Government regulators said Monday they will seek more than $100 million in civil penalties from three former Fannie Mae executives accused of submitting six years of inaccurate accounting reports, and the return of more than $115 million in bonuses.

The Office of Federal Housing Enterprise Oversight filed 101 charges against former Fannie Mae Chairman and Chief Executive Officer Franklin Raines, former Chief Financial Officer J. Timothy Howard, and former controller Leanne G. Spencer.

The charges, which will be heard by an administrative law judge, stem from OFHEO’s investigation of management and accounting practices from 1998 to 2004. OFHEO Director James Lockhart said other current and former Fannie Mae executives could face similar charges.

The charges reveal how Raines, Howard and Spencer “improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over 20 accounting principles and misleading the regulator and the public,” Lockhart said. The misconduct, he said, cost Fannie Mae and its shareholders “many billions of dollars and damaged the public trust.”

Of the 101 charges, some of which carry fines of up to $100,000 per day, 79 are alleged to have involved Raines. Howard is named in 89 charges, and Spencer in 73. In addition to more than $100 million in potential civil penalties, OFHEO seeks to recoup bonuses, stock options and performance-based pay from the three executives.

On top of his $1 million annual base salary, Raines received $84.6 million in bonuses, performance pay and stock options between 1998 and 2003, which OFHEO says should be repaid. The government also seeks the return of $27.3 million Howard received in options and bonuses during the same period, and $5.6 million from Spencer.

Last month, Fannie Mae agreed to pay Raines $2.6 million to settle a pay dispute after Raines took early retirement in December 2004.

Attorneys for Raines and Howard issued press releases saying the charges are politically motivated and tied to OFHEO’s attempts to persuade Congress to pass legislation giving the office more regulatory power.

Lockhart said the investigation into management and accounting practices at Fannie Mae and Freddie Mac predated the introduction of the bill to make OFHEO an independent agency with powers similar to that of federal banking regulators. The bill has stalled over the issue of placing tighter limits on Fannie and Freddie’s loan portfolios. Lockhart told reporters during a press conference he is confident that a compromise bill will be approved early next year.

Fannie Mae reported Dec. 6 that the company overstated earnings from 2001 through the first two quarters of 2004 by $6.3 billion. Accounting errors related to how the company handled derivatives resulted in a $7.9 billion loss after taxes — considerably less than a previous estimate of $10.8 billion.

Last week, Fannie Mae sued its former auditor, KPMG LLP, alleging the firm’s “professional negligence” forced the government-sponsored mortgage repurchaser to undertake one of the largest accounting restatements in history.

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