Whistleblower Richard M. Bowen III told The New York Times he plans to “leave this country better off than the way I found it.” He refuses to be muzzled about the financial fraud that led to the multibillion dollar taxpayer buyout of Citigroup. “There’s no question that Richard was censored,” says Steve Kardell, Bowen’s attorney and a partner at the Dallas law firm of Clouse Dunn LLP.
Bowen, while responsible for Citigroup’s mortgage unit’s quality control from 2002 to 2006, discovered that 60 percent of the approximately $50 billion of prime mortgages the bank traded were defective. Citigroup’s credit policies were routinely ignored. Mortgage loan decisions were reversed from “denied” to “approved” and applications were accepted without policy-required documents. “Sub-prime” mortgage investments were resold to investors as credit-worthy.
Concerns Bowen expressed to Citigroup management between June 2006 and November 2007 went unanswered. Bowen then emailed the chairman of the bank’s executive committee, former U.S. Treasury Secretary Robert E. Rubin. Company lawyers stonewalled Bowen and reduced his duties. Bowen filed an OSHA complaint that Citigroup had retaliated against him for whistleblowing, a violation of the Sarbanes-Oxley Act. His SOX claim was subsequently settled.
The Securities and Exchange Commission heard Bowen’s testimony in July 2009, but took no action other than filing over 1,000 pages of documents Bowen provided as Citigroup “trade secrets,” rendering them inaccessible.
Bowen presented oral testimony and a 28-page written statement to Congress’ Financial Crisis Inquiry Commission (F.C.I.C.) in April 2010. Mr. Kardell told Bowen that he thought the F.C.I.C. was “catching some serious, serious heat…from Citi.” Bowen was directed to delete any suggestion from his statement that Citigroup may have “materially misrepresented its certifications of internal controls, which require corporate officers to certify the accuracy of their financial statements under Sarbanes-Oxley.”
Bowen’s F.C.I.C. testimony is sealed until 2016. The statute of limitation for fraud is five years. While the F.C.I.C. denies claims of pressure, Bowen’s testimony coincided with the Treasury’s announcement of its intention to sell 7.7 billion shares of Citigroup stock in 2010.
Anyone with knowledge of fraud is urged to consult a qualified and experienced whistleblower attorney who will look out for your—and the taxpayers’—best interests.
