text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Independent Fannie Mae and Freddie 
  Mac Investigative Commission Act''.
  
  SEC. 2. FINDINGS.
  
      Congress finds the following:
              (1) The United States has suffered tremendously from the 
          irresponsible and unchecked growth of the mortgage industry 
          which proliferated under the policies of Fannie Mae and Freddie 
          Mac.
              (2) The Federal conservatorship of Fannie Mae and Freddie 
          Mac may cost the American people a minimum of $200,000,000,000, 
          and potentially $2.4 trillion, making it potentially the 
          largest financial bailout in our Nation's history.
              (3) The American people, forced to shoulder the financial 
          burden of the bailout, deserve to know what went wrong and why.
              (4) Any executive officers and members of the boards of 
          directors at Fannie Mae and Freddie Mac who may have exercised 
          poor judgment or committed wrongdoing should be held 
          accountable for such judgments and actions.
              (5) In June 2003, Freddie Mac disclosed that it had 
          misstated its earnings by roughly $5 billion between the years 
          2000 and 2002 to smooth the appearance of quarterly volatility 
          in earnings and to meet Wall Street expectations.
              (6) In December 2004, the Securities and Exchange 
          Commission found that Fannie Mae had violated accounting rules 
          and needed to restate its earnings by recording a loss of up to 
          $9 billion from 2001 to 2004 based on board policies 
          established prior to that period.
              (7) The shareholders of Fannie Mae and Freddie Mac and the 
          employees and directors of the boards of these enterprises have 
          enjoyed large dividends, bonuses, salaries, and other 
          compensation based on policies and practices that may have been 
          misguided or fraudulent.
              (8) In 2007, former Freddie Mac Chairman and Chief 
          Executive Richard Syron alone received nearly $18,300,000 in 
          compensation, despite the fact that the enterprise's stock lost 
          half its value.
              (9) Last year, former Fannie Mae President and Chief 
          Executive Daniel Mudd received compensation valued at 
          $11,600,000.
              (10) Previous investigations of Fannie Mae and Freddie Mac 
          have focused on accounting fraud, but there have not been any 
          investigations on the policies and decisions that contributed 
          to and exacerbated our Nation's housing crisis and financial 
          collapse of these corporations.
              (11) According to the Office of Federal Housing Enterprise 
          Oversight, regulation allowed Freddie Mac and Fannie Mae to 
          overleverage and operate with just $83.2 billion of capital at 
          the end of 2007, even though it supported $5.2 trillion of debt 
          and guarantees.
              (12) Although the executive officers of Fannie Mae and 
          Freddie Mac have come under scrutiny, their boards of directors 
          have been held harmless throughout the Nation's housing crisis, 
          despite having the authority to create, influence, and vote for 
          the policies of such enterprises.
              (13) The involvement of the boards of directors in the 
          policies of Fannie Mae and Freddie Mac has been shrouded in 
          secrecy, as their policymaking decisions have not been publicly 
          disclosed, despite the public protections and benefits their 
          enterprises receive.
              (14) There is a need to fully understand what went wrong in 
          the management of Fannie Mae and Freddie Mac and the misguided, 
          potentially fraudulent board policies and practices that 
          ultimately led to the Federal conservatorship of such 
          enterprises so that similar mistakes will not be repeated in 
          the future.
  
  SEC. 3. ESTABLISHMENT.
  
      There is established a commission to be known as the ``Independent 
  Fannie Mae and Freddie Mac Investigative Commission'' (in this Act 
  referred to as the ``Commission''). The Commission shall function upon 
  the legislation being signed by the President of the United States and 
  will conduct its investigations for a period of two years, issuing a 
  final report upon completion with necessary hearings and assembly of 
  related records for the period following the savings and loan crisis of 
  the 1980s to the present.
  
  SEC. 4. DUTIES OF THE COMMISSION.
  
