Barack Obama's chief of staff, Rahm Emanuel, served on the board of directors of Freddie Mac at when the scandal was brewing and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com.
A complaint later filed by the Securities and Exchange Commission, alleged Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.
Although Emanuel was not named in the SEC complaint the entire board was later accused by the Office of Federal Housing Enterprise Oversight of "failing in its duty to follow up on matters brought to its attention."
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