United States General Accounting Office

GAO Report to the Chairman, Committee on

Governmental Affairs, U.S. Senate

October 1994 FAILED FINANCIAL

INSTITUTIONS

RTC/FDIC Risk Fraud

and Mismanagement

by Employing Those

Deemed Culpable

GAO/OSI-95-1

GAO United States

General Accounting Office

Washington, D.C. 20548

Office of Special Investigations

B-257933 

October 3, 1994

The Honorable John Glenn

Chairman, Committee on Governmental Affairs

United States Senate

Dear Mr. Chairman:

As you know, GAO identified the cleanup of failed, federally insured savings

and loan institutions (thrifts) as 1 of 17 federal program areas that are

especially vulnerable to fraud, waste, abuse, and mismanagement. The

Resolution Trust Corporation (RTC) now largely controls the cleanup, and

the Federal Deposit Insurance Corporation (FDIC) will assume complete

control of the cleanup by 1996. This report responds to your concerns as

to whether RTC and FDIC (the Corporations) have sufficient systems to

assist hiring and management officials in identifying job applicants and

current employees for whom the Corporations had made culpability

determinations.1

 You were also concerned that the Corporations do not

share information about the determinations.

At your request, we limited our investigation to those positions that had

disposition responsibilities for the failed institutions’ assets (vital

positions). We also examined whether sufficient systems exist to inform

RTC management of culpable nonfederal employees who hold vital

positions in thrifts that are operating in conservatorship under RTC control.

Results in Brief The Corporations are vulnerable to fraud, abuse, or mismanagement

because they do not systematically screen employees or applicants to

determine if they have been found culpable in the losses that caused

institutions to fail. If the Corporations attempted to implement a

systematic employment screening process for culpability determinations,

all necessary information would not be in their existing databases. For

example,

• The Corporations’ databases of culpable individuals are not complete in

that they do not include the names of all culpable directors and officers of

failed institutions. Notably, they do not always include the names of

culpable employees if the Corporations have determined that legal action

would not be cost-effective.

1

Determinations of “culpability” are administrative determinations made by the Corporations based on

the Corporations’ own belief that sufficient evidence exists to file a professional liability suit or submit

a criminal referral to the Department of Justice. These determinations are administrative in nature and

may be followed by civil suit or criminal prosecution.

Page 1 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

• Social security numbers or other personal identifiers of culpable

individuals are often not included in the Corporations’ databases, making

positive identification difficult.

• RTC’s database of professional liability suits against individuals it has

determined to be culpable includes the names of individuals against whom

no suits have been filed.

The Corporations also have no systematic means for promptly notifying

managers and supervisors of employees against whom a culpability

determination has been made. Even if notified of such determinations,

managers have no clear policy and guidance concerning what action, if

any, should be taken regarding those identified.

Further, the Corporations do not systematically share information

regarding individuals each has found culpable for institution failures, thus

increasing each Corporation’s vulnerability.

Thus, during our investigation, the Corporations and we separately

identified certain employees of RTC, FDIC, and conservatorship institutions

who had previously been determined to be culpable yet who held vital

positions. In addition, the Corporations’ vulnerability may not be limited to

these identified employees because of the systemic problems identified

above. For example, RTC does not maintain a database of “non-federal

conservatorship employees,”2

 including those who perform asset

disposition functions.

In addition, RTC does not subject conservatorship employees to the

integrity requirements of the Financial Institutions Reform, Recovery, and

Enforcement Act (FIRREA), the basic law that governs RTC, although the law

clearly covers them. However, many conservatorship employees perform

RTC functions and activities and thus add to RTC’s vulnerability.

As a result of these and other shortcomings, the Corporations’

vulnerability to fraud, abuse, or mismanagement from culpable individuals

in vital positions is significant, given the positions they hold and the value

of the assets they control. The Corporations need to address these

vulnerability issues to ensure the proper disposition of the failed

institutions’ assets and to protect insurance funds’ and taxpayers’

interests. Because RTC is transferring its assets and operations to FDIC by

1996, we are making recommendations to the Corporations to assist them

as they prepare for the transition period.

2

Employees of the failed institutions, as defined by the RTC Conservatorship Operation Manual.

