Saturday, May 9, 2009
Inconsistencies Arise in CFO Suicide Story
By Victor Thorn
Reminiscent of the ongoing microbiologist body count that AMERICAN FREE PRESS has reported on, a new wave of suicides is plaguing the financial industry, culminating in the recent death of Freddie Mac CFO David Kellermann.
The 41-year-old husband and father, described as having a life-of-the-party personality, was found dead in the basement of his $900,000 Vienna, Va. home at 4:48 a.m. on April 22. Initially, a law enforcement official speaking on condition of anonymity told the Associated Press that Kellermann hanged himself.’
Other news agencies ran with this account, but then Sabrina Rock, a Fairfax County police spokesman, confirmed to the AP that Kellermann was dead, but she could not confirm that he committed suicide despite WUSA reporting that Fairfax police told them it was suicide.
Stranger yet, police spokesman Lucy Caldwell told All Headline News editor Linda Young via telephone on April 22 that “other people were present at the home at the time of Kellermann’s death, and that there was a gun and a gunshot wound.”
If true, this final variable is explosive for one obvious reason. How often does a suicide victim hang himself, then shoot himself; or shoot himself first, then hang himself? Considering these conflicting accounts, conspiracy theorists almost immediately began speculating.
Some compared this scenario to the murder of Vince Foster; while others claimed Kellermann became a fall guy for Sen. Christopher Dodd, Rep. Barney Frank, or the architects behind Barack Obama’s economic plan.
To determine whether this conjecture is valid, first examine Kellermann’s role at Freddie Mac. Employed at this government-sponsored mortgage firm since 1992, Kellermann served as a financial analyst, principal accounting officer, corporate controller, senior vice president, and was then finally promoted to CFO in September 2008. Loyal, driven, and working strenuously long hours, he typified the ultimate “company man.”
Unfortunately, Freddie Mac came to be recognized as a primary catalyst for the ill-fated housing bubble’s collapse where perilously risky loans led to record-setting defaults. Matthew Barakat and Alan Zibel of the Associated Press noted on April 23 that “the company lost $50 billion last year, and the Treasury Department has pumped in $45 billion to keep the company afloat.”
To make matters worse, Freddie Mac is the subject of federal investigations by the Securities and Exchange Commission, as well as the Justice Department. The focus of their probes revolved around the accounting practices used for their 13 million mortgages. With serious doubts surfacing about the validity of Obama’s Troubled Assets Relief Program (TARP), Freddie Mac and Fannie Mae have come under increased scrutiny; especially since, as Christine Seib of the Times UK wrote in April 22, they “lend or guarantee half of America’s $12 trillion mortgage market.”
The stress at Freddie Mac became so pronounced that Barakat and Zibel reported, “Last month, David Moffett, the government-appointed chief executive, resigned in frustration over strict oversight.” To complicate matters, the public’s fury over CEO bonuses directly affected Kellermann. CNBC on-air editor Charlie Gasparino summarized the situation on April 22.
“In March, Kellermann was one of a handful of senior Freddie Mac people to have received a bonus, in his case $850,000, which prompted criticism and outrage.”
The blowback alarmed Kellermann, as Clusterstock editor Joe Weisenthal documents. “Reporters and camera crews showed up at his home in an affluent Washington suburb. Fearing that someone might attack his house, his wife or their five-year-old daughter, he asked the company to provide a security detail.”
The question remains: what was Kellermann’s role in Freddie Mac’s meltdown? Being a key insider with access to highly sensitive material, did he help facilitate the accounting gimmicks that brought about his company’s demise? Or, could Kellermann have been one of the good guys who refused to perpetrate this ruse being foisted on American taxpayers? To his credit, Barakat and Zibel indicate that “Kellermann was neither a target nor a subject of the [U.S. Attorney’s] investigation, and had not been under law enforcement scrutiny.”
Freddie Mac had been subpoenaed, however, for documents relating to its accounting and disclosure improprieties. Was the entire house of cards beginning to crumble, and instead of covering it up, Kellermann instead intended to come clean? What makes this matter suspicious is that only one day prior to his death, the Associated Press reported on April 23 that “a human resources officer met with Kellermann and told him he needed a break because he had been working so hard.”
Faced with a much-needed vacation to spend time with his wife and daughter, why would Kellermann suddenly choose to kill himself? Or, was Freddie Mac clandestinely trying to push their top executive out the door in a roundabout way?
The most pressing issue on the table at this time was Freddie Mac’s first-quarter financial reports, which Kellermann proposed to release at the end of May. Matters became extremely complicated because “Freddie Mac executives recently battled with federal regulators over whether to disclose potential losses on mortgage securities tied to the Obama administration’s housing plan” (Zibel & Barakat, April 22).
The crux of this subject is now apparent. A massive battle ensued between federal regulators who were trying to cover up catastrophic economic news, and those who refused to further cook the books. Zachary Goldfarb and Jonathan Mummolo of the Washington Post provided an invaluable insight on April 23.
“Kellermann figured in several recent controversies at Freddie Mac. He and a group of company attorneys tussled with regulators in early March as the firm prepared to file its quarterly earnings report with the Securities and Exchange Commission. The group insisted that Freddie Mac inform shareholders of the cost to the company in helping carry out the Obama administration’s housing recovery plan. The regulators urged the company not to do so.”
An industry veteran who wished to remain anonymous offered the following assessment for Housing Wire. “This isn’t the story of a guy who was trying to cover something up. It’s the story of a guy who was trying to do the right thing. Kellermann and his cohorts insisted on reporting Freddie Mac’s financial status as they believed it should be reported, disclosing all of its obligations.”
Was the smoking gun information held by Kellermann (and other top CEOs who’ve been “suicided” in recent months) what ultimately cost him his life?
Victor Thorn is a hard-hitting researcher, journalist and the author of many books on 9-11 and the New World Order. These include 9-11 Evil: The Israeli Role in 9-11 and Phantom Flight 93.
(Issue # 19, May 11, 2009)