WASHINGTON — Fifty-one laid-off employees of IndyMac Federal Bank are asking California's attorney general to investigate claims that Sen. Charles Schumer caused the thrift's failure.
The employees of the retail lending and other divisions alleged in a recent letter that the New York Democrat's public warnings about the thrift — which regulators say helped cause a $1 billion-plus run there — violated state law.
"His deliberate publication of what should have been a confidential letter to bank regulators was the direct cause of the failure of IndyMac Bank," they wrote in the letter sent Aug. 11 to Attorney General Jerry Brown.
Sen. Schumer sent letters in late June, which he released to the public, calling for more scrutiny of the thrift and warning of the consequences of a potential collapse.
"There are clear indications that IndyMac … could face a failure if prescriptive measures are not taken quickly," he wrote June 26.
When the $32 billion-asset thrift failed on July 11, the Office of Thrift Supervision blamed Sen. Schumer, D-N.Y., saying IndyMac had lost $1.3 billion of deposits in the 11 days after the release of his letter.
A spokeswoman for Mr. Brown said his office was "reviewing" the employees' request for an investigation. In their letter, they alleged that Sen. Schumer's warnings broke a state law that bars willful communications that are "untrue" and "derogatory to the financial condition" of a bank.
Those who wrote the letter were laid off in a downsizing of the thrift on July 7.
In an e-mailed statement, a spokesman for Sen. Schumer said the law targets negative statements that are false, which was not the case with the senator's letter.
"All the information in Senator Schumer's letter was true and publicly available," he said. "While we certainly empathize with the plight of the employees, their ire is better directed at the management of IndyMac, who failed their customers, their employees, and the public at large.
Promotion of the employees' letter appears to have political motivation. According to sources, CRC Public Relations, an Alexandria, Va., firm whose clients include the Republican National Committee and the National Republican Congressional Committee, was involved in its distribution.