Page 2 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

Background The Financial Institutions Reform, Recovery, and Enforcement Act

(FIRREA) established RTC in 1989 to contain, manage, and resolve hundreds

of failed thrift institutions. The Federal Deposit Insurance Corporation

Improvement Act of 1991 clarified or expanded RTC’s and FDIC’s

responsibilities for resolving failed thrifts and banks. As of April 25, 1994,

RTC was responsible for resolving 743 thrifts. From fiscal year 1990 to

May 19, 1994, FDIC was responsible for resolving 465 failed banks. Under

the RTC Completion Act, RTC is to cease operating by December 31, 1995.

After that date, FDIC will become responsible for (1) resolving the thrifts

that fail after June 30, 1995, and (2) completing the disposition of thrift

assets remaining in RTC’s inventory.

When RTC assumes control of an institution, its Office of Investigations and

its Legal Division’s Professional Liability Section work together. They

determine which institution officers and directors, if any, are responsible

for, or culpable in, the losses that resulted in the institution’s failure. Once

these administrative determinations are made, RTC generally then files a

professional liability suit or submits a criminal referral naming the

culpable individuals. FDIC operates in much the same manner.

Between its inception and June 30, 1994, RTC filed 245 professional liability

suits against directors and officers, of which 181 are pending, and made

1,134 criminal referrals to the Department of Justice. FDIC had

approximately 400 professional liability suits against directors and officers

between January 1990 and July 1994, of which 120 are pending. In

addition, FDIC filed 998 criminal referrals in that same period.

RTC/FDIC Are

Vulnerable

RTC and FDIC are vulnerable to fraud, abuse, and mismanagement because

they do not systematically screen job applicants or current employees to

determine if they have been found culpable in the losses that caused

federally insured institutions to fail. The Corporations have no systems

designed to screen prospective employees to determine if the

Corporations have found them culpable in the failures. In addition, after

the Corporations make culpability determinations, they have no systems to

verify whether they or a conservatorship institution currently employ the

individuals deemed culpable.

Page 3 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

Shortcomings of

Existing Corporation

Databases

The Corporations’ databases concerning professional liability suits and

criminal referrals are not designed to be used for employment screening

and contain a number of shortcomings for performing this function. First,

the databases are incomplete: Names of culpable individuals against whom

legal action was not cost-effective3

 are not always included in Corporation

databases, and criminal referral listings to the Department of Justice are

incomplete. Second, configuration of the Corporation databases

constrains their usefulness in locating names of culpable individuals.

Third, one RTC database incorrectly lists individuals as culpable when they

are not. These shortcomings become critical when verifying whether

prospective employees for, or current employees in, some vital capacity

have been found culpable for institution failures.

Corporations’ Databases of

Culpable Individuals Are

Incomplete

The Corporations’ databases of culpable individuals are incomplete,

continuing to leave them vulnerable to fraud and mismanagement. For

example, the Corporations do not always include in their databases the

names of those individuals found culpable for institution failures if RTC and

FDIC have determined that legal action would not be cost-effective.

In addition, FDIC criminal referral listings are incomplete. After we

compared all FDIC criminal referrals filed with Justice for one failed bank

with an FDIC listing of all criminal referrals filed in the past 5 years, we

found over half missing from the FDIC listing. FDIC had filed criminal

referrals against eight individuals from the failed bank between November

1990 and February 1991, yet only three of the names were on its criminal

referral listing. As a result, if the Corporations had performed employment

screening, they would have been unaware of the culpability of the five not

on the listing. FDIC acknowledged that the criminal referral listing, which

came from a database not designed for employment screening, is not

appropriate for this purpose due to the number of errors it contains.

A similar situation exists with the RTC databases. RTC acknowledged that

because each RTC region is responsible for entering its own data, some

may not have entered all of the professional liability suit and criminal

referral data necessary to make this database an integral part of an

accurate screening system. This inconsistent reporting occurs because

each region has discretion about how much information is placed in the

system.

3

The Corporations consider the litigation’s cost, the value of the claim, and the potential defendant’s

ability to pay any resulting judgment before pursuing a professional liability suit.

Page 4 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

Format/Organization of

Databases Make

Employment Screening

Difficult

The Corporations’ databases lack systematic means to identify culpable

individuals, and the organization of FDIC’s database of professional liability

suits constrains its usefulness. Both situations increase Corporation

vulnerability.

