RTC's Cooke: I'm Not Being Forced Out
WASHINGTON - As manager of the savings and loan bailout, David C. Cooke does not have many good days.
But June 21 was his worst since he became executive director of the Resolution Trust Corp. nearly two years ago. Mr. Cooke opened The New York Times to find a startling headline on the front page of the business section: "Manager of Savings Bailout to Be Ousted."
Read It and Weep
As he read on to the inside page where the article continued, the headline there was even harder to fathom: "Seidman Agrees to Ouster of Manager of Savings Bailout."
"I was shocked," Mr. Cooke said in an interview last week.
The 45-year-old father of four had to ask himself whether his boss and mentor, William Seidman, the man for whom he had worked so hard and long, could have drowned him in the river of compromise.
The Times said Mr. Seidman, chairman of both the RTC and Federal Deposit Insurance Corp., agreed to dump Mr. Cooke in a deal with the Treasury to restructure the thrift-bailout agency.
Some Restructuring Due
In fact, the administration does want to make some changes in the way the RTC is structured, but plans do not call for Mr. Cooke to leave the agency. Mr. Seidman and Treasury Secretary Nicholas Brady both want to recruit a high-profile, accomplished executive officer of the RTC. This post would incorporate Mr. Seidman's RTC duties and some of Mr. Cooke's.
But administration officials say they are not giving Mr. Cooke the shove, and many have written him to that effect since the Times story appeared.
While Mr. Seidman and Mr. Brady have taken heat from Congress on the rising cost of the S&L bailout, they both agree that David Cooke is not the problem.
Getting the Good Word
That was reconfirmed when Mr. Cooke, after reading the Times article, walked down the street to Mr. Seidman's office at the FDIC. Once there, he heard good news from the RTC chief.
"He said this just isn't true at all and I believe him, and since then 50 other people said it wasn't true," Mr. Cooke said.
Steve Labaton of The Times said Friday that his article "was not inaccurate."
Mr. Cooke said he has no plans to leave the RTC - not even when Mr. Seidman's term ends this fall. This is not to say that Mr. Cooke does not expect to see someone else appointed as chief executive officer.
But Mr. Cooke sees the new CEO as more Mr. Seidman's replacement than his own. The agency needs an established CEO, he said, to deal with with lawmakers, administration officials, and the public.
Two of the names bandied about for the job have been former Chrysler Corp. executive Gerald Greenwald; and David Maxwell, the former chairman of the Federal National Mortgage Association.
"Right now we have the ultimate in Bill Seidman," Mr. Cooke said. When Mr. Seidman is gone, the RTC will need a new protector. But the thrift bailout agency will still need someone to manage it day by day. And under the right circumstances, Mr. Cooke would stay on in that role.
Keeping the Machinery Oiled
"I don't rule out anything," he said. "Me, or someone like me, is necessary just to keep the thing going."
But he really hasn't given any of this much thought yet.
"Honestly, I don't know what I want to do," he said. "I know I should sit down and think about this, but it seems like I come in in the morning and the next thing I know it's nighttime."
He admits to contemplating quitting. So why might he stay?
"We have the core structure in place," he said. "We've got the core and now we're refining."
He developed with Mr. Seidman the idea for a strong chief executive to run the RTC "because we can't seem to convince anyone else that things are going well.
"I'm not saying we're perfect, but I think we're better than is recognized."
Mr. Cooke said he never envisioned himself as CEO; he believes he's not savvy enough.
He is uncomfortable in the spotlight but has learned to live in it - not without a lot of angst. For example, he ran 7.5 miles at dawn before taping "This Week with David Brinkley" recently because "I was so uptight."
He said he has a generally trusting - perhaps too trusting - attitude toward life in general.
Believer in Directness
His philosophy: "If you try the best you can and you try to be as up-front as you can, things will work out." He acknowledged this "sounds naive," adding, "When I'm out [living] on a grate next summer, I might want to change that."
He said he has no idea "why anyone would want to take" the RTC job. "It's certainly a tough assignment."
What makes it so hard? "No one really wants to focus on the accomplishments," Mr. Cooke said. "Who wants to see a plane land? They want to see it crash."
Pointing to Record
The RTC, Mr. Cooke boasted, has sold 27% of its real estate, 75% of its securities, and 56% of its one- to four-family mortgages.
"We all are very proud of what we've accomplished. We may be the only people in the country who are."
That says it all: No one wants to congratulate you and everyone wants to dump on you.
Take the agency's recent audit by the General Accounting Office. Mr. Cooke said people focused on the problems the GAO identified - the office complained about auditing problems - but ignored its praises.
"Is it any surprise to anyone that reconciling books is a problem" when RTC is trying to track one million assets being serviced by 3,000 companies?" Mr. Cooke asked.
"And no one says by how much our books are out of balance. The aggregate differences are small, around 2% or less and the differences get smaller every day."
The GAO also complained that 75% of RTC's assets are readily marketable and criticized the bailout agency for holding on to assets that could be liquidated.
Mr. Cooke said just one-third of the RTC's assets can be sold quickly and that 70% of those assets are struck in thrifts that are still in conservatorship. Most of those assets will be sold when the institution is sold, he explained.
To date, the RTC has paid off 14 million depositors at 424 failed thrifts. It has sold or collected $160 billion. Those numbers are impressive no matter what kind of foul-ups are occuring - regional officials spending $26,000 on office art or defaulting on $200,000-plus mortgages.
Through it all, Mr. Cooke has not lost his wry sense of humor.
Asked how The New York Times got that story about his ouster, Mr. Cooke said, "I can assure you it didn't come from me. I haven't talked" to the reporter. "I'm afraid to. I'm afraid I'll end up in the obits."