Resolution Trust Corporation:

Progress Under Way in Minority and Women Outreach Program for Outside Counsel

GGD-91-121: Published: Aug 30, 1991. Publicly Released: Aug 30, 1991.

Additional Materials:

Contact:

Gaston L. Gianni
(202) 736-0479
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed the Resolution Trust Corporation's (RTC) policies and processes for obtaining outside services through contracts and for including minority-owned and women-owned law firms in those opportunities, focusing on: (1) RTC progress in establishing, implementing, and overseeing its minority and women outreach program for outside counsel; (2) program shortcomings that may prevent more referrals to minority-owned and women-owned firms; and (3) actions taken to increase the participation of those firms.

GAO found that: (1) RTC and Federal Deposit Insurance Corporation (FDIC) officials attributed the slow start in establishing a minority and women outreach program to insufficient staffing; (2) since April 1991, RTC has implemented and expanded a pilot program designed to increase the number of minority-owned and women-owned firms on the national list of counsel utilized (LCU) and conducted several training seminars for outside counsel; (3) the RTC Board of Directors recently approved regulations for including minority-owned and women-owned firms in all RTC contracting activities; (4) in the nine RTC offices visited, the minority point persons were charged with carrying out the outreach program responsibilities in addition to their legal work; (5) at the offices visited, the outreach programs were at various stages of development; (6) FDIC and RTC adopted a joint venture program that may increase the areas of expertise for minority-owned and women-owned firms, but shortcomings exist; and (7) program shortcomings included inappropriate firms and inaccurate and insufficient information in LCU, differing interpretations of certain factors used to select outside counsel, the inability of RTC monthly case referral reports to track all legal conservatorships and receiverships, and limited headquarters oversight of outreach activities in the regional and consolidated offices.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The RTC Refinancing, Restructuring and Improvement Act of 1991 separated RTC from FDIC. Thus, FDIC no longer manages RTC legal activity. RTC is currently placing its minority and women outreach program under its Department of Minority and Women's Program. The Director of the Department plans to hire two attorneys who will be responsible for carrying out the program's objectives for field offices.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should assess the adequacy of staffing levels assigned both in headquarters and the field offices.

    Agency Affected: Federal Deposit Insurance Corporation

  2. Status: Closed - Implemented

    Comments: In November 1992, TRC transferred its Minority and Women Outreach Unit from its Legal Division to the Office of Legal Programs within the Department of Minority and Women Business Programs. This consolidation includes an increase in headquarters and field staff.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should assess the adequacy of staffing levels assigned both in headquarters and the field offices.

    Agency Affected: Resolution Trust Corporation

  3. Status: Closed - Not Implemented

    Comments: The RTC Refinancing, Restructuring and Improvement Act of 1991 separated RTC from FDIC. Thus, FDIC no longer manages RTC legal activity. In May 1992, RTC began including a law firm's area of expertise on its list of counsel, which is now referred to as the list of counsel available. Plans to include information on a firm's rates is not available because the system is not operational.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should enhance the usefulness of the list of counsel utilized by including such information as the firms' areas of expertise and rates.

    Agency Affected: Federal Deposit Insurance Corporation

  4. Status: Closed - Implemented

    Comments: RTC agrees with the recommendation and plans to have the information on firms' areas of expertise and rates included with the implementation of its Legal Division Information Management System. In May 1992, RTC began including a law firm's area of expertise on its list of counsel utilized, which is now referred to as the list of counsel available. On July 8, 1994, RTC developed "Policies and Procedures for the Selection and Engagement of Outside Counsel." These contracting procedures require that information on proposed rates for types of services to be provided be submitted by the law firm and evaluated by the legal services committees who oversee the selection and engagement of outside counsel by RTC.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should enhance the usefulness of the list of counsel utilized by including such information as the firms' areas of expertise and rates.

    Agency Affected: Resolution Trust Corporation

  5. Status: Closed - Not Implemented

    Comments: The RTC Refinancing, Restructuring and Improvement Act of 1991 separated RTC from FDIC. Thus, FDIC no longer manages RTC legal activity. In February 1992, RTC issued its Guide for Outside Counsel which includes guidance on selecting outside counsel. In January 1992, RTC issued its legal division policy concerning maximizing the inclusion of minority- and women-owned law firms.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should develop and consistently implement procedures for selecting outside counsel to ensure that minority-owned and women-owned firms are considered for providing legal services for which they are qualified.

    Agency Affected: Federal Deposit Insurance Corporation

  6. Status: Closed - Implemented

    Comments: In February 1992, RTC issued its Guide for Outside Counsel which includes guidance on selecting outside counsel. Additionally, in January 1992, RTC issued its legal division policy concerning the minority and women outreach program which includes information on maximizing the inclusion of minority- and women-owned law firms.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should develop and consistently implement procedures for selecting outside counsel to ensure that minority-owned and women-owned firms are considered for providing legal services for which they are qualified.

    Agency Affected: Resolution Trust Corporation

  7. Status: Closed - Not Implemented

    Comments: The RTC Refinancing, Restructuring and Improvement Act of 1991 separated RTC from FDIC. Thus, FDIC no longer manages RTC legal activity. RTC is in the process of placing its minority and women outreach legal program under the responsibility of its Department of Minority and Women's Program and believes that once this change occurs, this will improve the oversight of the legal program in the field.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should enhance oversight of the outreach activities at the regional and consolidated offices to ensure they are in agreement with the objectives of the outreach program.

    Agency Affected: Federal Deposit Insurance Corporation

  8. Status: Closed - Implemented

    Comments: In November 1992, RTC consolidated its Minority and Women Outreach Programs for legal and business contracts. This consolidation established the new Office of Legal Programs which is responsible for establishing and overseeing the implementation of policies and procedures by the field offices to ensure that the program's goals and objectives are achieved.

    Recommendation: To improve the minority and women outreach program for outside counsel, RTC and FDIC should enhance oversight of the outreach activities at the regional and consolidated offices to ensure they are in agreement with the objectives of the outreach program.

    Agency Affected: Resolution Trust Corporation

 

Explore the full database of GAO's Open Recommendations »

Jul 25, 2016

Jul 5, 2016

May 6, 2016

Apr 21, 2016

Apr 18, 2016

Apr 12, 2016

Mar 28, 2016

Mar 8, 2016

Feb 16, 2016

Jan 27, 2016

Looking for more? Browse all our products here