None of the Corporations’ databases pertaining to professional liability

suits or criminal referrals systematically provide social security numbers

or other similar identifiers necessary to make a positive identification for

similar names. To perform our verification when social security numbers

were not available, we requested individuals’ home addresses and dates of

birth from the Corporations. These were sometimes available only on

documents maintained by outside legal counsel.

Further, the organization of FDIC’s professional liability suit database,

containing over 1,500 individuals’ names, is such that it constrains the

usefulness of the database for employment screening. It does not have the

capability to retrieve defendants by name. Instead, this database, which

FDIC officials acknowledged would be difficult to use for employment

screening, identifies failed institutions resolved by FDIC, each followed by a

list of defendants’ names. Therefore, we were unable to determine

whether the Corporations employed any of these individuals in vital

positions.

RTC Professional Liability

Suit Listing Incorrectly

Included Two Individuals

as Defendants

RTC had never filed suit against two other RTC employees we found on its

professional liability suit listing. RTC included these two names on the

listing because it routinely enters the names of all directors and officers

from a failed institution in the database from which it drew the listing. RTC

told us that this database was not designed, nor ever intended to be used,

for employment screening.

RTC and FDIC Did

Not Communicate

Culpability

Determinations

Promptly

Neither RTC nor FDIC has established a systematic means for

communicating determinations of culpability to managers in a timely way.

Managers become aware of culpability determinations made against

current employees through happenstance. However, early notification

would allow managers to evaluate and determine, in a timely manner,

whether to restrict the employees’ duties and responsibilities or to

evaluate their employment status. Such action would help limit the

Corporations’ vulnerability to fraud, abuse, and mismanagement.

Page 5 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

For example, RTC hired an individual in January 1990 as a credit specialist

to manage a conservatorship institution with $1.9 billion in assets. RTC filed

a professional liability suit against him in December 1992. Being unaware

of the suit, a senior manager at the regional RTC office offered the

employee a new position (and a paid move) 4 days after RTC had filed the

professional liability suit. In fact, the manager did not learn of the suit for

11 days after making the offer (15 days after RTC had filed suit). After

learning of the suit on December 28, 1992, the manager acted to limit RTC’s

vulnerability: He restricted the individual from all RTC offices and placed

him on a fully paid administrative-leave status for approximately 1 month

until his employment was to expire because the local RTC office was

closing. Previously, the credit specialist’s duties included (1) providing

guidance, direction, and control to the institution through the

documentation and inventory of assets; (2) directing the sale of owned

real estate and loans; and (3) assuming, in the absence of the managing

agent in charge of the RTC conservatorship institution, the responsibilities

and delegated authorities of the managing agent.

In another instance, RTC filed a professional liability suit against the Vice

President for Loan Workout4

 (a conservatorship employee) at an RTC

conservatorship institution having over $200 million in assets. Following

the filing of the suit in December 1992, RTC sent a letter to the individual’s

residence requesting that he resign. RTC did not inform the managing agent

in charge of the RTC conservatorship institution where the vice president

worked of either the suit or the letter. According to the managing agent, he

was unaware that RTC had determined the vice president to be responsible

for the failure of an institution until the employee showed him a copy of

the RTC letter. The managing agent thus had no opportunity to consider

revising the vice president’s duties and limiting RTC’s vulnerability. A

Virginia newspaper published an article about RTC’s employment of the

vice president. The article, entitled “Thrifts: From One Failure to Another,”

stated that when RTC filed suit against the individual, it did not have to look

far for the defendant as he was working a block away at another failed

thrift being managed by RTC.

4

The Corporations use “workouts” to develop the planned disposition of assets with regard to their

price and purchaser.

Page 6 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

RTC/FDIC Policy

Unclear as to What

Action to Take

Regarding Those

Found Culpable

In January 1994, RTC issued a policy covering civil service employees

determined to be culpable in the losses of failed institutions. The policy

states in part that “Conduct which does not clearly fall into one of

[FIRREA’s] prohibited categories5

 is less clear-cut and requires further

analysis.” The policy also states, “An example that requires careful

consideration is when an RTC employee is named, or about to be named, in

a suit filed by the RTC Professional Liability Section.”

While this policy is critical for managers in making employment decisions,

it does not describe what “further analysis” is required. Thus, the policy

provides neither the direction nor the clear guidance that managers need

when deciding (1) to hire an individual previously found culpable for the

failure of an institution or (2) what personnel action, if any, should be

taken against current employees whom the Corporations have found

culpable.

