- Chinese Death Star: The moon cited as the perfect launch pad for ballistic missiles
- Help wanted: Homeland Security plagued by vacancies at the top
- We are not amused: Queen’s protection officers warned to keep ‘sticky fingers’ off the royal cashews
- Unleash the crossbows: Gov. Scott Walker creates new hunting season
- Bubonic plague kills 20 in Madagascar
- G-20 diplomats fell for hacker attack promising nude photos of former French first lady Carla Bruni
- Minnesota guardsman charged with stealing private soldier data for fake IDs
- Florida appeals court rules universities can’t regulate guns
- Vladimir Putin defends Russian conservative values
- Tea Party Patriots call key GOP firing a declaration of war
Madoff probe figure gets cash reward
Faced disciplinary action in investigation that missed fraud
Question of the Day
The Securities and Exchange Commission gave a cash bonus to a key participant in the agency's failed investigation of Bernie Madoff even as the employee faced potential disciplinary action, according to government inspectors.
In an audit this week, the Inspector General's Office at the Securities and Exchange Commission (SEC) said the $1,200 cash award in the spring of 2010 underscored a broader issue with the agency's cash awards program.
"The lack of adequate documentation to support cash and time-off awards and approval by division and office heads of awards to employees potentially subject to disciplinary action jeopardizes the integrity of the awards program," the inspector general said.
The inspector general's report reviewed the agency cash awards program, finding that bonuses often lacked sufficient documentation.
"While we agree it's useful to incentivize employees through cash awards, we often find ourselves needing to direct our limited resources to monitoring the markets and pursuing enforcement actions," SEC spokesman John Nester said in an email Tuesday, responding to the report.
"That is one of the reasons why our reward program is significantly smaller than those of other federal agencies, and average individual awards, according to the inspector general, are nominal," Mr. Nester said.
The inspector general's report was reported on Monday by the Project On Government Oversight (POGO).
In August 2009, the inspector general finished an in-depth investigation into the SEC's failure to uncover the Madoff fraudulent investment scheme. That report found that early SEC examinations of Madoff were too limited and conducted by inexperienced personnel.
The inspector general recommended that "appropriate action" be taken on an "employee-by-employee" basis of those involved in the failed Madoff examinations.
One of the participants in both a failed 2005 examination of Madoff and a 2006 investigation nonetheless managed to receive a $1,200 cash award from the SEC in 2010, according to the report.
The employee was not rewarded for earlier Madoff work but was credited with efforts in 2009 "pertaining to a follow-on investigation of Madoff," the report said.
After a review by an outside law firm hired by the SEC, officials eventually concluded the employee's actions "did not warrant formal disciplinary action," the inspector general's report said.
Still, the inspector general said the law firm report did not dispute "serious performance issues" about the employee, the report said. The report did not identify the employee.
Michael Smallberg, an investigator at POGO, said the reward raised serious concerns about how cash bonuses are distributed.
"By rewarding an employee whose ineptitude contributed to the massive investor losses, it appears the SEC has made a mockery of its inspector general and the system of merit-based awards at the agency," he said.
Madoff is serving a 150-year prison sentence after pleading guilty to the massive Ponzi scheme.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
About the Author
- Stung by defeat: SEC hires trial consultants
- Solaria? Solyndra? Feds bailed on promising solar company, lawsuit says
- Last call: State Dept. bought $180,000 in liquor before shutdown
- Federal prosecutors drop charges against defendants who disappeared
- Bankrupt energy company probed
Latest Blog Entries
By Matt Kibbe
The short-term deal will assure long-term overspending
- Obama's Afghanistan experts stumped on U.S. death toll, war costs during hearing
- Comma on!: Twitter erupts over Obama-Castro 'marriage'
- NAPOLITANO: A conspiracy so vast
- N. Korean news agency: Kim Jong Un's uncle executed
- All-out war breaks out in GOP over budget pact
- White House improvises again on patchy Obamacare rollout
- Biden guarantees victory on immigration reform
- Jane Fonda Foundation fails to make single contribution in 5 years: report
- Obama takes 'selfie' at Mandela's funeral service
- VEGAS RULES: Harry Reid pushed feds to change ruling for casino's big-money foreigners
Independent voices from the The Washington Times Communities
Born in 1930 in rural Missouri, Charles Vandegriffe, Sr., brings his time and place to the Communities.
Columns from Voices around the World talking about the events, people, politics and social issues that concern us wherever, and whoever, we are.
Chef Mary Moran discusses the food we eat, where it comes from and what it does for us.
An informed and often humorous take on the world of advertising, public relations and social media. 100% Pure. Not from concentrate.
Extraordinary day at Redskins Park
White House pets gone wild!
Let it snow