Freddie Mac execs get blame

NEW YORK, July 24 (UPI) -- Former Freddie Mac executives have been accused of violating accounting rules to manipulate earnings reports.

The report says former CEO Leland Brendsel and president David Glenn directly participated in accounting and investment decisions designed to manipulate how the company reported profits.

In the most detailed look at the accounting scandal plaguing the mortgage lender, a board-ordered investigative report also says former execs withheld information from directors in an effort to present a pattern of steady earnings growth, USA Today reported Thursday.

"This is a painful day for Freddie Mac," chairman Shaun O'Malley said, promising the housing finance giant would make sure the situation was never repeated.

The 107-page report by the Baker Botts law firm says Freddie Mac's top executives used complex accounting practices to shape earnings reports despite regulatory oversight and independent board members. Unlike other scandals, in which companies inflated their earnings, Freddie Mac deferred income to smooth out its earnings from quarter to quarter, it said.