How do you feel about Ms. Gaines?
Do you like her; dislike her? Is she a hero… a villainess?
Who is Brenda Gaines, you ask?
The following is a bio of Ms. Gaines on Fannie Mae’s website:
Ms. Gaines is an accomplished financial executive…! Former CEO of Diners Club, Fannie Mae board member since 2006… very impressive!
Ah, wait… Is that right, current Fannie Mae board member since 2006?
We were told that all pre-conservatorship board members were replaced…
On a side note – this part of the Fanniegate conspiracy is brilliant. The Government illegally seized two private, healthy companies and immediately replaced the board members in 2008. Then, in 2012, the Government enters into the Sweep Agreement and soon after churns the board members again. The plan is that no one board member is culpable…they are all different during different stages of the conspiracy. Plus, the statute of limitations protects many of these board members from lawsuits.
Back to the story… Brenda Gaines was a director before conservatorship. Ms. Gaines more than likely knew her main job in 2008 was to represent shareholders’ interests.
Therefore, consider that Brenda was a shareholder-representing director when she awoke the morning of September 6, 2008. As a reminder, September 6 is that day that Hank Paulson and Jim Lockhart claimed the boards of Fannie and Freddie consented to conservatorship.
Did Ms. Gaines actually consent to conservatorship? If she gave consent, why did she do so? If she did not consent, where is the record of her objecting to this Government take-over? It seems logical that if she objected to the conservatorship in 2008, she would not be the sole remaining pre-conservatorship director from both Fan and Fred’s’ boards.
So, she must have been OK with agreeing to the conservatorship, otherwise she would have been removed by FHFA. Also, she must have been OK with the 3rd amendment…or again, she’d be out by now if she objected. Ms. Gaines must also be in support of board directors violating their fiduciary responsibility to shareholders; violating the Const. 5th amendment; violating Delaware corporate law; obstruction of justice; conspiracy to commit fraud, etc. etc….
How is it possible that a pre-conservatorship board member agreed to the Government take-over (either by vote or through non-objection) without knowing the terms of the agreement? Those terms, as we now know, turned into the Government receiving all of Fannie’s profits in perpetuity plus 79.9% ownership of Brenda’s company through exercisable warrants.
Really, Ms. Gaines? You’re OK with that!? No objection!? No resigning in protest on principle!?
Therefore, it seems Ms. Gaines went from being a protector of shareholder rights to a protector of the Government’s illegal take-over.
With all of the recent attention given to the current board’s fiduciary responsibility, one would have to believe that a pre-conservatorship surviving board member would likely be feeling the heat right about now.
Good luck Ms. Gaines. We only wish you of all people lied awake at night worrying what’s best for shareholders…