Whitewater Hearings August 1, 1994 - Part 1
Whitewater Hearings August 1, 1994 - Part 1
(10:45:43) The RTC is also cooperating fully with Special Counsel Fiske, the House Banking Committee, the Treasury Office of Inspector General, the RTC Office of Inspector General, the General Accounting Office, and the Office of Government Ethics in their investigation of various aspects of this matter. During my deposition before Counsel for this Committee and before Special Counsel Fiske, I have been asked a number of questions which generally fell into the following categories: No. I. how I came to be selected for this job; No 2 my authority as Deputy CEO, which was my position when most of the events that are the subject of this hearing occurred; No. 3, my relationship with Mr. Altman and the Administration; No. 4 my knowledge of and/or participation in the White House Treasury contacts; No. 5 , whether I was ever instructed or pressured by the TreasurY or the White House to influence the investigation or the outcome Of the investigation into Madison Guaranty Savings & Loan; and 4 No. 6, whether I have done anything to impede or change the results of the RTC's investigation. For example, did I tell the RTC Staff that I preferred a finding that Whitewater did not cause a loss to Madison? I will cover for the record, briefly, my summary of the answers to these questions. First of all, concerning how I was selected for this job, I can only report what I know. I received a hone call in December 1993, while I was in Atlanta with the OTS, from Frank Newman, Under Secretary of the Treasury, whom I had known professionally when he was with Bank of America and I was at the Federal Reserve. Mr. Newman's call came not long after the nomination of Mr. Stanley Tate, as CEO, had been withdrawn, and he asked if I would consider a temporary assignment at the RTC, I traveled to Washington for two interviews, one with Mr. Altman and one with Secretary Bentsen. Those interviews were the first time I had met either of those gentlemen, either Mr. Altman or Secretary Bentsen. I don't believe the subject of Madison Guaranty came up during the course of those interviews, as most of the discussions dealt with morale problems at the RTC and what could be done about them. At those interviews, I agreed to serve as Deputy CEO of the RTC. The position of Deputy CEO is a statutory one enacted in the RTC Completion Act. There was no Deputy CEO before me and, as a result, the existing RTC organizational structure and delegations of authority did not provide for a Deputy CEO when I arrived. In fact, some of the senior officials of the corporation, by law, were required to report directly to the CEO, The lack of clear authority in the RTC's corporate structure, together with the temporary the fact that the Deputy CEO, created a very challenging nature of my appointment Secretary of the Treasury remained environment in which to assume operating responsibility. Obviously, much of my time in the early days was spent trying to gain an understanding and some control over an organization that is surprisingly decentralized with functional units operating independently of each other. The precise decisionmaking responsibility is not only difficult to explain under such circumstances, but my observation is that it is often not clear to those working at the RTC as well. During my tenure as Deputy CEO, I reported directly to Mr. Altman, who was the Interim CEO. It should be noted that Mr. Altman essentially withdrew from active RTC management following the February 24, 1994, Senate Banking Committee's RTC Semiannual Oversight Board bearing, some 7 weeks after my arrival. During the period preceding the hearing, regular meetings were scheduled to discuss RTC matters. But due to Mr. Altman's busy schedule, many of these meetings never took place.