THE BLOG
07/11/2012 09:52 am ET Updated Sep 10, 2012

Federal Bank Examiner Violated Ethics Rules by Playing Golf With Bank Employees, Probe Finds

A federal bank examiner violated ethics rules by golfing with bank employees during work hours and letting them pick up expenses, according to a report by a government watchdog recently released under the Freedom of Information Act.

A series of banking scandals and crises has called into question whether bank regulators are independent enough from the banks they oversee. The report by the U.S. Treasury Department's inspector general offers a glimpse of one such relationship.

The report accuses one national bank examiner of "playing golf during official duty hours," "accepting gratuities" in the form of "golf fees and/or food," and "recording his official time and attendance hours as working while playing golf" with employees of a bank whose name begins "First National Bank of."

The rest of the bank's name is blacked out, along with the names of the examiner and bank employees.

The inspector general released the July 2010 report last month to the website governmentattic.org, which posts records obtained through the Freedom of Information Act.

The Project On Government Oversight found the report in a batch of documents on the site.

The examiner worked for the Office of the Comptroller of the Currency, which has been sharply criticized for its performance as the financial crisis and the mortgage foreclosure crisis developed.

The agency has recently come under scrutiny again in connection with a multi-billion dollar trading blunder at JPMorgan Chase.

The subject of the inspector general's report was described as a "National Bank Examiner" based in Jacksonville, Fla. Examiners are responsible for monitoring banks' financial safety and soundness.

On at least two occasions, the examiner recorded his time spent golfing as "safety and soundness activities or travel," the report says.

The report says the examiner violated federal regulations covering general conduct prejudicial to the government, basic obligation of public service, use of official time, falsification of official records, and conduct while on official duty.

The U.S. Attorney's Office for the Southern District of Georgia declined to charge the examiner criminally "due to lack of prosecutive merit," the report says.

The matter was being referred to the comptroller "for possible administrative action," the report says.

The violations involved at least five golfing occasions, according to the report.

Though the report generally redacts names, the report's case title includes a name. Efforts to reach this person were unsuccessful.

Spokesmen for the comptroller and the inspector general's office did not respond to requests for comment.

The heavily redacted report includes references to a "Country Club tee time sheet from April 15, 2008," an invoice listing "food charges and guest golf fees," the use of a "corporate credit card," and "golf outings... during OCC bank examinations... in 2006-2008."

The fact that names are blacked out makes it hard to tell with certainty whether statements paraphrased in the report were made by bank employees or by the bank examiner in question.

According to the report, one person whose name is redacted "stressed that he was always objective and professional in the performance of his official duties regarding [redacted] and his supervision of [redacted] was never influenced by the golf outings with the [redacted] employees."

"Up until a March 6, 2009, ethics training session, [redacted] believed playing golf with bankers was a condoned activity," the report continues.

On at least one occasion, "[redacted] said he offered, but was not allowed, to reimburse the golf fees because it would create problems in the books of [redacted]," the report says.

Apparently citing the opinion of an Office of the Comptroller of the Currency official who delivered ethics training, the report says an examiner-in-charge "should not play golf with members of the supervised bank at any time because of the potential for a conflict of interest, and it would make no difference if the bank or the examiner paid for the round of golf."

"In addition, [redacted] said playing golf at private clubs of a regulated bank's employee is not permitted because of the value associated with the membership at the club," the report says.

By Michael Smallberg