What was already shaping up to be an exciting week with Mel Watt’s appearance at the House Financial services tomorrow just moved up a notch with the joint status report that was filed in the Fairholme Lawsuit today. There will now be a status conference held on Wednesday.The topics to be addressed are as follows:

“Pursuant to the Court’s August 13 Order, the parties further provide the following “summary description of the topic areas” that they may wish to discuss at the status conference: (1) the general status of the discovery previously authorized by the Court; (2) Plaintiffs’ concerns regarding the pace at which Defendant is discharging its obligation to produce both responsive documents and privilege logs for those documents that Defendant has withheld from production; (3) Plaintiffs’ concerns regarding Defendant’s wholesale designation of all materials produced in discovery as Protected Information and its apparent failure to review the propriety of those designations; (4) Defendant’s concerns regarding Plaintiffs’ stated intent to seek the deposition testimony of current and former executives of Fannie Mae and Freddie Mac, including the chief executive officers; and (5) the schedule for briefing and consideration of possible discovery motions relating to the above topics, including a motion to extend the period of discovery.”

What was contained in the status report concerning the government’s failure to comply should come as no surprise. Recall that on 12/18, we posted this:

“REDACTED RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION TO STAY ALL PROCEEDINGS (Fairholme lawsuit) now take a look at the bottom of page 16:

“For example, analyses that were prepared in July 2012 on the basis of the Treasury “scenarios” projected, inexplicably and suspiciously, much lower net income for Fannie in subsequent years—approximately a 50% reduction for most years—than had internal Treasury analyses that had been prepared only a month earlier, in June 2012. Compare T3847 (June analysis) (attached as Ex. C) with T3889 (July 2012 Treasury analysis) (attached as Ex. B). Again, documents produced thus far by the Government do not purport to explain or justify all of the differences between the scenarios. The production of such critically important documents will cause little if any burden to the Government.”
“The Government’s failure thus far to produce many of the financial projection documents discussed above is especially curious in light of the fact that many documents produced in third party discovery (by Fannie, Freddie, and their auditors)”
Fairholme made it clear that the government was withholding key evidence.


Judge Sweeney is sure to be thrilled that our government is continuing to defy her orders. This astounding lack of regard surely is not helping the government in their motion to stay discovery.Once again the governments seemingly irrational behavior likely reflects the fact that they know that if they turn over everything they have their guilt will be undeniable.

Now take a look at this gem:

(4) Defendant’s concerns regarding Plaintiffs’ stated intent to seek the deposition testimony of current and former executives of Fannie Mae and Freddie Mac, including the chief executive officers;

It is great seeing discussions begin regarding depositions. The current and former CEOs can single-handedly blow the government’s case out of the water. Judging by recent comments made by the current CEOs I am sure they are looking forward to this as much as us.

I hope to get a post up later tonight concerning the battle brewing tomorrow with Mel Watt’s appearance at House Financial Services. http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=398622
There are PDF files attached below with today’s court documents. Also, we have posted the recent documents concerning the Ackman/Commons victory on the appropriate pages above. This was not a surprise but a victory none the less.

Keep the faith!


Order-Staus conference 1:28:15 2