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| Even NCUA's Watchdog - the "OIG" appears to stinketh! |
IT OCCURRED TO ME THAT MANY OF YOU DIDN'T KNOW THE "HISTORY" ON HOW NCUA ENDED UP PAYING OVER $1 BILLION IN EXCESSIVE LEGAL FEES.
JUST FOR THE RECORD "THE SKUNK" WAS FIRST "CALLED OUT" IN 2013 WHEN THE LEGAL BILL
WAS "ONLY" $42 MILLION:....
WAS "ONLY" $42 MILLION:....
(READ IT AND WEEP!)
[from February, 2013]
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| O My, O Gee, OIG What a long nose you have! |
Ever tried to type with clenched fists ? Can really bring a whole new meaning to the phrase "growing frustration". Try it sometime! If you need a little motivation to get "fired up", just read the latest, hot-off-the-press novella from the NCUA Office of The Inspector General (OIG).
OIG's February 16, 2013 letter to Congressman Darrell E. Issa, Chair of the House Oversight and Government Reform Committee, is yet another cause for embarrassment for anyone and everyone - that's you and me - involved with credit unions.
The letter from OIG is in response to a request from the Congressman for an "explanation" from NCUA, concerning a damning front page article in the Wall Street Journal ("Nice Payday for 'Toxic' Work" - Oct. 26, 2012) describing how NCUA had paid over $42 million in "contingent" legal fees to two Chicago law firms.
"Pass the Cash" was played by NCUA despite an express Executive Order ( #13433 issued May, 2007 by President Bush and affirmed by President Obama - one of the few things both parties have agreed on in quite awhile !) barring such arrangements as detrimental to the best interests of the American taxpayer.
But, let's stop and let you actually read the letter, before we discuss the content any further. Really you need to read it; it's important to the future integrity of the credit union movement. And, it won't take you too long; in fact here's almost a complete copy of pages 3 and 4:
"XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXX XXXXXXXXXX
XXXXXXXXXXX XXXXXXXXXXXXX
XXXXXXXXXXXXXXXX XXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXX ""
(Guess you get the picture...)
With NCUA's track record, you always suspect everything to have....
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| .... a whiff of black eye and white wash. In 2016, isn't it time for the current NCUA Board to "ACT"? ... to demand and expect accountability, competence, and transparency at all Agency levels. |
Lead us to a better place, please!
12 comments:
Jim -- Heads up. When I clicked on the link, I got a full version of the letter without any redaction at all. Don't know what has changed (or when) but wanted you to know.
From Page 3: "As you are aware from previous disclosures made by NCUA officials regarding the contingency fee arrangement, the Conservator paid the firms approximately $41.1 million from the first two settlement recoveries of $165.5 million."
That's a 25% contingency arrangement using my math. Page three also notes the $16 billion loss under investigation ... using the contingency math, that a $4 billion "whale" swimming out there waiting to be caught.
From Page 4: "While an initial comparison of the two amounts, $41.1 million (contingency fees) versus $14.9 million (billable hours), suggests that the Conservator might have paid higher attorney fees than was necessary, we believe closer analysis shows there are other significant factors to consider in arriving at our conclusion that the $41.1 million in fees the Conservator paid the firms from the settlement recovery was reasonable.
Wait. What? Reasonable? That's not my definition of the term reasonable.
From Page 5: "Finally, as discussed in fn. 10, infra, no taxpayer funds were at stake in the agency’s litigation."
Huh? Aren't all funds associated with this taxpayer funds? This line of logic is what is wrong with Washington.
NCYA paid 23% and got $4B...attorneys who are friend of Fenner got $1B.
FHFA paid 2% and got BILLIONS more.
Against executive order.
Rogue.
Tells congress with rbc, contingency lawsuits, charter change regulations, low income designation to take a hike that we NCYA knows best.
Again, and we put up with this?
Stop paying trade association dues and leave the charter for a real regulator.
When it's someone else money $41 million and now $1B is reasonable..
