Comptroller of the Currency John D. Hawke Jr. on Wednesday defended his agency's supervision of failed First National Bank of Keystone, W.Va., calling his examiners' efforts heroic in light of the abuse and intimidation they allegedly faced from bank officials.

"Our examiners did a thorough and very highly professional job in Keystone under extraordinarily difficult circumstances," he said in a speech to financial services executives. "They were subjected to vilification by bank officers, to really unprecedented obstruction, to attempts at intimidation, to surveillance by video cameras. ... They were shadowed by armed guards that were hired by the bank, and even their trash was searched."

Mr. Hawke called his examiners' mistakes "inconsequential."

The comments came one day after House Banking Committee Chairman Jim Leach, R-Iowa, accused the Office of the Comptroller of the Currency of "costly inadequacies at the field supervisory level" and of stymieing efforts by the Federal Deposit Insurance Corp. to intervene earlier and more forcefully in First National's supervision. The $1.1 billion-asset bank was closed Sept. 1 amid charges that nearly half its assets had disappeared. The FDIC has since estimated the failure will cost the Bank Insurance Fund as much as $850 million.

Rep. Leach is pushing legislation that would give the FDIC chairman the power to unilaterally order an exam of any bank or thrift. Currently, a majority of the five-member FDIC board -- which includes the comptroller and the director of the Office of Thrift Supervision -- must vote to approve the exercise of so-called backup exam authority.

Mr. Hawke called Rep. Leach's claim of turf battles between the OCC and FDIC "baloney" and said the bill was unnecessary.

"Our relationships with the FDIC were exceedingly good," he said. "There were one or two instances -- but no more than that -- when the cooperation could have been somewhat better on our part ... I've taken steps to assure in the future that we have the right kind of relationship with the FDIC."

Mr. Hawke also denied that the FDIC could have discovered the alleged fraud sooner. "I think those who were not on the firing line, taking the kind of abuse our examiners took, should temper their comments here with a little bit more humility," he said.

In the case of First National, the wheels of justice have begun to grind more quickly in recent weeks.

Plaintiffs' attorneys have filed at least three lawsuits on behalf of bank depositors and shareholders. Last week a federal grand jury indicted two former officers of the bank on charges they obstructed an exam by the OCC and the FDIC. A trial date will be set Monday for accountant Michael H. Graham and senior executive vice president Terry L. Church, who also headed First National's mortgage subsidiary.

Government prosecutors had a relatively easy time persuading grand jurors to indict, thanks to evidence uncovered -- literally -- by the Federal Bureau of Investigation. Acting on a tip, FBI agents went to Ms. Church's hilltop ranch and discovered a 100-foot-long, grass-covered trench filled with missing bank documents. Ironically, a backhoe and a bulldozer were among the items Ms. Church pledged to meet her $2.5 million bail. Her friend former First National president Billie J. Cherry helped by putting up nearly $400,000 of her own property.

Each of the accused faces up to 15 years in prison and $750,000 in fines if convicted. Ms. Church, who is out on bail, is confined to her ranch and must wear an electronic surveillance device.

More charges -- and defendants -- may be on the way. The three-count indictment against Ms. Church and Mr. Graham does not get at the underlying fraud that OCC and FDIC examiners accused bank officials of committing. Both agencies say nearly half of First National's assets were fabricated.

"The fact that some charges are brought now doesn't mean everything's over," said Michael Callaghan, chief of the criminal division at the U.S. Attorney's Office in Charleston, W.Va.

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