Reagan Official Lobbies Bank Board Associates
Gerald Carmen, a former Reagan Administration official who profited through his contacts at the Department of Housing and Urban Development, also is making money through contacts with his former associates at the Federal Home Loan Bank Board.
Carmen recently helped arrange a 40-minute meeting between Florida bankers pushing for a government contract and Mary Creedon, who runs the bank board office that awards such contracts. Carmen, who recently left the bank board system to open a consulting firm, also attended the meeting.
For the record:
12:00 a.m. July 19, 1989 FOR THE RECORD Post Story on Carmen Was Incorrect
Los Angeles Times Wednesday July 19, 1989 Home Edition Business Part 4 Page 2 Column 5 Financial Desk 5 inches; 164 words Type of Material: Correction
On July 11, The Times published a story from the Washington Post reporting that Gerald Carmen, former head of the Federal Asset Disposition Assn., a unit of the Federal Home Loan Bank Board, helped arrange a meeting with a bank board official on behalf of a client who was seeking a contract to manage foreclosed properties.
The Post said Tuesday that it subsequently learned that Carmen did not set up the meeting, which was arranged by a person who works at Financial Institution Services Corp., as does Carmen, and who attended the meeting with Carmen. Carmen is president of FISC but is not the controlling shareholder, according to a company spokesman.
The spokesman said that, contrary to unattributed statements in the Post’s article, Carmen had not profited from “contacts” at the Department of Housing and Urban Development and FHLBB but rather had used his government “knowledge and experience” to assist clients and pursue business interests.
The article also reported incorrectly that Carmen had been a Republican fund-raiser in New Hampshire and was a former car dealer. He had been a Republican Party official and was in the tire business, the spokesman said.
The bankers--Thomas Carney and his son, Thomas Carney Jr., of Carney Bank of Ft. Lauderdale--were able to plead their case personally with Creedon for a contract to manage Florida property the bank board has inherited from a failed S&L.;
Creedon said she didn’t remember who arranged the meeting but that Carmen’s involvement with the Carneys had nothing to do with her decision to see them. She said that she has met with dozens of individuals vying for contracts over the years but that she is too busy to meet with each of the hundreds of applicants who want to do business with the bank board.
Creedon said she could not recall why she decided to meet with the Carneys but that, in general, she sees potential bidders only when she has time or if they have an unusual problem.
‘Not Selling Access’
David Carmen, a consultant and spokesman for his father’s firm, defended the session with Creedon, describing it as a routine meeting to make sure “our client” was following the right procedures to win property management contracts.
“We’re not selling access,” the younger Carmen said, adding that other firms with former bank board officials on their payrolls have gotten large property management contracts. “We’re the little guy,” he said.
Both Carneys described the meeting as a “routine” effort to try to win a government contract.
“We went up there to show our faces, to show who we were,” the elder Carney said.
“It’s a very closed shop up there,” said the younger Carney. “It’s very tough for new firms that are otherwise qualified to break into the group that are allowed to manage property.” He said he believes Creedon agreed to the meeting because of his persistence.
The contract the Carneys seek has not yet been awarded. But competitors of the Carneys who have been unable to meet with Creedon are envious of their access.
HUD Secretary Jack Kemp has said the ability of former government officials to earn fees for providing access that ought to be available free to any contractor has turned his department into “a swamp.”
Carmen has been one of several influential Republicans who have benefited from a controversial low-income housing program at HUD. Carmen’s project in Arlington, Tex., in 1987--when he was between government jobs--received unusually rapid approval after Carmen made several calls to HUD decision-makers, HUD records show. The Arlington project is one of several HUD deals that are under scrutiny by the department’s inspector general.
“Of course it’s wrong,” House Banking Committee Chairman Henry B. Gonzalez (D-Tex.) said when asked to comment on Carmen’s meeting at the bank board. “This is just one more specimen of predators turned loose on government largess.”
Carmen’s intervention at the bank board comes at a sensitive time for the agency’s chairman, M. Danny Wall, who is fighting to keep his job amid charges from Congress that he has bungled the government’s oversight of the S&L; industry and has mismanaged his agency.
Bank board spokesman Karl Hoyle defended Creedon’s meeting with Carmen and his clients. “There’s nothing wrong with it,” Hoyle said. “Mary Creedon meets with people all the time.”
The elder Carney, who travels frequently to New Hampshire to oversee a race track he owns there, has become friends with Carmen, a car dealer and Republican fund-raiser from New Hampshire, during the last 10 years.
Carmen, who headed the General Services Administration during the Reagan Administration, recently resigned as president of the Federal Asset Disposition Association, or FADA, a bank board unit that manages property the government inherits from failed S&Ls.;
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