RTC Workers Say Cleanup Is Mismanaged : Thrifts: Government employees tell Senate panel that the West Coast office has lied and wasted hundreds of millions of taxpayer dollars.

Government employees accused their bosses in the Western office of the Resolution Trust Corp. of lying to Congress, abusing their positions and wasting as much as $500 million in taxpayer funds trying to clean up failed California thrifts.

Three employees and a former employee from the RTC’s West Coast office in Newport Beach told the Senate Banking Committee at a hearing Thursday in Washington about complaints festering almost since the agency opened shop more than three years ago in the fancy headquarters of a failed Costa Mesa thrift.

They were among a parade of RTC workers who held senators spellbound with testimony about fraud and mismanagement and claims that whistle-blowers, not wrongdoers, end up being punished.

No RTC management officials testified, although Sen. Donald W. Riegle Jr. (D-Mich.), the committee chairman, said they will have the opportunity to do so at a future hearing.

“Some very serious allegations were made by some people who seem to believe all or most of what they were saying,” agency spokesman Steve Katsanos said. “There’s going to be a new CEO, and his job will be to sift through what has been said and decide what is fact and fiction and take any appropriate action.”

Testifying under oath, 13 witnesses described how a combination of allegedly fraudulent contracting procedures, a bungling bureaucracy and alleged cover-up of wrongdoing create an agency, where, as one former RTC official put it, “taxpayers are taking it in the shorts.”

Among those testifying were Hans Mangelsdorf, Sandra Chrisman and Annette LePique from the RTC’s Newport Beach office, and Thomas O’Bryon, a former worker there.

The RTC’s legal staff in Newport Beach also has been heavily criticized for, among other things, sexual discrimination and harassment. But no one from the staff testified, some of them saying they could not afford to be tagged as whistle-blowers.

A source close to the Banking Committee said the Newport Beach office is perhaps the most problematic of the agency’s six major regional offices, which are called supersites.

“This is horrible,” Sen. Howard M. Metzenbaum (D-Ohio) blurted out at the end of the five-hour investigative session. “This is one of my most embarrassing moments in government.”

When it was over, Metzenbaum, who is not on the panel but has long scrutinized RTC affairs, had secured a pledge from Riegle that the allegations made Thursday will be formally presented to Atty. Gen. Janet Reno for potential prosecution.

“It’s too purposeful to be gross incompetence,” Riegle agreed.

“These people are punished for telling the truth,” said Sen. John Kerry (D-Mass.), “but the managers are running around getting promotions. They’re the ones who ought to be fired.”

Florida real estate developer Stanley G. Tate has been nominated by President Clinton to head the troubled thrift bailout agency, but the Senate has yet to hold confirmation hearings. “I don’t want to confirm anyone,” Riegle said, “until we have a plan to stop this kind of thing--period.”

Among the chief allegations:

* That the agency has often offered phony numbers to congressional fact finders, including one 1992 request by the House Banking Committee for property sales figures. “It was taking a long time,” said Mangelsdorf. “So management told us to stop where we were, double it, add 10. Those were the numbers we gave you.”

* That top officials in the agency’s Newport Beach office received promotions even though internal investigations determined that they had harassed or discriminated against female employees.

* That the agency routinely rejects top-dollar bids for property, includes them in bulk sales packages where they sell for less or is stuck when willing buyers become frustrated by red tape. One former official estimated losses at $500 million or more in California alone.

* That investigators and attorneys in Texas were often unable to pursue cases--or even issue subpoenas--even though Texas thrifts account for a major amount of industry losses. Thomas Burnside, a former agency attorney in Dallas, said the Houston field office issued just three subpoenas in the 37 cases it handled.

* That two top legal managers in the agency’s Atlanta office were unqualified, one having previously worked as a receptionist, the other as a butcher.

Associated Press contributed to this report.