By Jonathan Weil

If you enjoy theater of the absurd, it's hard to beat the Securities and Exchange Commission's press release today about the agency's lawsuits accusing six former Fannie Mae and Freddie Mac executives of securities fraud.

The caption immediately below the main headline says: "Companies Agree to Cooperate in SEC Actions."

Now, let's see. Fannie and Freddie are wards of the state, majority-owned by the Treasury Department. And their conservator, the Federal Housing Finance Agency, has total control over everything they do. Getting those cooperation agreements from the companies must have been a real toughie.

Then there's this: "Fannie Mae and Freddie Mac each entered into a non-prosecution agreement with the commission in which each company agreed to accept responsibility for its conduct and not dispute, contest, or contradict the contents of an agreed-upon statement of facts without admitting nor denying liability."

So you see, it's not just the Citigroups of the world that benefit from these neither-admit-nor-deny deals that the public despises so much. Government-owned companies get to take advantage of them, too. And why not? They need protection from the government as well, right?

Another noteworthy part about the two lawsuits against the six former Fannie and Freddie executives -- unlike the companies, they are contesting the SEC's allegations -- is that the word "accounting" doesn't appear in either suit. The SEC accused the defendants of disclosure fraud, but made no mention of any possible accounting violations at the companies, notwithstanding that the twin collapses of Fannie and Freddie marked one of history's great accounting scandals.

Oh well, the government must have had its reasons. Maybe the companies' regulators knew how Fannie and Freddie were cooking their books all along.

(Jonathan Weil is a Bloomberg View columnist.)


-0- Dec/16/2011 19:21 GMT