Republican Regulator Encouraged IndyMac to Lie

[mr1956]

PBS NewsHour: Report Unearths Regulatory Failures in IndyMac Case

JEFFREY BROWN: As the subprime meltdown cascaded this summer, the government had to step in and seize control of IndyMac, a California bank. But a new investigation finds that, two months before the FDIC stepped in, a different government regulator may have allowed IndyMac to alter its records to appear to be in better financial health than it really was.

For more, we turn to Karen Shaw Petrou, managing partner of the consulting firm Federal Financial Analytics. She advises financial service executives on political and regulatory risk.

And Binyamin Appelbaum, banking reporter for the Washington Post.

Well, Binyamin, first, who was this regulator? And what is he alleged to have done?

BINYAMIN APPELBAUM, Washington Post: His name is Darrell Dochow. And he was the senior official for the Office of Thrift Supervision in the western United States.


...

JEFFREY BROWN: Another glaring thing here is that this particular regulator had been involved in a similar case during the savings and loan scandal with Charles Keating, right?

BINYAMIN APPELBAUM: This was really fascinating.

KAREN SHAW PETROU: That's right.

JEFFREY BROWN: Binyamin, tell us about this.

BINYAMIN APPELBAUM: Yes, Darrell Dochow was a senior federal banking regulator in the late 1980s during the savings and loan scandal. And Congress found -- a congressional investigation found that he delayed regulation of Charles Keating's savings and loan, Lincoln Savings and Loan. He prevented regulators from moving in quickly, from taking proper action, from recognizing its problems.

That, too, had the effect of making that failure more expensive, so it's like watching history repeat itself to a considerable respect.


TRANSCRIPT: http://www.pbs.org/newshour/bb/business/july-dec08/indymac_12-23.html


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Darrell Dochow, remember that name and bring it up every time some Rush Limbaugh ditto head tries to blame the financial crises on the Democratic party.