“I would say more, but I don’t want somebody knocking on my door and asking for $50,000 back. It’s almost like bribery; I felt that I was supposed to sign the agreement, take the money and keep all their secrets.”
-former Freddie Mac employee who worked on internal financial controls.
I find this fascinating: Some people simply do not understand basic contractual freedoms between consenting adults. Others do not understand the concept of ethics. And, they want the free lunch, no personal responsibility, having it both ways. They want the money but not the obligations it comes with.
Sorry, that ain’t how it works.
Here’s the story: Former Freddie Mac employees, who upon departing FMC, were required to sign nondisclosure agreements (NDAs) as part of the severance package. These employees are now being requested to violate those agreements in civil — not criminal — litigation. Under the law, you cannot privately contract not to answer questions from government prosecutors and investigators in any criminal case or in a regulatory proceeding. Really smart class action lawyers try to get a criminal case going simultaneously.
But as to writing books, newspaper articles or appearing as witnesses in a civil case?
Sorry, but that is simply not how contract laws work in the US. You, as an employee, do not have to accept the money in exchange for your silence. But you did. If you feel dirty because you agreed to keep what you know to yourself in exchange for cash — well, you should feel like the dirty whore you are — you sold your silence and your soul to the highest bidder. THATS WHAT YOU WERE PAID FOR NOW SMILE FOR THE CAMERA.
Barring a court order — and I suspect its unlikely we will get one — former employees are prohibited from cooperating with the civil lawsuits against Freddie Mac.
Now, you may say that sucks, and how evil Freddie Mac is. But let’s not ignore the folks who signed on the dotted line and sold their silence. They may have regrets now, but that’s what happens when you let cash trump ethics. Like the people who knew their CDOs would blow up, as well as the buyers who knew they could not possibly afford the house they were buying. Bad decision making process, bad outcome.
At some point, we have to make adults who make scummy decisions in exchange for cash own those decisions, and take responsibility for what they did.
Freddie Mac’s Secrecy Pacts Face Court Test
EDMUND L. ANDREWS
NYT, October 22, 2009