      The Commission shall investigate, determine, and make 
  recommendations with respect to the following:
              (1) The policies, practices, and board decisions of Fannie 
          Mae and Freddie Mac from the 1990s through the present that led 
          to the enterprises' financial instability and the subsequent 
          Federal conservatorship of such enterprises.
              (2) Fannie Mae and Freddie Mac's involvement, if any, in 
          the creation and proliferation of the securitized mortgage 
          instrument, and how such instrument affected the solvency of 
          such enterprises.
              (3) The role of the boards of directors of Fannie Mae and 
          Freddie Mac in developing the accounting and financial risk 
          policies of such enterprises, particularly as they relate to 
          subprime mortgages and the international securitization of 
          mortgages.
              (4) The actions of each board member or members, executive 
          officer or officers, or the board member or members and 
          executive officer or officers responsible for making the 
          financial decisions to grow such enterprises' portfolios of 
          subprime mortgage loans.
              (5) The board member or members, executive officer or 
          officers, or the board member or members and executive officer 
          or officers responsible for making the decisions that may have 
          encouraged the proliferation of the subprime mortgage industry.
              (6) The decisions that contributed to the overvaluation of 
          risky mortgage investments in the stock market and to the 
          growth of the subprime mortgage industry.
              (7) The annual compensation, stock options, and other 
          financial benefits that accrued to each of Fannie Mae and 
          Freddie Mac's executive officers and members of their boards of 
          directors from 1990 to 2008.
              (8) The board members, if any, who financially benefitted 
          from their appointment to either board of directors and/or 
          through the decisions of such board.
              (9) The tracking of political contributions to Presidential 
          and congressional elections and campaign funds that served to 
          influence U.S. housing policy by board members, officers, and 
          employees.
              (10) The appropriate role of Fannie Mae and Freddie Mac in 
          the U.S. housing market nationwide and regionally.
              (11) Such other matters that the President or the Congress 
          may place before the Commission.
              (12) The Commission shall possess full subpoena power and 
          authority to hire necessary staff to conduct its affairs.
  
  SEC. 5. MEMBERSHIP.
  
      (a) Number and Appointment.--The Commission shall be composed of 9 
  members appointed by the President as follows:
              (1) One member who shall serve as the Chairperson, shall be 
          appointed with the advice of the Senate.
              (2) Eight members, not more than four of whom shall be 
          members of the same political party, to be appointed based on 
          recommendations from the Speaker and the minority leader of the 
          House of Representatives, and the majority leader and minority 
          leader of the Senate, who shall each submit the names of two 
          recommended candidates to the President.
      (b) Terms.--Each member shall be appointed for the life of the 
  Commission.
      (c) Vacancies.--A vacancy on the Commission shall be filled in the 
  manner in which the original appointment was made for the remainder of 
  that term. If there is a vacancy in the Chair of the Commission, the 
  remaining members of the Commission may choose from among the members 
  an interim Chairperson to serve until a new Chairperson is appointed.
  
  SEC. 6. COMPENSATION.
  
      Members of Congress.--Members of the Commission who are Members of 
  Congress shall not receive additional pay, allowances, or benefits by 
  reason of their service on the Commission, but, as permitted by law, 
  may be reimbursed for travel, subsistence, and other necessary expenses 
  incurred when performing duties of the Commission.
  
  SEC. 7. COMMISSION HIRING ALLOWANCE.
  
      Such sums as are necessary shall be appropriated to conduct the 
  activities of the Commission but shall be no less than $5 million 
  annually. Recovery of any assets fraudulently accruing to members of 
  the boards of directors shall be returned to the general Treasury to 
  offset such expenditures.
target: Independent Fannie Mae and Freddie Mac Investigative Commission Act - Establishes the Independent Fannie Mae and Freddie Mac Investigative Commission to investigate and issue a final report on the period following the savings and loan crisis of the 1980s to the present.
  
  Requires the Commission to investigate: (1) the policies, practices, and board decisions of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) from the 1990s through the present that led to their financial instability and subsequent federal conservatorship; (2) Fannie Mae and Freddie Mac's involvement, if any, in the creation and proliferation of the securitized mortgage instrument, and how such instrument affected their solvency; (3) the role of their boards of directors in developing their accounting and financial risk policies; (4) the actions of each board member or members, executive officer or officers, or the board member or members and executive officer or officers responsible for making the financial decisions to grow the enterprises' portfolios of subprime mortgage loans; and (5) the board member or members, executive officer or officers, or the board member or members and executive officer or officers responsible for making the decisions that may have encouraged the proliferation of the subprime mortgage industry.
feat_title: To establish the independent Fannie Mae and Freddie Mac Investigative Commission to investigate the actions of officers and directors at Fannie Mae and Freddie Mac responsible for making the decisions that led to the enterprises' financial instability and the subsequent Federal conservatorship of such enterprises, and any financial gain that accrued to such officers and directors.