In 1977, FDIC Chair Charged Thousands in Personal Expenses

Robert E. Barnett, then-chairman of the Federal Deposit Insurance Corporation, used federal money to pay for personal expenses. These expenses included private tennis club membership fees, buying locks for the doors of his house, and personal travel expenses for his wife. 

For the countless thousands of dollars in “outrageous expenditures,” Sen. William Proxmire, a Democrat from Wisconsin, gave the FDIC a Golden Fleece award for wasteful and nonsensical spending. 

Barnett was chairman from March 18, 1976 to June 1, 1977, during which he used the FDIC as his own personal piggy bank, Proxmire said. 

The Government Accountability Office — then called the General Accounting Office — revealed the expenditures in a report. 

Among the other spending was paying the travel expenses of his wife, who went with him on seven trips to places including Puerto Rico (twice), Manila, and Mexico City. Barnett billed the FDIC for over $6,100 — $28,300 in 2022 dollars — to pay his and his wife's travel expenses. 

While it’s unclear how much this cost, Barnett used agency vehicles for personal reasons, including to transport Mrs. Barnett to the doctor, to transport Mrs. Barnett and her children on a visit to the Hirshhorn Museum, and to chauffeur the Barnett children to Rehoboth Beach, Delaware by two FDIC employees using an agency car, Proxmire said, detailing the GAO report. 

The FDIC also spent $1,388 in June and July of 1976 — $6,858 in 2022 dollars — to install locks and other security devices in Barnett's home.  

It’s also unclear how much the FDIC paid for Barnett's membership fees in a private tennis club in Virginia.  

"The GAO report indicates that the FDIC allowed its former head to use agency funds for his personal benefit,” Proxmire said. “These improprieties are not only deserving of a Fleece but underscore the need to put the expenditures of the FDIC and the other bank regulatory agencies in the federal budget.” 

The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.