With Great Power Comes Great Responsibility

With Great Power Comes Great Responsibility

Recently, the Fairholme Fund attorneys hired a gentleman named Tim Howard to assist with their case. Mr. Howard is eminently qualified to help sift through the 800,000 pages expected to be produced during the discovery phase because he served as the CFO of Fannie Mae. The government’s reasoning for this is pretty flimsy – in our completely non-legal opinion – and yet, U.S. Judge Margaret Sweeney went along with it. Basically, Howard was the subject of investor lawsuits in which the government presumably provided for his defense. It is critical to mention that all of the suits were found to be without merit.

From Seeking Alpha:

“Yesterday, Judge Sweeney issued a ruling that said she would not allow Tim Howard, the former CFO of Fannie Mae, to participate in the discovery process. Judge Sweeney essentially agreed with the government that the risks involved outweighed the benefits and that having Tim Howard involved could have a ‘destabilizing effect on the nation’s housing market and economy.’”

There’s also this from Housing Wire:

“Government attorneys opposed Fairholme’s move to bring Howard on as an expert to view discovery, which is covered under a protective order. They argued that Howard’s knowledge and bias would cause ‘damage to the economy.’

Howard was hired by Fairholme Funds in their lawsuit against the U.S. Treasury.

Back in August, U.S. Judge Margaret Sweeney handed Fairholme Funds a huge victory when she ruled in favor of broad access in discovery to FHFA records going back years, rather than the narrow period in 2012 that the FHFA wanted to limit discovery to.

This opened up, on a limited basis, more than 800,000 documents to discovery.

Investors Unite Executive Director Tim Pagliara found the government’s excuses to be … fishy. Here’s the statement that he issued regarding this turn of events:

“The government has consistently opposed discovery of Treasury documents as being ‘dangerous’ to the economy, and has fought to keep them out of the public eye. Now it is opposing a qualified expert to view these documents over charges of ‘bias,’ even though he’s been out of the company for 10 years. Clearly, they’re hiding something, and that’s going to come out.

A number of other publications weighed in on this as well. Two are behind paywalls but some of our readers may have access:

Todd Sullivan’s ValuePlays: Breaking: Time Howard’s Access Denied

PoliticoPro: Judge Denies Former Fannie Exec Access to Docs

ValueWalk: Fannie Mae Privileged Info Could Threaten Financial Markets: Sweeney

We’ve never met Mr. Howard, but we imagine him to be a smart, pleasant, sharp individual. We suppose he has no idea of the great power he wields over the entire U.S. economy. We imagine he may have though such power to affect the country through reading and explaining documents was contained in offices that have an unusual shape, such as Oval. One hopes that Mr. Howard wields such power judicially.