Did anyone see this back in the summer?
U.S. books $117 billion surplus in June
For June, the U.S. Treasury Department reported a $117 billion surplus on Thursday, thanks to a continued uptick in revenue and a decline in spending.
Another big boon to June's bottom line was a one-time $59 billion payment from Fannie Mae (FNMA, Fortune 500), according to the Congressional Budget Office.
Now this article focuses on the $59 billion dollar payment.
Grand Theft Treasury
... and this article...
An Unconstitutional Bonanza
... $59 billion had been paid to the United States Treasury as a “dividend” on the $188 billion in purchase money payments that Treasury had advanced to Fannie and Freddie pursuant to agreements that it had entered into with its conservator, the Federal Housing Finance Agency (FHFA).
Here is the summary of the deal - with which there are now 17 lawsuits pending.
At root, the legal challenges to the government’s action rest on the one-sided terms of the original stock purchase agreement and especially the controversial Third Amendment. In September 2008, FHFA wrested control away from the Boards of Directors of Fannie and Freddie by installing itself as the conservator of both corporations, charged with managing all of their affairs. Armed with these extensive powers, FHFA promptly entered into a sweetheart deal with Treasury whereby Treasury purchased a new issue of senior preferred stock from Fannie and Freddie for about $188 billion, which carried with it a 10 percent dividend, and an option that allowed Treasury to acquire some 79.9 percent of the common stock for the nominal price of $0.00001 per share. That transaction drove down the prices of the common and (now junior) preferred. The 2012 Third Amendment replaced the previous 10 percent dividend with a “sweep” to Treasury of all the net profits of Fannie and Freddie, as of January 1, 2013.
The deal was made just as both companies were returning to profitability. As commonly expected, the revised agreement has proved wholly one-sided. Treasury has reaped over one hundred billion dollars and, through the profit sweep, has assured that Fannie and Freddie will never amass a single dime to enable the repurchase of the senior preferred stock. A conservatorship requires the conservator to act in the best interest of its beneficiaries—here the shareholders of Fannie and Freddie at the time the conservatorship was imposed. The original stock purchase agreement, and most emphatically the Third Amendment, which benefited only FHFA and Treasury, were signed in blatant violation of that basic duty. FHFA’s responsibility to the shareholders demands, at the very least, was that the Third Amendment be unraveled, and not exalted.
Basically the FHFA and the Treasury - both of the Executive branch of government - used legal tactics and raided the dividends from the private shareholders and left them with absolutely nothing.
This lawsuit document also explains in detail what happened.
Perry Capital Complaint
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