Dartmouth Board of Trustees Chairman Ed Haldeman '70 has been named chief executive officer of Freddie Mac, the beleaguered government-sponsored loan organization, a statement from Freddie Mac confirmed on Tuesday. Media outlets including the Wall Street Journal had reported in early July that Haldeman was the leading candidate for the position.
Haldeman, who stepped down from his previous position as chairman of the board of directors of Putnam Investment Management on June 30, will likely begin to serve in his new position at Freddie Mac in August, according to the statement.
Haldeman will replace interim CEO John Koskinen, who will return to his previous position of non-executive chairman once Haldeman takes the position of CEO, according to media reports.
In an interview with The Dartmouth on Tuesday, Haldeman said he was contacted in June by a search firm and was asked if he would be interested in taking the position. Haldeman said he had just completed his transition at Putnam, leaving him available for consideration.
"I really wasn't looking for a next position, but when I was asked about this possibility, I was flattered," Haldeman said. "[I] concluded that this was a very important job and one where I thought I had some ability to add value."
Freddie Mac, which is formally known as the Federal Home Loan Mortgage Corporation, was placed in federal conservatorship earlier this year as the government began to respond to the sub-prime mortgage crisis.
Since 2007, the company has lost a net total of $64 billion. This spring, the company saw both the abrupt resignation of CEO David Moffett, who served as CEO for only six months before stepping down, and the suicide of finance chief David Kellerman.
"I am delighted to have an executive of [Haldeman's] caliber leading Freddie Mac at this critical time," Koskinen said in Freddie Mac's statement. "He has a wealth of experience in finance and an impressive record of successfully leading companies through challenging transformations."
Before being confirmed as CEO, Haldeman said he met with representatives from the search firm, and later with Freddie Mac board members and representatives from the Federal Housing Finance Agency and Treasury Department. He was then selected as CEO by the company board and confirmed by regulators at the FHFA, Freddie Mac's conservator, he said.
Haldeman told The Dartmouth that he has not yet decided whether he will remain as chairman of the College Board of Trustees. The recent resolution of several complicated College issues such as the presidential search and the expansion of the Board, as well as the scope of the task at Freddie Mac, will both be factors in his ultimate decision, he said.
Haldeman said he does plan to step down as Board chairman no later thanJune 2010, the end of the third year of his term, but may choose to relinquish his duties sooner based on the situation at Freddie Mac.
When Haldeman decides to step down from his position of Board chair, current vice chair of the Board John Donahoe '82, currently CEO and president of eBay, Inc., would serve as chairman until the Board elects a permanent replacement, College director of media relations Roland Adams told The Dartmouth in a previous interview.
On Tuesday, Haldeman said he believes Freddie Mac's first priority must be to support President Obama's "Making Home Affordable" plan, designed to stabilize the nation's housing market.
"I believe strongly in that program and think Freddie needs to play a leading role in that program," Haldeman said. "I think we at Freddie have to do everything we can to make sure that program is a success and that we keep as many families as possible in their homes."
Haldeman also hopes to encourage the company's employees and emphasize their role in the American economy, he said. .
Haldeman said he hopes to develop Freddie Mac's management team including a new COO and CFO largely from within the company.
Determining the future status of government-sponsored enterprises such as Freddie Mac will also be a main challenge of the position, Haldeman said, adding that he would like to see Freddie Mac involved in talks with the Department of Housing and Urban Development, the Treasury Department and the FHFA to develop an effective model for GSEs.
"I think it's easier for me to be open to a fresh look at what the right model is going forward I don't have a preconceived notion," he said. "For a while, I'm just going to try to listen to people, learn and think. Certainly at this point, I don't have any conclusion as to the right model going forward."
The appointment to Freddie Mac is not the first instance in which Haldeman has been called upon to stabilize an institution in the midst of crisis.
Haldeman served as president and director of United Asset Management Corporation from 1998 to 2001, as the company faced declining confidence among investors. Haldeman sought to reduce the company's investment losses by restructuring its operations, bringing UAM's 53 independent subsidiaries under greater central control, The Boston Globe reported in 1998.
During two years as CEO of Delaware Investments, following his time at UAM, Haldeman worked to reverse the Philadelphia-based financial management firm's history of negative investment returns. He returned the company to profitability, increasing its investment returns by more than $6 billion, Investment News reported in 2002.
Haldeman's approach to improving Delaware Investments garnered some criticism, however, as he removed nearly half of the company's investment managers, many of them longtime employees, in favor of new advisors from outside the company, according to Investment News.
Haldeman was selected to be president and CEO of Putnam Investment Management in 2003, following a series of trading scandals that seriously damaged the company's reputation. He was elected chairman of Putnam's Board of Directors in 2007 and has been credited with furthering compliance and ethics standards at the company. He stepped down as president and CEO in June 2008, but remained as chairman.
While Haldeman succeeded in stabilizing Putnam, he could not turn around its performance. The company managed assets estimated at $370 billion in 2000, according to The Wall Street Journal, but Putnam's quarterly performance report stated that the company held $186 billion by the end of 2007, a decline of over 50 percent.
Haldeman did, however, manage to move Putnam toward a more conservative investment approach. Many of the company's previous losses had been due to investment in higher-risk stocks, a practice that Haldeman limited during his tenure, The Boston Globe reported.
Haldeman joined Dartmouth's Board of Trustees in 2004 and was elected chairman in 2007. A major contributor to the College, Haldeman and his wife gave $10 million in 2004 to support the construction of the Haldeman Center, which houses the Dickey Center for International Understanding, the Leslie Center for the Humanities and the Ethics Institute.
During his time at Dartmouth, Haldeman majored in economics, graduating summa cum laude before attending both Harvard Business School and Harvard Law School. Two of his three children, Catherine Haldeman '08 and Charlotte Haldeman '03, also attended the College.
Article first posted on July 21, 2009 at 12:19 p.m.