Similarly, FDIC policy does not provide clear guidance for managers to

make necessary employment decisions regarding culpability

determinations. FDIC standards of ethical conduct, which adhere to those

of the executive branch, state only that FDIC employees cannot be indebted

to a failed institution through any extension of credit.

RTC and FDIC Did

Not Share Findings of

Culpability

Several federal agencies—including RTC and FDIC—coordinate their efforts

to pursue claims, prosecutions, and enforcement actions to maximize

recoveries at the lowest possible cost. Unfortunately, this effort does not

extend to the systematic sharing of information between RTC and FDIC

regarding the directors and officers each had found culpable in the failures

of federally insured institutions. Responsible officials at RTC and FDIC

acknowledged that the Corporations do not customarily share such

information. Therefore, they are aware only of those employees against

whom their own organization has brought action.

5

FIRREA requires RTC to ensure that anyone who directly or indirectly performs services for it meets

minimum standards of competence, experience, integrity, and fitness. These standards prohibit any

person from performing any service for RTC who

• has been convicted of a felony;

• has been removed from or prohibited from participating in the affairs of an insured depository

 institution pursuant to any final enforcement action by any federal banking agency;

• has demonstrated a practice or pattern of defalcation (misappropriation);

• is currently in default on one or more obligations to FDIC, the Federal Savings and Loan Insurance

 Corporation, or RTC; or

• has caused a substantial loss to federal deposit insurance funds.

Page 7 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

RTC/FDIC Employees

Found Culpable

After our request, RTC and FDIC identified 12 individuals, one of whom was

a conservatorship institution employee, whom the Corporations had

previously determined to be culpable and who were holding vital positions

in FDIC, RTC, or conservatorship institutions. We identified two additional

employees occupying vital positions whom the Corporations had found

culpable. These discoveries illustrate the Corporations’ vulnerability.

RTC/FDIC-Identified

Employees Previously

Found Culpable

In response to our request for a list of such employees, RTC’s Office of

Investigations identified three individuals who held vital positions

although they had been determined to be culpable. Those individuals had

been found responsible for losses and had been made subjects of

professional liability suits or criminal referrals to the Department of

Justice since 1989. FDIC’s investigative office identified nine FDIC employees

holding vital positions who had been subjects of FDIC professional liability

suits or criminal referrals during the 5 preceding years. The 12

RTC/FDIC-identified culpable employees held the vital positions of RTC

managing agent, credit specialist, and operations specialist; loan workout

officer at RTC conservatorship institutions; or FDIC credit specialist.

We did not include in our investigation two other persons whom FDIC

identified because they did not have asset disposition responsibilities.

These two, however, held positions of trust, as FDIC employed them as

investigators to ascertain individuals’ liability for institution failures.

GAO-Identified Employees

Previously Found Culpable

Concentrating on employees with asset disposition responsibilities, we

obtained a list of 1,132 Corporation employees from RTC and FDIC. We

compared this list with RTC’s database of subjects of professional liability

suits and RTC’s and FDIC’s databases of subjects of criminal referrals to the

Department of Justice. We found two additional employees deemed

culpable in vital positions—an FDIC credit specialist and an RTC supervisory

operations specialist.

FDIC hired the credit specialist in February 1993, although RTC had

previously filed a criminal referral that named the individual in 1990. While

FDIC was aware that this person had resigned from RTC in May 1992, FDIC’s

hiring and supervisory managers were unaware of the criminal referral

until we asked that they check with RTC. The FDIC employee’s

responsibilities included the analysis of proposed workouts; settlements;

and budgets of large, complex assets, ranging to several millions of dollars.

Page 8 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

RTC hired the supervisory operations specialist in February 1990. In

April 1991, RTC made a criminal referral to the Department of Justice,

naming this individual. RTC overlooked this individual in the list of culpable

employees it provided to us although the criminal referral clearly stated

that he was an RTC employee. This oversight further emphasizes the need

for both an effective, systematic screening process and adequate

databases to support it.

Additional Culpable

Individuals May Hold

Vital Positions

The Corporations’ vulnerability may not be limited to the 14 RTC, FDIC, or

conservatorship employees that we identified during our investigation. For

example, we were limited in our ability to use FDIC’s database of

professional liability suits because the databases could not retrieve

individuals by name. Thus, we were unable to determine whether the

Corporations employed in vital positions any of the individuals whose

names were contained in the database. Additionally, RTC maintained no

database of employees of institutions that were in conservatorship and

could not identify those having previous culpability determinations. Thus,

RTC’s vulnerability to fraud, abuse, or mismanagement is increased.

