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White House Sends OFHEO's Brickell Nomination To Senate
By Dawn Kopecki
Dow Jones Newswires
Thursday June 12, 2003
WASHINGTON -- After months of delay, the White House
hurried to the U.S. Senate Thursday the formal nomination
of a new director of the federal agency that regulates
Freddic Mac, just three days after the company booted its
top executives over problems with its accounting practices.
The White House tapped Mark Brickell, a former managing
director for J.P. Morgan's derivatives group, to replace
Democratic-appointee Armando Falcon at the Office of
Federal Housing Enterprise Oversight just as the agency
comes under fire for mishandling possible accounting
misdeeds at Freddie Mac.
OFHEO is Freddie Mac's and Fannie Mae's safety and
Brickell has more than 25 years of risk-management
experience and a keen understanding of the way Fannie
and Freddie do business.
Brickell's nomination has languished since the White
House announced it in early February. The Senate
Banking Committee has to vet all financial regulatory
nominees, which also need confirmation by the full
Committee spokesman Andrew Gray said the
committee's Chairman Sen. Richard Shelby, R-Ala.,
will schedule the nomination hearing as soon as
Brickell completes a committee questionnaire and
some other related materials.
quot;When they have their paperwork completed with
the committee, we move expeditiously to process
nominees,quot; Gray said, adding that a hearing could
be scheduled within the month. quot;It depends on when
he's able to get his committee questionnaire and
Although Brickell has spent some time in Washington
lobbying for J.P. Morgan, most his career has been
on Wall Street. He is currently the chief executive of
Blackbird Holdings, an electronic trading system for
Brickell also chaired the International Swaps and
Derivatives Association from 1988 to 1992.
By comparison, Falcon has spent his entire career
in Washington, working as chief counsel on the House
Banking Committee for almost 10 years before taking
over OFHEO in 1999.
The decade-old agency has been pegged in the
past as a cheerleader for the companies it regulates
and as an underfunded and ineffective disciplinary
against the two most powerful mortgage companies
in the U.S. Fannie and Freddie own or guarantee
45 percent of all outstanding residential mortgages
in the United States. Their combined mortgage
portfolios are valued at more than $1.2 trillion, and
the combined value of the mortgage-backed
securities they guarantee for other investors is
$1.5 trillion, according to OFHEO.
Lawmakers have been especially critical of
OFHEO's handling of Freddie's recent accounting
problems, which is now the focus of a federal criminal
investigation. The agency signed off on a report last
week that credited Fannie and Freddie for their strong
management and internal controls -- only to cite
weaknesses in those areas three days later when
the Freddie admitted to employee misconduct tied
to its accounting woes.