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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND UNITED STATES OF AMERICA and OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT : v. :

: Civil Action No. DKC 2003-3440 :

VAUGHN CLARKE : MEMORANDUM OPINION Petitioners, United States of America and Office of Federal Housing Enterprise Oversight (OFHEO), seek an order compelling Respondent Vaughn Clarke to comply with a subpoena to provide testimony and produce documents relating to a purported "special examination" being conducted by OFHEO into the safety and

soundness of the Federal Home Loan Mortgage Corporation (Freddie Mac). granted. Background Respondent was employed by Freddie Mac from August 1998 until June 9, 2003, as Executive Vice President and Chief For the reasons that follow, the petition will be

Financial Officer.

On December 3, 2003, Petitioners filed a

Petition for Summary Enforcement of Administrative Subpoena Duces Tecum and a Motion for Order to Show Cause. filed an Opposition, Petitioners replied. Respondent

Just before the

scheduled hearing, Respondent filed a letter with attachments,

to which Petitioners again replied. held on January 23, 2004.1

A show cause hearing was

Two declarations have been submitted from David Roderer, Deputy General Counsel of OFHEO. In the first, he states that

OFHEO is conducting an examination into conduct of Freddie Mac. The examination arose out of the announced delay in publication of Freddie Mac's financial statement for 2002, and the

restatements for 2000 and 2001.

He avers that: "The uncertainty

that surrounds Freddie Mac's ability to produce timely and accurate financial statements threatens investor confidence and could, unless promptly and decisively corrected, greatly

increase Freddie Mac's cost of funds, impairing its safe and sound operation." Paper 1, Ex. 3 at

Download United States v. Clarke (Memorandum).pdf

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