San Francisco Fed: GAO Found No Evidence of Falsified Reports

The General Accounting Office is investigating whether managers at the Los Angeles branch of the Federal Reserve Bank of San Francisco ordered the falsification of cash reports, Rep. Henry Gonzalez said Monday.

But in a prepared statement, the San Francisco Fed asserted: "The GAO has assured us that it found no indication that branch management deliberately falsified our reports."

The Texas Democrat charged in June that the Los Angeles branch filed erroneous reports with the Fed's board of governors during the last three months of 1995.

Rep. Gonzalez - the House Banking Committee's ranking Democrat - said GAO officials investigating the branch have confirmed that incorrect reports were sent to Washington. A GAO spokesman would not comment on Rep. Gonzalez' statements.

Rep. Gonzalez urged the GAO to intensify its review. "It's vital to know who is responsible for the fabrication, and why it was carried out," he said.

An investigation by Rep. Gonzalez' staff uncovered more than $178 million in accounting errors at the L.A. branch during the fourth quarter. The inquiry unveiled a variety of mistakes at the branch, which operates one of the government's largest vaults.