Fannie Mae’s Last Stand

Vanity Fair reports:

On December 15, 1998, Jim Johnson’s retirement dinner was held at the National Museum for Women in the Arts. That seems to have been the second choice—according to The Washington Post, the gala was supposed to have been in the U.S. State Department’s Benjamin Franklin Room, which could be used by outsiders only if a government official requested it. The Post began making calls after it got hold of an invitation, at which point State Department lawyers pulled the plug. But the dinner was grand in any event. Rubin spoke, as did comedian Bill Cosby and Fannie board member Bill Daley, the brother of Chicago’s current mayor.

The press reported Johnson’s compensation in his final year as around $7 million, but an internal Fannie Mae analysis (which assumed a high stock price) said that the real number was closer to $21 million. Plus, he got perks that could add up to half a million a year: a consulting agreement, two support-staff employees paid for by Fannie Mae, a car, and partial payment for a driver.

There were rumors that Johnson was angling to become Treasury secretary. Instead, in 1999, he became one of the first outside directors of the investment bank Goldman Sachs, where Rubin had been C.E.O., and where current Treasury secretary Henry Paulson presided at the time. Johnson became the head of the compensation committee, making him the closest thing Hank Paulson had to a boss.

You'll want to read this one.