Police investigating death of Freddie Mac
official
WASHINGTON - The chief financial officer of money-losing
mortgage giant Freddie Mac was found dead in his basement early
Wednesday morning in what police said was an apparent suicide. A
law enforcement official familiar with the investigation said it
was an apparent hanging. He declined to be identified because the
investigation was ongoing.
David Kellermann's death is the latest in a string of blows to
Freddie Mac since it was seized by the government last September.
The company, which owns or guarantees about 13 million mortgages,
has been criticized for financing risky loans that fueled the real
estate bubble and are now defaulting at a record pace.
Freddie Mac lost more than $50 billion last year, and the
Treasury Department has pumped in $45 billion to keep the company
afloat. Last month, David Moffett, the government-appointed chief
executive, resigned apparently frustrated by strict oversight.
Kellermann worked for Freddie Mac for the past 16 years,
starting out as a financial analyst and auditor. He was named
acting chief financial officer last September when the government
ousted former CEO Richard Syron and Kellermann's predecessor
Anthony S. "Buddy" Pizsel.
Neighbors said Kellermann, 41, had lost a noticeable amount of
weight under the strain of the new job. Some neighbors said they
suggested to Kellermann he should quit to avoid the stress, but
Kellermann responded that he wanted to help the company through its
problems. The neighbors did not want to be quoted by name because
they didn't want to upset the family.
As the company's financial chief, Kellermann was working on the
company's first quarter financial report, due at the end of May,
with federal regulators closely overseeing the company's books and
signing off on major decisions.
That relationship has been tense at times. Freddie Mac
executives recently battled with federal regulators over whether to
disclose potential losses on mortgage securities tied to the Obama
administration's housing plan, said a person familiar with the
deliberations who was not authorized to discuss the matter
publicly.
Federal prosecutors in Virginia have been investigating Freddie
Mac's business practices. But two U.S. law enforcement officials,
who spoke on condition of anonymity because they were not
authorized to discuss the Freddie Mac investigation, said
Kellermann was neither a target nor a subject of the investigation
and had not been under law enforcement scrutiny.
Police responded to a 911-call at 4:48 a.m. at the suburban
Virginia home Kellermann shared with his wife Donna and 5-year-old
daughter Grace.
The Kellermanns live in Hunter Mill Estates, a well-off
neighborhood of large single-family homes with manicured lawns in
Fairfax County. County records show Kellermann's home is assessed
for 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, a University of Michigan graduate who went to
business school at George Washington University. 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. Senior executives at
the company heard the news on local radio before going to work.
Freddie Mac canceled a bond offering on Wednesday, as top
Freddie Mac officials visited the family's house to offer
condolences. John Koskinen, the company's interim chief executive,
spoke to workers at an 11 a.m. staff meeting mourning Kellermann's
loss, telling employees that they could use the company's
counseling services.
In statement e-mailed to employees and the media, Koskinen
called Kellermann "a man of great talents .... His extraordinary
work ethic and integrity inspired all who worked with him."
Treasury Secretary Timothy Geithner said in a statement that
"our deepest sympathies are with his family and his colleagues at
Freddie Mac during this difficult time."
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. Kellermann was in line to receive retention awards
totaling $850,000 over the next year.
--AP