RTC Assessment Did

Not Identify Its

Vulnerability to

Culpable Individuals

In March 1990, the U.S. Secret Service offered to do a vulnerability

assessment targeting RTC employees and contractors. RTC did not accept

the offer and performed its own assessment, which was published in

November 1990.

The Secret Service proposal included a review of the application process

for new RTC employees and its contractors, as well as a review of RTC

databases and criminal referral processes. The subject of RTC’s

vulnerability assessment included adherence to RTC’s ethical

standards—FIRREA. RTC found that its employment efforts are particularly

vulnerable “in view of the need to rapidly employ staff . . . because RTC

must ensure that prospective employees meet its own and other ethical

requirements.” However, RTC’s ethical standards for its employees do not

specifically address the employment of individuals against whom an

administrative determination of culpability has been made, with the result

that RTC did not identify its vulnerability to such individuals. While we

cannot be certain that a Secret Service assessment would have identified

the lack of RTC controls for determining which employees and applicants

were culpable, as RTC’s focus was on existing ethical standards it did not

identify this lack of controls as a vulnerability.

Page 9 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

FIRREA Is Not

Applied to

Conservatorship

Employees

RTC does not consider conservatorship employees to be either RTC or

contract employees and therefore does not apply the FIRREA employment

standards regarding competence, expertise, and integrity to them. We

believe that conservatorship employees should be subject to the FIRREA

standards because the standards apply to individuals who perform the

functions and activities of RTC.

FIRREA establishes various experience and integrity standards that are

applicable to RTC employees. FIRREA also states that

“Any individual who, pursuant to a contract or any other arrangement, performs functions

or activities of the [RTC], under the direct supervision of an officer or employee of the [RTC],

shall be deemed to be an employee of the [RTC] for the purposes of title 18, United States

Code and [FIRREA].” (12 U.S.C.A. § 1441 a(n)(1)(West Supp. 1993)).

We found that many conservatorship employees perform critical functions

of RTC, such as loan workout. They also report directly to an RTC employee,

such as the managing agent or credit specialist. Nonetheless, RTC

maintains that conservatorship employees are not subject to FIRREA’s

employment restrictions.

Conclusions RTC and FDIC do not have the systematic means to always know when they

are about to employ, or are already employing, someone whom either

Corporation has found to be culpable in the losses that caused the failure

of a federally insured financial institution. Their inability to make informed

decisions concerning the hiring or duties of such individuals increases the

Corporations’ vulnerability to fraud, abuse, or mismanagement.

Further, while RTC will transfer its assets and operations to FDIC when RTC

closes on December 31, 1995, we believe it is important for both

Corporations to address the findings of this report now as they prepare for

the transition period. Despite the dwindling number of institutions

presently in conservatorship, the vulnerability of any failed thrift to

culpable individuals will remain a concern as long as conservatorship is an

available means of resolution.

Addressing the findings of this report will not only help protect the assets

of the institutions under the Corporations’ purview, it will help provide

FDIC with assurance that it is aware of any RTC and

conservatorship/receivership institution employees who have been found

culpable for the losses of failed institutions.

Page 10 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

Recommendations We recommend that the Acting Chairman of FDIC and the Deputy and

Acting Chief Executive Officer of RTC direct their agencies to

• perform employment screening before hiring individuals and routinely do

so for their current employees, using reliable databases of individuals

found responsible for institution failures;

• develop reliable databases that will effectively identify individuals found

culpable in institution failures;

• share information systematically, enabling each to be aware of those

individuals the other has found culpable in the failure of federally insured

institutions; and

• ensure that personnel guidance is clear and appropriate regarding

employees and prospective employees for whom the Corporations have

made culpability determinations.

We also recommend that RTC’s Deputy and Acting Chief Executive Officer

ensure that conservatorship employees who occupy positions with

responsibilities for asset disposition—such as those performing loan

workout functions—be included in the employment screening process.

