog post this morning on The Washington Post’s report today that Fannie Mae is going to pay bonuses to four top executives offers a test of  the truism that failure pays in Washington as well as Wall Street. Case in point: Fannie Mae vice president Kenneth Bacon who is slated to receive $1 million.

A 15-year veteran of the mortgage giant, Bacon now serves as executive vice president for housing and community development. Along the way, he has helped build Fannie Mae’s reputation for generosity to worthy nonprofits and ambitious politicians alike. From 1995 to 2007, he served as a director of the Fannie Mae Foundation, which in 2007 gave away $16 million in charitable contributions to a wide variety of affordable housing and arts groups, according to IRS disclosure forms found on Guidestar.org (subscription required). The foundation was shut down in mid-2007 as Fannie Mae’s losses mounted.

Like many Fannie Mae executives, Bacon also maxed out as a donor to the firm’s political action committee with $5,000 donations in 2006 and 2007. The PAC, in turn, gave to Democrats like former congressman and current White House Chief of Staff Rahm Emanuel (D-Ill.), as well as Republican leaders like Rep. Eric Cantor (R-Va.), with a slight preference in recent years for Democrats. Bacon personally donated $238 to the PAC every two weeks for much of 2007. He also gave $2,000 to Barack Obama’s presidential campaign, according to the nonpartisan campaign finance disclosure Website, OpenSecrets.org

In short, Bacon is an exemplar of contemporary Washington bipartisanship, and perhaps even competence. Fannie Mae’s multifamily holdings are much less likely to be delinquent than single family mortgages, Reuters reported in January. But the idea that Bacon deserves a million bucks on top of his current salary of at least $385,000 is dubious.

When Bacon joined Fannie Mae in 1992 as head of its Northeast region, Knight Ridder described him as “THE biggest man in the mortgage lending business in 10 states, Puerto Rico and the Virgin Islands,” adding that “it is his business to reassure investors that the billions of dollars in mortgage-backed securities they purchase from Fannie Mae each year are rock solid.” Over the next 15 years, Bacon and his employer lost sight of that goal. In 2008, Fannie Mae company lost $58 billion and asked the government for a $15 billion bailout with the warning that it will likely need more.

For his contributions to Fannie Mae’s performance, Bacon has already received $200,000 of his bonus, according to The Post, and he “will receive about 60 percent of the remaining funds this year and, depending on performance, as much as 40 percent next year.”

Update: I asked Fannie Mae to comment on Bacon and just received this note from Chuck Greener, senior vice president of communications:

“Ken has been an important leader at our company and currently oversees a division that provides critical affordable rental housing at a time when it’s needed most.  Ken and his team are focused on providing liquidity, stability and promoting affordability to the US residential market.  In fact, as we’ve announced, last year nearly ninety percent of the rental housing units financed by Fannie Mae were affordable to people at or below the median income of their communities. Ken has been critical in helping our company meet important corporate goals including increasing the nation’s affordable housing supply, developing communities and helping rebuild the Gulf Coast.”