David Kellermann, Freddie Mac CFO, Said To Have Committed Suicide (SLIDESHOW)
UPDATE: 11:55 PM: The Washington Post reports more new information about Kellerman's apparent suicide, including the heartbreaking detail that his wife discovered him hanging from a piece of exercise equipment in the basement.
In addition, he was not immune to some of the recent controversies at Freddie Mac:
He and a group of company attorneys tussled with its regulator in early March as the firm prepared to file its quarterly earnings report with the Securities and Exchange Commission. The group insisted that Freddie Mac inform shareholders of the cost to the company of helping carry out the Obama administration's housing recovery plan. The regulator urged the company not to do so, according to several sources familiar with the matter. An FHFA official contested that account, saying the regulator did not oppose disclosure but how the information was portrayed in the filing.
UPDATE 11:30 PM: More details have emerged about the last few months of David Kellerman's life. According to the New York Times, he was alarmed by the public outcry over bonuses, he arranged security guards to watch his home.
Then early this month, Mr. Kellermann and other executives at Freddie Mac and Fannie Mae became the focus of intense scrutiny when lawmakers learned they would receive bonuses totaling $210 million. Mr. Kellermann was set to receive $850,000 over 16 months. Reporters and camera crews showed up at his home in Vienna, an affluent Virginia suburb of Washington. Fearing that someone might attack his house, his wife or their 5-year-old daughter, he asked the company for a security detail.
According to colleagues, the usually jovial Kellerman had appeared "stressed and overwhelmed by the job." The Wall Street Journal reports:
"He worked himself into a frazzle," a former co-worker said. Colleagues said Mr. Kellermann was involved in dealing with investigations into Freddie's accounting by the Justice Department and the Securities and Exchange Commission, but that there was no indication he was a target or that the inquiries were causing him anguish.
UPDATE 12:35: SEC, Justice Department investigating accounting practices at the agency:
The Wall Street Journal is reporting that the SEC and the Justice Department have been questioning Freddie Mac "officials" on possible accounting violations. The company made the disclosure in an SEC filing in March:
Freddie disclosed in the recent SEC filing that in September it received a federal grand jury subpoena from the U.S. Attorney's Office for the Southern District of New York seeking documents related to accounting, disclosure and corporate-governance matters. That subpoena was later withdrawn, Freddie has disclosed, and the investigation was taken over by the U.S. Attorney's Office for the Eastern District of Virginia.
"We know of no connection between this terrible personal tragedy and the ongoing regulatory inquiries discussed in our recent SEC filing," said David Palombi, Freddie's chief spokesman.
UPDATE 11:30 AM EST: Treasury Secretary Timothy Geithner issued a statement on acting Freddie Mac CFO David David Kellermann's death:
"On behalf of the Treasury we are deeply saddened by the news this morning of David Kellermann's death. Our deepest sympathies are with his family and his colleagues at Freddie Mac during this difficult time."
***Click here for AP updates on the Kellerman case***
WASHINGTON - David Kellermann, the acting chief financial officer of money-losing mortgage giant Freddie Mac was found dead at his home Wednesday morning in what police said was an apparent suicide.
The Fairfax County police responded to a 911-call at 4:48 a.m. at the suburban Virginia home Kellermann shared with his wife. The police would not release the cause of death or say if a suicide note was found.
See a slideshow of the scene at Kellerman's house this morning:
Kellermann, 41, lived in Hunter Mill Estates, a well-off neighborhood of large single-family homes with manicured lawns. County records show Kellermann's home is worth about $900,000.
Paul Unger, who lives across the street from the Kellermanns, called the family a "solid, salt-of-the-earth kind of family" that hosted the neighborhood's Halloween party. "He was just a nice guy ... You cannot imagine what kind of pressures he must have been under," Unger said.
Kellermann worked for Freddie Mac for the past 16 years and was named acting chief financial officer last September when the government seized control of the company to keep it from failing. Freddie Mac lost more than $50 billion last year, and the government has pumped in $45 billion to keep the company afloat.
Kellermann's death is the latest in a string of blows to Freddie Mac, which owns or guarantees about 13 million mortgages and us the No. 2 mortgage finance company after sibling Fannie Mae. The company has been criticized for financing risky mortgage loans that fueled the real estate bubble, and its first government appointed CEO, David Moffett, resigned last month after six months on the job.
News of Kellermann's death came as a shock to employees of the McLean, Va.-based company, with those who knew Kellermann tearing up on Wednesday morning and a quiet mood prevailing.
Early Wednesday, Sharon McHale, a Freddie Mac spokeswoman, said senior executives at the company heard the news on local radio before going to work. "It's just so awful," she said.
John Koskinen, the company's interim chief executive, said in a statement that Kellermann, "was a man of great talents .... His extraordinary work ethic and integrity inspired all who worked with him."
Freddie Mac and sibling company Fannie Mae have both come under fire from lawmakers as they plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs. While Fannie Mae has disclosed the names of executives in line for the bonuses, Freddie Mac has yet to do so.
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Associated Press Writer Matt Small contributed to this report.
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| 04/23/09 11:15 AM