Magazine article American Banker

Housing Finance Board's Offices Searched

Magazine article American Banker

Housing Finance Board's Offices Searched

Article excerpt

A team of federal investigators looking into possible fund-raising improprieties descended on the Federal Housing Finance Board's offices in a surprise inspection Monday morning and took as many as a dozen computers for examination, including one from the office of its chairman, John T. Korsmo.

In addition to Mr. Korsmo's machine, investigators took computers from all the employees attached to the office of the chairman and some from the office of the general counsel. A Finance Board spokesman said the investigators held the machines for several hours while they downloaded information from the hard drives. The computers were returned later in the day.

The investigators, led by representatives of the board's inspector general, were collecting information as part of a probe requested this month by Senate Banking Committee Chairman Paul Sarbanes, D-Md. He asked for reports by both the inspector general and the General Accounting Office after it was revealed that Mr. Korsmo had agreed to appear as a "special guest" at an Oct. 1 political fund-raiser.

Invitations to the $500-a-head event, which benefited Rick Clayburgh, a Republican congressional candidate from North Dakota, were sent to high-level executives at several Federal Home Loan banks, which Mr. Korsmo is in charge of regulating. The invitations prominently featured Mr. Korsmo's name but did not mention his title.

He has said that he was unaware that the invitations would be sent to Home Loan Bank officials and that he regrets not being more cautious about avoiding the appearance of a conflict of interest. …

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