"Government rewarded bank auditors with big bonuses"

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WASHINGTON | The U.S. government handed out millions of dollars in bonuses to regulators at agencies that missed or ignored signs that the financial system was on the verge of a meltdown, an Associated Press investigation has found.

The bonuses are the latest evidence of the government’s false sense of security during the go-go days of the financial boom. Just as bank executives got bonuses despite taking on dangerous amounts of risk, regulators got taxpayer-funded bonuses for doing “superior” work.

The bonuses, released in response to a Freedom of Information Act request, were part of a little-known reward program. Some government regulators got tens of thousands of dollars in perks, boosting their salaries almost 25 percent.

Some other rewards seemed appropriate, however, amounting to a few hundred dollars for employees who came up with good ideas.

In the 2003-06 boom, the three agencies that supervise most U.S. banks — the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency — gave out at least $19 million in bonuses, records show.