Tom Donilon's superhero status as White House National Security Adviser has precedent. He was part of Fannie Mae's dynamic duo, capable of stopping regulatory bullets. Lobbyist Donilon worked with Fannie Mae's Ken Duberstein to keep Congressional reform wolves at bay. Donilon served from 1999 to 2005, while Duberstein's board tenure ran from 1998 to 2007.
SEC filings show Ken Duberstein also advised Fannie Mae on regulatory matters:
Mr. Duberstein is Chairman and Chief Executive Officer of The Duberstein Group, an independent strategic planning and consulting company, and is a nominee for election to the Board of Directors. The firm has provided services to Fannie Mae since 1991. During 2003, the firm provided services on an annual fixed-fee basis of $375,000 and will continue to provide similar services during 2004..
Ken garnered $1,875,000 in consulting fees over a five year period.
Both Donilon and Duberstein served during Fannie Mae's long running accounting scandal. Duberstein sat on the committee responsible for overseeing the use of derivative contracts, which Fannie fudged to boost executive incentive pay. How much did Tom Donilon get in tainted bonus money? Fannie Mae's 2004 proxy statement revealed Donilon's bonus pay:
2003--$727,020Donilon also received $2 million in stock option grants, with performance based on rising Fannie Mae stock prices, artificially inflated by accounting shenanigans.
These bonuses were based on fraudulent figures. Did Donilon return the tainted incentive awards? If not, how are Americans to trust someone who would personally benefit from unethical to illegal behavior?
What else did Fannie's SEC filings reveal?
Mr. Donilon’s brother had an approximately 15 percent interest in The Glover Park Group during 2003. Fees and commissions paid to The Glover Park Group in 2003 (net of amounts passed through to other service providers) were approximately $429,000.
A federal investigation revealed the existence of an "arrogant and unethical culture" at Fannie Mae. When CNN can proudly air Eliott Spitzer, Donilon belongs in the Obama White House. There are no sins too great inside the heady world of power and wealth. Pragmatism requires they be ignored.
While Senator Richard Shelby (R-AL) denigrates Donilon for his Fannie role, he won't touch Duberstein. They're fellow Reds. The Blues have similar standards, however low. Brookings referred to Donilon and Duberstein in an Opportunity '08 introduction as:
Two of Washington's savviest and best connected figures
I have nothing to add. It's best to leave any post on the new National Security Adviser on an upbeat note.
(Because of its political intrigue, this was originally created on State of the Division)
Update 10-11-10: ABCNews did a story on Donilon's dark background.
Update 2-5-11: Fannie Mae became aware of its illegal practices in 2003. Donilon and Duberstein did what afterwards? They received a report in May 2006, while Ken Dubestein still served on the Fannie board. "Fannie Mae would not say whether it had shared O.J.C. 5595 with its board of directors." Gotta cover for Duberstein (Red) and Donilon (Blue).