Sunday, April 12, 2009
OTS at Work
"The acting director of the Office of Thrift Supervision was put on leave while the Treasury Department investigates the agency's role in the allegedly improper backdating of capital infusions, the agency said Thursday evening. ... The agency said [Scott] Polakoff's leave is tied to 'the OTS's August 2008 actions related to post-period capital contributions.' ... A Treasury spokesman said the inspector general has made findings 'regarding certain actions taken by management' at the OTS but wouldn't elaborate or say which company was involved. ... Mr. Polakoff had been acting director since John Reich stepped down as head of the agency last month, and before that was deputy director of the OTS. ... Backdating capital infusions can make a company appear healthier than it really is, misleading investors and avoiding regulatory restrictions. ... The OTS hasn't disclosed the role that officials at its Washington headquarters played in anty decisions by field examiners to allow the backdating", Damian Paletta and Michael Crittenden at the WSJ, 27 March 2009.
What problem? Even if Polakoff allowed the backdating, which I believe a felony under 18 USC 1006, I see no problem. Polakoff anticipated the latest policy directive of Barney Frank, our newest accounting "maven"! I say Polakoff for Treasury Secretary! Oops. He has to spend at least a year at Goldman Sachs first.