4 Banking Panel Members Say Carmen Is Unsuitable for FADA Chief Executive

Four members of a key House banking committee, including Chairman Fernand J. St Germain (D-R.I.), raised strong objections Tuesday to the choice of conservative activist Gerald P. Carmen as chief executive of a quasi-government agency that liquidates troubled real estate for the nation’s savings and loan industry.

The congressmen, all Democratic members of the House Committee on Banking, Finance and Urban Affairs, signed a letter indicating that they see Carmen as a partisan political figure who is not capable of handling the job as head of the Federal Asset Disposition Assn.

“It is not a job which should be turned over to non-professional patronage employees,” the congressmen said.

The statement also questioned Carmen’s ties in past jobs, including his association with Donald Ellison, who used to be administrator for the Boston office of the General Services Administration. Carmen headed the GSA, which manages the property and records of the federal government, from 1981 to 1984.

Letter Clinches Decision

After only four months in the job, Ellison was forced to resign and was eventually sentenced to two years in prison after being indicted on charges of embezzlement and bank fraud, the congressmen said.

The letter--sent to M. Danny Wall, the nation’s chief federal savings and loan regulator--appeared to boomerang, however. Carmen said he had not decided whether to accept the job until the letter arrived. He had been offered the post by FADA’s board of directors.

“Having just read the letter, I’ve decided to take the job,” he said in a telephone interview from his Washington office. “The letter is just a rehash. It’s politically motivated and driven.”

After heading the GSA, Carmen served as U.S. representative to the United Nations in Geneva. He now runs a public relations and management consulting firm in Washington and serves as national chairman of a conservative lobbying group known as Citizens for America.

Controversial Agency

Wall, chairman of the Federal Home Loan Bank Board, said the letter from the congressmen “appears to be” just political carping, adding, “I’m sure there are answers” to the questions raised. Wall said he would answer the congressmen in a matter of days.

FADA, part of the Federal Home Loan Bank Board system, has been embroiled in controversy almost since its formation in late 1985.

The agency was organized to maximize the value of billions of dollars worth of loans and real estate from failed thrifts taken over by the Federal Savings and Loan Insurance Corp. The money from the liquidations would then go to FSLIC, which insures customers’ deposits at 3,200 savings and loan firms across the country.

But FADA, plagued by turf battles and inefficiency, soon evolved into a favorite target for politicians and bureaucrats.

Part of the problem was the $250,000 annual salary given Roslyn B. Payne, who was the agency’s first chief executive. Payne is an experienced real estate trouble-shooter but proved a novice in the ways of Washington politics.

Wall moved her aside as chief executive last fall after she angered key congressmen, including St Germain, who said FADA was a “runaway agency” that had “become a fat cat in record time.”

Carmen, who will receive a salary of $150,000 a year, was chosen primarily because of his political skills, according to one official at FADA who asked not to be identified. “Somebody at FADA has to be able to deal with Capitol Hill,” he said.

In addition to St Germain, the three-page letter was signed by Rep. Paul E. Kanjorski of Pennsylvania, Elizabeth J. Patterson of South Carolina and Stephen L. Neal of North Carolina. The committee has 32 Democrats and 20 Republicans.

A Republican committee member, Stan Parris of Virginia, said Carmen was an excellent administrator of the GSA, an agency that dwarfs FADA in size. “Not perfect,” Parris said, “but excellent.”

“I don’t pretend to be a real estate (liquidation) expert,” Carmen said, “but FADA has a severe management problem and I can handle that.”

The four Democrats, however, pointed out that Carmen also has extensive real estate holdings through a development company in which he is a partner--holdings that “may pose a potential conflict of interest.”

“Amidst other . . . allegations which have abounded at FADA,” they added, “it would be unacceptable for the association’s new (chief executive) to have even the appearance of a conflict of interest.”