When a state-insured financial institution fails, and Connecticut taxpayers foot the bill, the public is left in the dark as to the causes of the failure. In Connecticut, as elsewhere, if a state financial institution should go into receivership, the relevant regulatory reports by publically-funded examiners — regarding loans to favored insiders, directors, and officers and politicians — are sealed from public view. If the institution is insured by the Federal Deposit Insurance Corp., examiner records are almost never available to the public under federal law. Connecticut law does not appear to be more transparent
The language of Connecticut General Statutes § 36a-237g(b) is facially innocuous. Records of banks in receivership may “upon approval by the superior court” be disposed of by the receiver if those records are “obsolete and unnecessary to the continued administration of the receivership process.” In practical effect, this language — like similar statutes and regulations in 44 other states — have historically shielded from public scrutiny those responsible for mismanagement, fraud and waste.
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