A $7-Billion Omission
There were 7.7 billion reasons to report the story, but none of the three broadcast networks did so on their December 6 programs.
“Fannie Mae took another step toward resolving its accounting fiasco by announcing a restatement of results that reduced retained earnings as of June 30, 2004, by $6.3 billion,” The Wall Street Journal’s James Hagerty reported on page A4 of the December 7 paper.
The same day, The Washington Post and The New York Times devoted business section stories to the mortgage broker’s accounting errors.
The Fannie Mae story is hardly Wall Street’s garden variety profit revision.
“It took an army of accountants two years and more than $1.4 billion to quantify the mess,” Washington Post reporter David S. Hilzenrath noted in his December 7 story. Hilzenrath went on to mention a
Fannie Mae’s accounting mess “toppled former chairman and chief executive Franklin D. Raines, who headed the Office of Management and Budget in the
The media’s overall disinterest in what Newsweek reporter Charles Gasparino labeled a “government-sponsored Enron,” has also been chronicled by BMI.
“Although broadcast news offered wall-to-wall coverage of the endless commas and zeros behind the Enron collapse, Fannie Mae’s staggering problems and the resignation of six top executives, including the CEO and chief financial officer, received almost no TV news attention,’ an April 2005 BMI special report noted at the time, although the inflated profit margins dwarfed those of energy company Enron.