WASHINGTON - A House banking subcommittee will begin probing today why the Dallas office of the Resolution Trust Corp. hasn't recovered more money from executives of failed Texas thrifts.
Scheduled to testify today before the House Banking Subcommittee on Oversight and Investigations are 12 current and former employees of the professional liability section of the Dallas office.
On Tuesday, Roger Altman, former deputy secretary of the Treasury and interim CEO of the thrift bailout agency, and several RTC and Treasury Department officials will testify.
Subcommittee Chairman Spencer Bachus, R-Ala., said the recovery rate of the Dallas office "is not what it should be, and demands examination."
Mr. Bachus said the agency had recovered $35 million from directors and officers of failed Texas thrifts, only a small fraction of the $26 billion those institutions' failures have cost taxpayers.
An agency spokesman countered that it had also recovered $166 million from law firms, accountants, and other professionals involved in Texas thrift failures, and that the Texas legal environment had made it difficult to recover much more.
"We've covered this territory many times in the past in Congress," said Stephen Katsanos, the agency's director of corporate communications. "In the past they've not focused on the court-friendly environment in states such as Texas."
Along with friendly judges, Mr. Katsanos said Texas thrift executives had the advantage of generous homestead exemption laws that allowed them to shield much of their wealth.
Ten of the agency employees testifying this week will do so under subpoena. Mr. Bachus asked House Banking Committee Chairman Jim Leach to authorize the orders to appear because he said some employees were reluctant to testify for fear of reprisal.
In a memo sent June 9, however, Thomas L. Hindes, the agency's assistant general counsel, told Dallas employees they were free to testify and that their travel to Washington for the hearings would be reimbursed.
"We certainly felt that there was no need for Mr. Bachus to subpoena RTC employees," Mr. Katsanos said.
Since its creation in August 1989, the agency has disposed of $443 billion of assets from 747 failed thrifts.
At the end of this month, the agency will hand over responsibility for new thrift failures to the Savings Association Insurance Fund and at the end of the year all remaining agency functions are due to be taken over by the Federal Deposit Insurance Corp.