Agency Comments We sent a draft of this report to FDIC and RTC for comment. In their written

comments dated September 14 and 16, 1994, respectively, FDIC and RTC

agreed with our report and acknowledged that the issues raised are

significant. According to FDIC’s Acting Chief Operating Officer and Deputy

to the Chairman, FDIC will continue to review the draft report’s

conclusions, providing us with the preliminary results of that review, and,

in coordination with RTC, develop steps to correct the weaknesses

identified. RTC’s Chief Financial Officer indicated that RTC will pursue our

recommendations to the fullest extent possible and proposed specific

initiatives to address each recommendation. RTC’s initiatives are

responsive to our findings and recommendations. If fully and effectively

implemented, these initiatives could resolve the issues identified. (See app.

II and III for complete agency comments.)

As agreed with your office, we plan no further distribution of this report

until 30 days after the date of the letter, unless you publicly announce its

contents earlier. At that time, we will send copies to the Secretary of the

Treasury, the Acting Chairman of FDIC, the Deputy and Acting Chief

Executive Officer of RTC, and other interested parties. We will make copies

of this report available to others upon request.

Page 11 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
B-257933 

If you have questions concerning our investigative findings, please contact

Robert Hast, Assistant Director for Investigations, of GAO’s New York

Regional Office at (212) 264-0730. A list of major contributors is included

in appendix IV.

Sincerely yours,

Richard C. Stiener

Director

Page 12 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Page 13 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Contents

Letter 1

Appendix I 

Methodology

16

Appendix II 

Comments From RTC

17

Appendix III 

Comments From

FDIC

20

Appendix IV 

Major Contributors to

This Report

22

Abbreviations

FDIC Federal Deposit Insurance Corporation

FIRREA Federal Institutions Reform, Recovery, and Enforcement Act

GAO General Accounting Office

OSI Office of Special Investigations

RTC Resolution Trust Corporation

Page 14 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Page 15 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Appendix I 

Methodology

We performed our investigation between October 1992 and

December 1993. We reviewed and considered relevant laws, regulations,

and policies and interviewed responsible management officials at RTC and

FDIC headquarters.

From RTC, we requested the names of any RTC employee who had been the

subject of a professional liability suit or criminal referral for responsibility

in a failure of any federally insured institution since the inception of RTC.

We requested the same information from FDIC regarding any FDIC employee

in the past 5 years.

To verify whether the Corporations had provided us the names of all such

individuals, we requested personnel information as well as professional

liability suit and criminal referral information. We matched RTC and FDIC

employees with responsibilities concerning assets of failed institutions

against both organizations’ criminal referral listings and against RTC’s

professional liability suit listing. From RTC, we obtained listings from

databases of (1) federal employees with asset disposition responsibilities6

and (2) individuals against whom RTC had filed professional liability suits

or criminal referral actions for responsibility in the failures of federally

insured institutions. From FDIC, we obtained listings from databases of

(1) employees at FDIC consolidated offices who have responsibilities over

assets of FDIC-controlled failed institutions and (2) individuals against

whom FDIC had in the past 5 years filed professional liability suit7

 or

criminal referral actions for responsibility in the failures of federally

insured institutions.

6

We could not obtain listings of nonfederal conservatorship employees with asset disposition

responsibilities as RTC maintains no database of them.

7

We did not use FDIC’s professional liability suit listing because it could not readily be converted into a

format suitable for this screening purpose.

Page 16 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Appendix II 

Comments From RTC

Page 17 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Appendix II 

Comments From RTC

Page 18 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Appendix II 

Comments From RTC

Page 19 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Appendix III 

Comments From FDIC

Now GAO/OSI-95-1.

Page 20 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Appendix III 

Comments From FDIC

Page 21 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
Appendix IV 

Major Contributors to This Report

Office of Special

Investigations,

Washington, D.C.

Donald Wheeler, Deputy Director for Regional Investigations

M. Jane Hunt, Special Assistant for Investigative Plans and Reports

Barbara W. Alsip, Reports Analyst

New York Regional

Office

Robert H. Hast, Assistant Director for Investigations

Daniel P. Schultz, Project Manager

Me’Shae Brooks-Rolling, Evaluator

Office of the General

Counsel, Washington,

D.C.

James M. Lager, Assistant General Counsel

Glenn G. Wolcott, Assistant General Counsel

(600291) Page 22 GAO/OSI-95-1 RTC/FDIC Vulnerable to Fraud, Waste, & Mismanagement
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