You winers are lucky you got what you did. Your losses are the result of your own industry people taking advantage of you and screwing you every chance they got. As proof how the good old boys stick together through think and thin and even in death, when one of the thieves recently passed, one of your own jumped out to say how wrong he was treated and what a great job he did at the corporate. You never want to admit that anything could be wrong in your industry, how you are all about the members and you put them first. Come on, get real. Half your CEO's would have been bounced a long time ago in any other profession but they learned quick how to survive. Take care of the "volunteer" board with medical benefits, lucrative travel budgets allowing them to take trips to places others can only dream about, dinners after board meetings with open bars and Christmas parties that even makes Santa blink. You have an industry full of pompous takers and complainers and nothing is ever good enough for them. They always want more and they cringe when anyone criticizes them. Talk about needing to drain the swamp.
Wow! That last comment was pretty wicked! While there is plenty of blame to share around the CU world on the Corporates, let's not overlook that the $4 billion in payments FROM THE BANKS is yet another admission (Wells Fargo just being another!) that the bankers committed fraud against the corporates and the American people.
Credit unions were certainly naive... BUT THE BANKERS ADMIT THEY WERE GANGSTERS of the first order... and too privileged and powerful to be jailed.
Folks wanting to convert CUs into banks are, as Mr. Trump would say, asking CUs to join THE LOSERS in these court cases!
and the fact remains, CUNA leadership served on the boards of the corporates and they all turned a blind eye to all the mismanagement, and dare I say it, fraud. The corporates' boards enjoyed their 5-star hotels and resorts, golfing at Pebble Beach, and lavish dinners, and in turn, allowed Bob Siravo and Francis Lee to chase returns without question or oversight. Then you add in the NCUA staff (Kent Buckham in particular) as well as the NCUA Board, and you had a perfect storm of stupidity.
But we also need a "clean" regulator which is accountable, competent, and transparent.
The stench arising out of this highly suspicious $1 billion "pass the cash" contingency fee, the bizarre and shameful testimony of the past Chair before Congress, the humiliating display of staff incompetence on the RBC rule... all confirm that the current NCUA Board needs to "ACT"! To try and restore credibility within the Agency...
Regardless of the election outcome, neither Elizabeth Warren nor Jeb Hensarling will condone the continuation of an unaccountable, incompetent, and untransparent federal financial agency... FDIC, SEC, CFPB, NCUA!
NCUA can be the new standard for excellence, but the NCUA Board needs to step up with fundamental reform... starting at the top in terms of accountability, competence, and transparency.
We've got the right Board to make it happen... if they themselves will simply be accountable, competent and transparent... and expect the same from the NCUA staff... and - BTW - credit union leaders also.
The old NCUA board and staff 'negotiated' and signed the contingency deal. We're not getting any money back until 2021 based on the law that NCUA got passed during the crisis. Fryzel and Matz are culpable.
Here is the bottomline. Hiring Kellogg Huber of DC was a gift from Matz to her and her husband's lawyer friends in their home of Washington.
Hiring Korein Tillery of Chicago was a gift from Fryzel to his legal cronies in his hometown of Chicago.
What in heaven's sakes is going on with all these disgruntled bankers?! They are everywhere. On my Facebook statutes, my Linked In, and now retired and peaceful Jim Blaine's blog. They're getting downright vicious too. Anonymously, of course, like all the real tough guys throw stones and air grievances.
I'm only 8 years new to the CU industry. Does their beef extend beyond the belabored tax exempt grievance or has that always been the extent of it?
Really Jim? What have you been smoking? Or did you eat a piece of tainted Halloween candy? New standard of excellence? We got the right board? Metsger has been there three plus years. McWaters two plus years. And all you got is rhetoric. Start with the budget. Accountable? Transparent? Competent? They are the two easiest of all board members to pull the wool over their eyes. And don't expect any changes from your league people or CEO's. You have been around too long Jim to know that regardless of what you or anyone says, nothing will change.
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