FEDERAL

indemnification payments that OIG previously
commented on. See 78 Fed. Reg. 28,452 (May 14,
2013).
OIG made two comments concerning the rule.
OIG’s first comment critiqued the efficiency of
FHFA’s proposed two-stage approval process.
FHFA plans initially to review and approve any
golden parachute agreement into which a GSE
seeks to enter and then to review and approve
the actual payments made pursuant to such an
agreement if the GSE is subject to a specified
“triggering event.” Such events include a GSE
being insolvent, subject to control by a conservator
or receiver, in a troubled condition, or suffering
from a poor composite rating. OIG contended
that this two-stage approval requirement will
render the first approval meaningless and, thus,
will create a perverse disincentive for FHFA staff to
scrupulously analyze golden parachute agreements
because oversight mistakes theoretically can be
fixed at the payment stage, assuming a triggering
event occurs. OIG also noted that the two-stage
process could hinder the GSEs’ ability to recruit
and retain well-qualified employees, who may
not work for them if compensation agreements
are subject to later revision (i.e., years later at the
payment stage).
OIG’s second comment pertained to the
procedures applicable to FHFA’s payment approval
process (i.e., the “second approval”). The draft rule
provided that when deciding whether to approve
payments, FHFA might consider negative factors,
such as any fraudulent act or omission; breach of
fiduciary duty; violation of law, rule, regulation,
order, or written agreement; and the level of willful
misconduct and malfeasance on the part of the
party who would benefit from the payments.
Further, the draft rule stated that such factors may
create a presumption against approval, but it did
not specify how FHFA will evaluate such factors or
what showing would rebut the presumption. OIG
recommended that FHFA should articulate the
criteria that it will apply when weighing negative
factors and define the showing required to rebut
the presumption against approval. These revisions
would avoid future claims alleging arbitrary and
capricious action by FHFA and would facilitate
development of an accurate, transparent audit
trail, allowing OIG and other interested parties to
review FHFA’s decision making.
FHFA did not revise the proposed rule to address
OIG’s comments.
Communications and Outreach
A key component of OIG’s mission is to
communicate clearly with the GSEs, industry groups,
other federal agencies, Congress, and the public. OIG
facilitates clear communications through its targeted
outreach efforts, hotline, coordination with other
oversight organizations, and congressional statements
and testimony.
Outreach
During the reporting period, OIG staff made over 50
presentations to law enforcement officials, real estate
and banking industry professionals, and homeowners.
The presentations to law enforcement officials were
made to multiple mortgage fraud working groups
across the country and individual federal agencies
responsible for investigating mortgage fraud, such
as the FBI, HUD-OIG, and the Secret Service.
In addition, OI developed its partnership with
the National Association of District Attorneys to
train local and state law enforcement officials and
prosecutors throughout the country, putting on 11
presentations in 11 cities: Ft. Myers, Florida; Boston,
Massachusetts; Princeton, New Jersey; Portland,
Semiannual Report to the Congress • April 1, 2013–September 30, 2013 35