The Resolution Trust Corp. has decided to impose relatively minor penalties on technology outsourcer Fiserv Inc. after the company admitted to ethical lapses over the disposal of assets of a failed Texas thrift.
In May, the RTC charged that Milwaukee-based Fiserv and a joint venture partner had improperly sold $30,000 worth of office furnishings from the failed CitySavings and Loan Association.
The RTC said Fiserv and its partner in the joint venture, the BancPro Group, Inc., violated the agency's ethics rules when a number of BancPro employees and subcontractors purchased CitySavings' furniture and artwork.
RTC rules stipulate that "a contractor engaged by the RTC to manage, lease. value, or establish a sales price for an asset... cannot enter into any subsequent contract with the RTC... to purchase that asset."
The RTC's chief ethics compliance officer, Arthur J. Kusinski, had proposed that Fiserv be banned from bidding on future RTC contracts for three years, but last month the agency backed down, suspending Fiserv from receiving RTC business for only two months, an exclusion that ended July 1.
Since 1990. Fiserv and Houston-based BancPro have been awarded more than 30 contracts to provide asset management and data processing services for RTC-controlled institutions.
The value of these contracts exceeded $60 million, according to RTC documents.
As part of the settlement, Fiserv also agreed to revamp its compliance procedures, as well as to perform additional training of personnel who work under RTC contracts.
"We came to an understanding [with the RTC] that this was more of a misunderstanding," said George Dalton, Fiserv's chairman and chief executive officer.
"I can't speak for the RTC, but I believe they felt the [reduced] penalties were enough after what they had found."
Mr. Dalton said Fiserv admitted that its joint venture had broken RTC rules, but that his company was not informed that BancPro employees had purchased the CitySavings furniture and art work.
"We weren't aware of what they were doing, and the RTC felt we needed to be more attentive," he said.
He also explained that Fiserv had formed the joint venture with BancPro in order to qualify for a RTC contracting program that gives preference to businesses owned by minorities and women.
Ann Caraway Ivins owns BancPro, and her husband, Leonard Ivins, is president of Fiserv Joint Venture, the umbrella company.
"We formed the joint venture [with BancPro] because there's no doubt minority status helps in the bidding process" for RTC contracts, Mr. Dalton said.
Mr. and Mrs. Ivins were among the people cited by the RTC for improperly purchasing CitySavings furniture.
The settlement and two-month suspension covers Fiserv only and not BancPro, the RTC said. That implies that BancPro could still receive stiffer penalties.
While a RTC spokeswoman said Fiserv has been one of the agency's biggest contractors, Mr. Dalton said the revenue over the past four years from the agency made up "a very small part of our business."
According to RTC data, Fiserv and BancPro currently hold three contracts due to expire of over the next 12 months, with a combined value of about $11 million.
Fiserv's total 1994 revenues will exceed $550 million, Mr. Dalton said.
Mr. Dalton said he wasn't sure whether Fiserv would bid for RTC business in the future, noting that thrift failures have abated since the S&L debacle of the late 1980s.
Mr. Dalton said, "There isn't a lot of business coming from the RTC these days," but he quickly added that his company was willing to make the necessary changes to its compliance procedures anyway.
"We wanted to make it clear to our financial institution clients that we are committed to being an ethical organization. It certainly was not intentional that we broke RTC rules," he explained.
