Gretchen Morgenson is our favorite financial reporter, so we turned with interest to her piece in the NY Times, entitled After Crisis, A Cash Flood And Silence, Feb. 15, 2015, p. 1 of the Business Section, bringing the dispatch that there is another taking lawsuit pending in the U.S. Cort of Federal Claims. In it, shareholders of Fannie Mae and Freddie Mac are suing Uncle Sam to recover large profits made by those entities after the 2008 crash, Uncle Sam’s bailout and Uncle’s expropriation of all their earnings which with time have grown enormous. Click on http://www.nytimes.com/2015/02/15/business/after-the-housing-crisis-a-cash-flood-and-silence.html?ref=business&_r=0
The article does not go into the details of the taking, other than informing its readers that as of 2012 the Treasury unilaterally amended its contract with Fannie and Freddie and has been sweeping profits into the Treasury. Some $$225.4 billion so far, with another $153.3 billion anticipated.
The article dwells instead on the details of Uncle Sam’s take-no-prisoners resistance to plaintiffs’ discovery, that seems to be reaching the level of the absurd (including, believe it or not, press releases). Why? The answer to that question is unclear, but the Times article suggests that it may have something to do with the surmise that the documents in question “directly implicate some of the president’s most senior advisers in the White House.” If true, this would tend to compromise Fannie and Freddie’s status as independent federal agencies.
But be all that as it may, here is another case — by our count the third one — in which a claim is being litigated on the merits in the Court of Claims, charging that Uncle Sam’s bailout activities following the crash of 2008, were takings of property in violation of the Taking Clause of the Fifth Amendment. So stay tuned, and see how this one turns out.