(Washington, D.C.) - The Council for Citizens Against Government Waste (CCAGW) applauds Rep. Mike Pence (R-Ind.) for co-sponsoring a bill aimed at protecting investors and increasing transparency within the nation’s largest publicly-traded government enterprises, Fannie Mae and Freddie Mac.

The Uniform Securities Disclosure Act (H.R. 4071), sponsored by Rep. Christopher Shays (R-Conn.) and Rep. Edward Markey (D-Mass.), would require the Government Sponsored Enterprises (GSEs) to register with the Securities and Exchange Commission and comply with SEC reporting and disclosure rules.  Fannie Mae and Freddie Mac are the only two Fortune 500 companies exempt from the SEC disclosure requirements.

“Questionable corporate governance and suspect accounting practices led Enron to sudden collapse,” CCAGW President Tom Schatz said.  “That event gave rise to an appropriate reevaluation of accountability practices in corporate America.  Rep. Mike Pence shows admirable prudence in supporting a bill that requires these two mortgage giants to do what every other publicly-traded company in the United States does.”

Fannie Mae and Freddie Mac own or guarantee 70 percent of the nation's home mortgages.  They provide a constant stream of liquidity to the mortgage market.  Recently, however, Fannie and Freddie have raised eyebrows by amassing a combined debt worth $1.26 trillion, up from $518 billion in 1997 (which makes for an annualized growth rate of nearly 25 percent).  They benefit from an implied subsidy amounting to $10.6 billion annually, along with the implicit promise of a taxpayer bailout in case of financial trouble.  The GSEs also engage in significant derivatives trading to hedge increasing risk.

“Fannie Mae and Freddie Mac continue to want to have the best of both worlds – freedom to amass huge profits while shifting the potential risk to taxpayers,” continued Schatz.  “These companies exist in a grey area between public and private.  Registration and regular reporting will provide investors, Congress, and taxpayers with better information on how these companies do business, what financial risks they face, and how they manage those risks.”

Fannie Mae and Freddie Mac claim to already be providing ample financial information voluntarily.  However, without legal parameters and adequate oversight, these practices could change at any time.

“Rep. Mike Pence shows great courage and statesmanship by putting fiduciary responsibility to taxpayers before politics to take a common sense approach to Fannie Mae and Freddie Mac,” concluded Schatz.  “Since the 1930s, Congress has recognized the need for a standardized system of mandatory and continuous disclosure of material information by securities issuers.  Fannie Mae and Freddie Mac should be subject to the same rules, and their disclosures should not be dependent upon their voluntary interpretation of what should be disclosed.”

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.