Treasury Official Who Let AIG Cook Books Is Allowed to Retire
March 10th, 2009Via: ABC News:
The man at the center of a fraud scandal at the Treasury Department has been allowed to quietly quit and retire from his job as a government regulator, despite allegations that he allowed a bank to falsify financial records and amidst outcries from investigators who say the case shows how cozy government regulators have become with the banks and savings and loans they are supposed to be checking on.
Darrel Dochow, the West Coast regional director at the Office of Thrift Supervision who investigators say allowed IndyMac to backdate its deposits to hide its ill health, quit last Friday. Prior to his leaving, Dochow was removed from his position but remained on the government payroll while the Inspector General’s Office investigates the allegations against him.
Treasury Department Inspector General Eric Thorson announced in November his office would probe how Dochow allowed the IndyMac bank to essentially cook its books, making it appear in government filings that the bank had more deposits than it really did. But Thorson’s aides now say IndyMac wasn’t the only institution to get such cozy assistance from the official who should have been the cop on the beat.
Investigators say Dochow, who reportedly earned $230,000 a year, allowed IndyMac to register an $18 million capital injection it received in May in a report describing the bank’s financial condition in the end of March.
“They [IndyMac] were able to maintain their well-capitalized threshold and continue to use broker deposits to make loans,” said Marla Freedman, an assistant Inspector General at Treasury. “Basically, while the institution was having financial difficulty, it kept the public from knowing earlier than it otherwise should have or would have.”
In at least one instance, investigators say, banking regulators actually approached the bank with the suggestion of falsifying deposit dates to satisfy banking rules – even if it disguised the bank’s health to the public.
Since November, I am sure, Mr. Dochow has been grilled, his paperwork and files confiscated, etc. etc. Transactions in the federal government by the internal control system are not USUALLY accomplished by, or can be attributed to a single individual.
At the $230 payscale, Dochow was most likely in the Senior Executive Service (SES) and was most likely therefore directing a cadre of people below him. Decisions like the one he made for IndyMac require lots of people beneath him to IMPLEMENT the decision Dochow supposedly made to cook the Indymac books. For example, Dochow would have to direct his staff to do certain accounting maneuvers to fulfill annual audit requirements.It’s not like a person a Dochow’s level actually does the review of accounting ledgers etc. Therefore, it sounds to me like Dochow directed his STAFF to cook the books, and therefore, hmm. Houston we have a problem.
Point is: You CANNOT COOK THE GOVERNMENT”S BOOKS WITHOUT LOTS OF ACCOMPLICES.
ABC’s portrayal of Dochow being allowed to “quietly retire” sounds pretty off the mark to me. Sounds more like, okay dude, you and all the people who have worked for you have been caught. Get out of here (after sufficient debriefings and review of his decisions and staff actions). Go home Write your last will and testament, and lawyer up dude. Be prepared to be THE POSTER BOY for the results of the investigations coming your way.
ABC News, I’ve got a hint for you. No one retires quietly from the US government with a crime on their watch.
Except maybe Dick Cheney or George Bush I, II and Colin Powell, and oh, Condaleeza Rice, and oh well. You know where thats going so I’ll STOP.
Wow, great info Eileen. Thanks.