Former WaMu CEO Blames Wall Street 'Club'

APRIL 14, 2010
Wall Street Journal
Former WaMu CEO Blames Wall Street 'Club'
Senators Begin Hearings as Regulators Remain Reluctant to Detail Their Handling of Collapse
By JOHN D. MCKINNON And DAN FITZPATRICK

WASHINGTON—Former Washington Mutual Inc. Chief Executive Kerry Killinger scoffed at lawmakers who blamed him for the largest bank failure in U.S. history, accusing regulators of helping only financial institutions deemed "too clubby to fail."

The 60-year-old Mr. Killinger's defiant, two-hour testimony at Tuesday's hearing by the Senate Permanent Subcommittee on Investigations was marked by confrontations with lawmakers who claimed he repeatedly ignored warnings that the overinflated real-estate bubble was about to burst. But the former CEO held his ground, insisting the Seattle thrift's seizure in September 2008 could have been avoided if regulators had offered the same help given to other battered banks, including capital infusions.

"For those that were part of the inner circle and were 'too clubby to fail,' the benefits were obvious," Mr. Killinger said. "For those outside the club, the penalty was severe." A spokesman at the Office of Thrift Supervision, the federal agency that seized Washington Mutual, declined to comment on Mr. Killinger's testimony.

Mr. Killinger's comments were a contrast to the low profile he has kept since the collapse. He shuttles between homes in Palm Desert, Calif., and a gated community in Seattle, and has avoided public events and new business ventures, according to people familiar with the situation.

He was forced to break his silence by the Democratic-led Senate subcommittee, which is trying to build momentum for pending financial-overhaul legislation...

Michael Hazelton and the charter schools that suffered devastation while under his leadership

See all Mike Hazelton posts here.

The following story from Voice of San Diego is so good, I can't think of anything to add to it:

The School Guru Who Promised Rescue and Brought Ruin
By EMILY ALPERT
Part one of a two-part series. Read part two.
Sept. 24, 2008


"...Michael R. Hazelton sold himself as an expert who could help. He was soothing. Gray-haired. Nice. A Harvard University seminar topped his resume, loaded with impressive work at a national company and a school that had once aided Cortez Hill. The school hired him as its executive director to reverse its fortunes.

"Instead its deficit ballooned from $16,559 to $188,187 in the single year that it employed Hazelton. When an audit revealed that he gave himself an $18,350 raise without the blessing of the Cortez Hill board, boosting the six-figure salary that had already dwarfed what his predecessor had earned, Hazelton was already gone..."

Read the whole story HERE.

Photo of Mike Hazelton (above) is from the TIP Academy yearbook.

SIATech test scores don't correlate with staff salaries

The salaries of SIATech Charter School staff in San Diego have skyrocketed, unlike student test scores. A reader sent me the 2006 990 IRS forms for SIATch, which lists wages. The salaries for SIATech Board of Directors and employees:

LINDA DOWSON President of the Board of Directors and Operations Manager $ 220,461.

ED BROWN Director and Operations Manager $ 124,878.

LINDA MILLER Director of Educational Services $172,860.

DAVID JENKINS Assistant Supervisor $ 169,81.

KRISTIN MALLORY Assistant Supervisor $ 168, 896.

DIANE FAIRCHILD Director of Special Education $ 161,348

MANOUCHEHR HADJIAGHAI Director of Administrative Services $ 160, 210.

SIAtech scores went down 45 points from 2007 to 2008. Of course, the children tested in one year are not the same group of children that are tested the next year. Some kids graduate, others move away and new kids take their places.

SIATech tested 135 students. SIATech is 100% funded by the United States Department of Labor (Job Corps), and is not regulated. SIAtech operates the education for about seven Job Corps in California.

SIATech student composition is: African American--15 students; Hispanic: 39 students; White--4 students; English Language Learners 3 students; socioecomomically disadvantaged--67 students; American Indian or Alaska Native--2 students; Filipino--1 student; and no students with disabilities.

Guajome Park Academy improved from 753 in 2007 to 768 in 2008. This charter school averages 21 students per classroom and the staff is highly paid.

More about North County test scores can be found at the North County Times.