REPORT POINTS TO FORMER FANNIE CFO: An exhaustive internal report on the accounting woes of mortgage finance giant Fannie Mae says that the company's former chief financial officer, J. Timothy Howard, was "primarily responsible" for deviating from generally accepted accounting principles. The accounting irregularities led to a $10.8 billion restatement and also misled Fannie Mae's board of directors, which commissioned the report. Former New Hampshire Senator Warren Rudman, who authored the 2,600-plus page report, did say that "ultimate responsibility" for the mistakes lay with former chief executive Franklin Raines.The report details about 20 accounting issues at the company, but revealed no additional mistakes other than those already disclosed during a 16-month federal and internal probe.

"The report suggests that, because these subjects are so complex, the staff in the trenches can easily manipulate the board, and maybe even senior managers, about what is really going on below," said American Enterprise Institute resident scholar Peter J. Wallison. "That does not give me any comfort."

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