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.
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](http://www.opensecrets.org/indivs/search.php?name=Bacon&state=DC&zip=&employ=&cand=&c2008=Y&c2006=Y&sort=N&capcode=by6qt&submit=Submitthat money.) $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.
*Update: *I asked Fannie Mae to comment on Bacon and just received this note from Chuck Greener, senior vice president of communications:
“Ken been an important leader at our company and currently oversees a division that