FDIC Watchdog Clears Official Accused of Lying to Congress

WASHINGTON — The Federal Deposit Insurance Corp.'s inspector general has cleared a senior attorney for the agency who had been accused of giving false testimony to lawmakers over the agency's role in "Operation Choke Point."

As acting general counsel, Richard Osterman testified twice last year over the controversial Justice Department initiative to cut off fraudsters from the payments system. He downplayed the FDIC's role, but lawmakers — citing evidence of the agency's collaboration with the DOJ — called into question the accuracy of Osterman's testimony.

But the agency's watchdog, which released a report last week saying the FDIC's role in the DOJ initiative was "inconsequential," said it had concluded Osterman had not lied. (He is currently a deputy general counsel for the agency.)

"The OIG has concluded that Mr. Osterman did not knowingly or willfully provide the Congress with materially false, fictitious or fraudulent testimony," said Fred Gibson Jr., the acting inspector general, in a Sept. 18 memorandum to FDIC Chairman Martin Gruenberg.

Critics have alleged that FDIC officials were influenced by a personal bias against payday lenders and other sectors when the agency released a 2011 list of "high risk" businesses requiring banks that process payments for such firms to better scrutinize those relationships. The FDIC later removed the list, saying that its purpose had been misunderstood.

In his memorandum, Gibson said a more detailed report on the investigation into Osterman's statements would not be disclosed publicly due to "privacy concerns."

Charles Yi has since been appointed as the FDIC's general counsel.