Another Obama Appointee On Leave of Absence

They just keep falling.  I find it hard to believe that Obama does not know about all these people that he picks.  It is almost like he is picking them on purpose because they are just going to keep doing the wrong things.  If he is not doing it on purpose then he has got to be the stupidest man in the world.  With a Yale education we can't very well say he is stupid can we?

Another high-ranking official in the Obama administration has had to leave his position, and in this case, one has to wonder how he got the job in the first place.  Scott Polakoff, the top bank regulator for the Treasury, has taken a leave of absence after internal audits uncovered his allowance of backdated capital infusions, which could amount to cooking the books for IndyMac and other institutions.  But the OTS chief had also been responsible for regulating AIG as well (via The Boss):

The acting director of the Office of Thrift Supervision has been put on leave pending a review of the agency’s role in the backdating of capital infusions by some banks, the agency said Thursday evening.

OTS said in a surprise statement that Scott Polakoff, who has been serving as acting director of the OTS, would be replaced by OTS Chief Counsel John Bowman during the review by the Treasury Department.

The OTS, a division of the Treasury Department, has come under fire after it was revealed last year that the agency had allowed IndyMac Bancorp Inc. (IDMCQ) to backdate a May 2008 $18 million capital infusion to the first quarter. IndyMac failed a few months later, a collapse that cost the Federal Deposit Insurance Corp. $10.7 billion, the costliest failure in U.S. history.

A subsequent review of the issue by the OTS uncovered four other cases of backdating by banks, cases which the agency said in a January letter to U.S. lawmakers “were not acceptable to current OTS standards.” Allowing the banks to backdate capital infusions to earlier quarters could allow firms to avoid regulatory penalties for having too little capital.

Surprise?  Maybe it shouldn’t have been a surprise, considering this point from the Wall Street Journal:

Polakoff also has come under fire for the agency’s inability to prevent the problems at American International Group Inc. (AIG). The OTS was a top regulator for the giant insurance company, which eventually needed a huge government bailout.

We know that the Obama administration hasn’t exactly set speed records for staffing Treasury.  Now they’re going backwards, but one has to wonder why they promoted Polakoff in the first place.  If Polakoff’s last big entry on the resumé involved regulating AIG, why would the Obama administration promote him to the top position among financial regulators?  It’s not as if no one heard about AIG’s collapse.

CNN has more:

But it turns out Mr. Bernanke was not quite accurate when he said “no oversight.” He made that statement on March 3rd.

Just two days later a man hardly anybody has ever heard of explained to yet another Senate committee that — hold the presses — there WAS a regulator for the Financial Products unit of AIG. … That man was Scott Polakoff and he’s the Acting Director of the Office of Thrift Supervision (we call that OTS). OTS is the regulator for thrifts and savings banks. Polakoff has told any committee that will listen that OTS had responsibility for AIG FP. Why was OTS involved? Because among the seventy odd companies and units that make up AIG, one of them happened to be a Savings & Loan Bank. …

“We were clearly responsible as a consolidated regulator for FP,” says Polakoff, and adds, “We, in 2004, should have taken an entirely different approach than what we wound up taking regarding the credit default swaps.” By now, the term credit default swap is practically a barbershop term, but basically it’s just a sort of insurance policy on another financial product like a mortgage-backed security (often stuffed with foreclosed mortgages, as we have all learned to our sorrow).

Anderson Cooper then spends the rest of the blog entry making excuses for Polakoff, but the truth is that Polakoff had the responsibility for oversight at AIG-FP, the division that crashed the company and led to the $150 billion bailout.  Its failure does not make Polakoff a criminal (although the backdating of capital infusions might), but it should have set off some warning bells for anyone looking to promote him.

posted at 10:16 am on March 27, 2009 by Ed Morrissey

Grits4life Grits4life
46-50, F
7 Responses Mar 27, 2009

Sorry grits.<br />
Free pass.<br />
Know how painful that is.

i'm here just having to deal with a lot of personal issues in my marriage and am not able to get on the computer as much.

HELLLOOOO. Grits, are you out there?<br />
Been weeks dude!

Oh, what utter dreck.<br />
At no time did FDR 'turn away' from the Constitution.<br />
In fact, I defy you to find the word "profit" or "Capitalism" or "Free Trade" anywhere in the the Constitution EXCEPT that an impeached and convicted person may not "hold any office of profit...".<br />
So the 'republic' died the moment that Wealth took control of Legislatures in the various states...and that would be circa 1872.<br />
Or perhaps it began with the establishment, in violation of Article 1, Section 8, of a standing army "To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;", which, again, was circa 1860, LONG before FDR!<br />
Then again, I don't think you even recognize the term "guilded age", because your grasp of history is so weak.<br />
I suggest you read up on "Manifest Destiny".

outraged at all. everything really beagn to turn country away from what our founding fathers wanted beginning with Wilson/FDR. It has been a steady process ever sicnce with each new adminastration. It is just that with this current one he no longer wants to take it at the same steady pace. The complete transitions from a republic which was what our founders gave us will no longer be. It is happening so fast now and by the time it is completed it will take another War within our own country to return to what we were given

Really Grits?<br />
Notice you have lots to say about UNPROVEN claims by rightards, but what do you have to say about Raygun / Bush 41, the MOST CORRUPT ADMIN IN HISTORY, with 32 CONVICTED CRIMINALS in the admin?<br />
Hmm?<br />
Selective outrage, yes or no?

no one likes to get caught with their hand in the cookie jar. It's just too bad that it seems "all" had and have their hands in the jar and don't want to take them out.