Missouri auditor: Finance division holding back records

Tuesday, May 3, 2011 | 12:51 p.m. CDT

JEFFERSON CITY — Missouri's banking regulator has refused to release some of its records for a regular audit, saying to do so would violate the law, the state's auditor said Tuesday.

Auditor Tom Schweich said that his office needs all of the Division of Finance's banking records to determine whether the regulators are doing their job correctly.

The division has released the records relating to banks it has closed but refuses to release records from banks that are still in operation, Schweich said. From the records that have been released, auditors have found that the division was late in conducting examinations 47 percent of the time and overcharged banks for the costs of the examinations by $1.5 million.

The auditor's office has issued subpoenas for the banking records in question to be turned over by May 17 and will conduct a full audit once those documents have been made available, Schweich said.

The Division of Finance said state law bars it from showing anyone the banking records, including the auditor's office. The division said its employees could be thrown out of office and fined for turning over the documents.

Travis Ford, a spokesman for the Department of Insurance, Financial Institutions and Professional Registration, said Tuesday that the documents might reveal the financial conditions of the banks.

"It's a criminal offense to release them," he said. "There's no exception in the statute for the auditor."

Schweich said state law makes an exception for some state officials, including the auditor. He said his office is not trying to audit the performance of the banks, but is instead trying to verify that the finance division is following its own procedures for examining the institutions.

"They're not immune from oversight. No one is immune from oversight," Schweich said of the division. "All they've been doing is trying to obstruct our investigation."

The auditor's office frequently encounters confidential documents when auditing other state and local agencies, Schweich said, adding that confidentiality agreements impose penalties on staffers who wrongly disclose private information.

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