Freddie Mac Hires Spin Doctor Ahead of Restatement

Freddie Mac(FRE - Cramer's Take - Stockpickr), which is being investigated by federal regulators for accounting irregularities, is preparing damage control.

The nation's second-biggest buyer of mortgages has retained Rowan & Blewitt, a Virginia-based consulting firm that specializes in corporate crisis management. The consulting firm has been quietly working behind the scenes with Freddie for the past several months.

The firm's Web site says Rowan & Blewitt has a "distinguished track record" of helping "major corporations and organizations deal with threats to corporate reputation, brand value, market value and profitability." In the past, Rowan & Blewitt worked with Exxon(XOM - Cramer's Take - Stockpickr), following the 1989 Exxon Valdez oil spill.

Rowan & Blewitt is on hand as Freddie prepares to release a long-awaited restatement of its earnings for the past three years. The restatement, originally scheduled to be released by PricewaterhouseCoopers and Freddie in September, could be made public by the end of this week.

In advance of the restatement, sources said Rowan & Blewitt has been trying to line up accounting experts and other professionals to talk about with reporters covering the government-sponsored mortgage finance firm.

Freddie previously has said it expects the restatement to boost past earnings by as much as $4 billion, but reduce future earnings and cause more quarter-to-quarter volatility. But the news that the firm has brought in a damage-control team could fuel speculation that the restatement may not meet Wall Street's expectations.

A spokesman for Freddie, which has its own in-house media affairs team, could not be reached for comment. But Hank Boerner, managing director of Rowan & Blewitt, confirmed that the firm is working with Freddie.

"I don't think the organization is in crisis, but they are dealing with a number of issues," said Boerner.

Meanwhile, Freddie issued a press release Monday saying it had retained the services of Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. Elson is frequently quoted by the news media in stories on corporate governance reform. Elson will work with Freddie and its board of directors to strengthen the company's corporate governance practices, policies and guidelines.