Executive at Freddie Mac Is Found Dead
April 22, 2009
By CHARLES DUHIGG
nytimes.com
The acting chief financial officer of the troubled mortgage giant Freddie Mac, David B. Kellermann, was found dead Wednesday morning at his home in Northern Virginia, the police said.
The executive apparently committed suicide by hanging himself, according to people with knowledge of the investigation.
A spokeswoman for the Fairfax County police said there were no signs of foul play. A police spokesman said that they would not comment on whether a note was found, but did say that no files or anything except the body have been removed from the house.
“We are not speculating as to the manner and cause of death. We’re going to wait for the medical examiner to give that information,” a spokesman for Fairfax County Police, Eddy Azcarate, told Reuters. “The body has been taken to the medical examiner’s office. We do not suspect foul play.”
Police were called to the home at 4:48 a.m., reportedly by Mr. Kellermann’s family. According to The Associated Press, Mr Kellerman lived in the home with his wife and daughter.
His body was taken away by the Fairfax Coroners Office shortly before 9 a.m. By then, the large home about 20 minutes outside Washington was surrounded by eight television trucks and about two dozen reporters. When a neighbor in a car inquired what had happened, and was told of Mr. Kellermann’s death, she began screaming and drove away.
Mr. Kellermann, 41, had been Freddie Mac’s chief financial officer since September. He was named to the position when the federal government seized the company and ousted its top executives last fall. In recent weeks, according to neighbors and company officials, Mr. Kellermann had received a bonus of about $800,000. Such bonuses — which totaled $210 million for executives at Freddie Mac and its sibling company Fannie Mae — caused some controversy earlier this month, and some lawmakers called for them to be rescinded.
According to neighbors, Mr. Kellermann hired a private security firm after reporters came to his house to ask about his bonus.
Some neighbors told The A.P. that Mr. Kellermann had lost a noticeable amount of weight under the strain of the job, and some said they suggested to him he should quit to avoid the stress. Mr. Kellermann was also involved in recent tense conversations with the company’s federal regulator over its public disclosures. Freddie Mac executives wanted to emphasize to investors that the company was being run for the benefit of the government, rather than shareholders.
The company’s regulator, the Federal Housing Finance Authority, had reportedly pushed to play down that language. Freddie Mac ultimately reported that it made changes to business practices to help the government that “have increased our expenses or caused us to forgo revenue opportunities.”
Mr. Kellermann’s death is the latest blow to the company. The chief executive, David M. Moffett, resigned last month after apparently clashing with the company’s regulator over compensation issues and independence.
In a statement, the interim chief executive of Freddie Mac, John A. Koskinen, said the company was saddened by the news of Mr. Kellermann’s death.
“We extend our deepest condolences to David’s family and loved ones for this terrible personal tragedy,” Mr. Koskinen said, adding that Mr. Kellermann would be “be most remembered for his affability, his personal warmth, his sense of humor and his quick wit.”
In a statement, Treasury Secretary Timothy F. Geithner said that “our deepest sympathies are with his family and his colleagues at Freddie Mac during this difficult time.”
Freddie Mac and Fannie Mae, which together own or back more than half of the home mortgages in the country, have been hobbled by skyrocketing loan defaults and have received about $60 billion in combined federal aid.
Mr. Kellermann had been with Freddie Mac for 16 years, and reported to the chief executive, according to a profile on the company’s Web site. He was responsible for Freddie Mac’s financial reporting, capital oversight, and compliance with federal oversight requirements, and also oversaw the annual budgeting and financial planning.
Before becoming chief financial officer, Mr. Kellermann had served as senior vice president, corporate controller and principal accounting officer. He was a graduate of the University of Michigan and a volunteer board member of the D.C. Coalition for the Homeless.
Regulators with the Securities and Exchange Commission and Department of Justice have been interviewing Freddie Mac officials about possible accounting violations and other topics, the company disclosed in March. It is not known if Mr. Kellermann was one of those interviewed.
The company recently disclosed in a public filing that in September it received a federal grand jury subpoena seeking documents concerning the company’s accounting, disclosure and corporate-governance practices. The investigation is being overseen by the United States Attorney’s Office for the Eastern District of Virginia. Freddie Mac has said it was “cooperating fully in these matters.”
The attorney general Eric H. Holder Jr., speaking to reporters at an Earth Day event, said he did not know whether Mr. Kellermann death was related to investigations of Freddie Mac.
“It’s obviously tragic but I don’t know anything more than what I’ve read,” Mr. Holder said, according to Reuters.
Jack Healy and Doug Mills contributed reporting
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