Falling Short At NCUA

Well, hope by now you have read the OIG letter to Congressman Issa concerning those $42 million in "contingent" legal fees paid out by NCUA under "less than clear" circumstances.  

OIG is no NCIS !!

Kinda know you're likely to find some dirt if you dig into a hole filled with both DC and Chicago "politics". Don't take my word on it ask Blagojevich !  Guess the other thing that is painfully clear from the letter is that Mr. DeSarno from OIG is no Jethro Gibbs from NCIS!  As to those OIG "conclusions":  Oversight? Overlooked? Overripe? Overt? (or OMG!... "these are the conclusions upon which our facts were based.") 

John Kay writes for The Financial Times.  He had an interesting opinion piece (2/06/2012) on fiduciary responsibility and the financial industry recently. Here's an excerpt:

"Fiduciary standards describe how people should behave when they manage the affairs of others.  The key elements of the concept are loyalty - put your responsibilities to others ahead of your own interests - and prudence - discharge your responsibilities with care and skill.  Conformity to fiduciary standards also means avoiding conflicts of interest.  If conflicts of interest cannot be avoided, they should be disclosed."

Seemingly pretty standard stuff - right?  But here is John Kay's punchline and the concern you should have over the OIG letter and several of its conclusions:

Tell them to eat it....

"The reputation of finance has been degraded by the actions of a few.  But the few have been running the show, and have imposed inappropriate values on once respected institutions."

..... it would appear that "the few" at NCUA have lost sight of their duty of loyalty, their duty of prudence.  

We'll take a look tomorrow at where NCUA is falling short - well short - of their responsibilities.   And, why your reputation, your respected institution is at stake.

But here's a little "appetizer" about how well OIG does its' homework. From the Issa letter:  

"The [FDIC] attorney we spoke with further declined to confirm or deny that it was FDIC's current policy to avoid contingency fee arrangements."

And, here's what the Wall Street Journal (10/26/2012) said in its article:  

"The Federal Deposit Insurance Corp. generally avoids contingency fee arrangements, an FDIC spokesman said."

SOMEBODY IS FIBBING !!! (Don't think it's the FDIC, do you?)

Hope you get the whiff  drift of a less than thorough, perhaps less than arms length opinion....

... unfortunately this is the mildest stench - stay tuned!