WASHINGTON -- In a frantic effort to clean up failed thrifts in the West, the Resolution Trust Corp. was overcharged as much as $4 million as accountants billed the government for 16-hour days and for flying families in for weekend visits, a Senate committee was told yesterday.
Most of the bills were submitted by Financial Management Task Force, a small Denver concern that was hired without competitive bidding for the $20 million special emergency accounting project, witnesses told the Governmental Affairs Committee.
The RTC's Denver office divided the contract into 92 "task orders" to bypass competitive bidding rules requiring big contracts to be approved by the agency's board of directors.
"We cannot tolerate this kind of waste and neglect of policy," said Sen. Joseph Lieberman, D-Conn., a member of the committee.
The disclosures at yesterday's hearing were the latest of several embarrassments about the operations of the RTC, the agency responsible for disposing of the assets of hundreds of failed savings and loans.
Last week, the General Accounting Office said the RTC might have significantly overstated the amount of money it would recover for taxpayers from selling real estate assets. The GAO also said the RTC's record-keeping systems were in serious disarray.
The GAO will go before the Senate Banking Committee tomorrow to provide more details of the confusion and errors plaguing the RTC's costly computerized system for tracking its vast real estate inventory.
The hearing yesterday focused on problems surrounding "Operation Western Storm," in which the RTC tried last year to reconcile a $7 billion difference between the records of individual failed S&Ls in the Western region and the agency's central corporate ledger.
The discrepancy did not result from assets being lost or from any wrongdoing, William Roelle, the RTC's senior vice president and chief financial officer, told the committee.