As federal investigators continue to look into potential criminal wrongdoing by executives at Freddie Mac and Fannie Mae, it has been discovered that the government also –likely unwittingly- has assumed the duty to defend these same executives in any prosecutions resulting from the investigations. The contracts for many of these individuals includes a stipulation that the companies, now controlled by the federal government as a result of their recent buyouts, will defend the executives in any proceedings arising out of their employment with the company. While the government likely had leverage to re-negotiate these terms prior to their buyout, it appears that any such leverage has now evaporated and a refusal to honor the 'duty to defend' term would likely result in a breach of contract claim being brought against the government.