Report Is Kind to Fannie Mae

Updated from 8:24 a.m. EST

Ousted Fannie Mae(FNM Quote) CEO Franklin Raines was unaware that the mortgage company's accounting practices departed from generally accepted principles, an investigation led by former Sen. Warren Rudman concluded Thursday.

The investigation, conducted over a year at the request of Fannie Mae's board, did find that Raines "contributed to a culture that improperly stressed stable earnings growth and that, as the chairman and CEO of the company from 1999 through 2004, he was ultimately responsible for the failures that occurred on his watch."

Raines left the company in December 2004 as the accounting scandal exploded. The company, which was set up by Congress to create a secondary market in home loans, is in the process of a massive financial restatement that could lop $11 billion off its previously reported earnings. ...