Freddie Mac

(FRE)

, 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 corporatecrisis 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) - Get Report

, following the 1989 ExxonValdez 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.

Boerner declined to discuss the consulting firm's work. He said the firm began working for Freddie sometime after regulators forced the mortgage giant to oust Gregory Parseghian as its chief executive in late August.

In June, Freddie's board of directors turned to Parseghian, a longtime employee, to limit the damage from the accounting scandal, after the mortgage firm was forced to oust its three top executives. But Parseghiansoon came under fire when an internal investigation revealed that he had approved many of the same questionable accounting maneuvers that led to theouster of the three former executives.

Baker & Botts, a law firm hired by Freddie to investigate the accounting irregularities, found that the company's top executives used a series of sophisticated derivative transactions to deliberately massage thecompany's quarterly earnings and defer the recognition of profit until future years.

The accounting scandal at Freddie has increased calls on Capitol Hill for greater regulation of the mortgage firm and its bigger sister,

Fannie Mae

(FNM)

. Freddie and Fannie were chartered by the U.S. government to spur home ownership by making secondary markets in mortgages and mortgage bonds, and both have become highly profitable. But critics contend the mortgage giants have taken on too much debt and risk, and they want the businesses to be reined in.

The accounting issues at Freddie are being investigated by both the

Securities and Exchange Commission

and the Office of Federal HousingEnterprise Oversight, a 10-year-old agency that is the primary regulator of the two mortgage firms.