asked Rep. Richard Baker, R-La., a frequent critic of Freddie and Fannie Mae, at the start of hearings by the House Financial Services Committee on Capital Markets. Baker, chairman of the panel, was referring to the disclosures by Freddie Mac just an hour before that the previously announced accounting questions at the company could result in a restatement of after-tax earnings upwards of as much as $4.5 billion for the previous three years (as much as $6 billion before taxes). While the under-reporting of earnings raises different questions than the overstatement by such corporations as Enron, Worldcom and Global Crossing, it has tremendous ramifications for investors, many of whom may have sold their stock based on the lower earnings figures, Baker pointed out. "What is even more troubling than the restatement at Freddie Mac is the realization that market observers looked past the corporate misstatements and directly into the taxpayers' pockets," said Baker.