A discussion about business ethics, character traits, integrity, and values

"The image of Fannie Mae as one of the lowest-risk and 'best-in-class' institutions was a façade," said James B. Lockhart, acting director, OFHEO. "Our examination found an environment where the ends justified the means. Senior management manipulated accounting, reaped maximum, undeserved bonuses, and prevented the rest of the world from knowing."

Fannie Mae recently announced a $400 million settlement with federal regulators for a six-year period of "accounting chicanery," $11 billion or so of accounting chicanery. Now, $11 billion may seem like a lot of money, but Fannie Mae has assets of $1.4 trillion.

Alicia Korney, editor at WebCPA, reports that, "seemingly every other month (and in 2006, much more often than that), Fannie Mae has been forced to announce that it has uncovered more errors in its accounting, the departures of prominent personnel, or the release of yet another report airing its dirty financial statement laundry."

I wouldn’t describe "manipulated accounting" as an error, and I hope I’m not alone. "The Securities and Exchange Commission's investigation and a criminal inquiry from the Department of Justice continue," reports Korney.