Audit Notes: hustled, Brauchli fallout, NYT’s Walmart impact

ProPublica connects the dots on a former Countrywide executive named in a DOJ lawsuit

ProPublica’s Paul Kiel reports (with an assist from TheStreet) that the JPMorgan Chase executive in charge of its program to pay foreclosure-scandal victims was implicated by the feds last month in their fraud case against Countrywide.

The executive, Rebecca Mairone, worked at Countrywide and Bank of America from 2006 until earlier this year, when she left for JPMorgan Chase, according to her LinkedIn profile.

In a lawsuit filed last month in federal court in New York, Justice Department attorneys allege that Countrywide, which was bought by Bank of America in 2008, perpetrated a two-year scam to foist shoddy home loans on Fannie and Freddie. Neither Mairone nor any other individuals are named as defendants in the civil suit, and no criminal charges have been filed against her or anyone else in connection with the alleged misconduct. But Mairone is one of two bank officials cited in the suit as having repeatedly ignored warnings about the “Hustle,” as the alleged scheme was called inside the company, and she prohibited employees from circulating some of those warnings outside their division.

Mairone was chief operating officer of the Countrywide lending division that allegedly carried out the “Hustle.” She took the helm of JPMorgan Chase’s involvement in the Independent Foreclosure Review this summer, according to a former Chase employee.

As is the way things go now, neither Mairone nor any other former Countrywide executive was charged in the fraud.

— David Carr writes about Katharine Weymouth’s flubbing of the Marcus Brauchli exit, which, beyond the business concerns long expressed, dents her credibility:

Last summer, Ms. Weymouth began discussing with people outside the paper her desire to replace Mr. Brauchli, less an attempt to undercut him than a rookie mistake of indiscretion. But the ensuing four months of speculation and paralysis further damaged the newspaper.

Once the change was made official, Ms. Weymouth made another mistake; she insisted in interviews that the decision was Mr. Brauchli’s, when most people knew better. Mr. Brauchli declined to comment, but his wife, Maggie Farley, left a large breadcrumb to follow when she asked in a now deleted Facebook post how had “the Washington Post of Watergate fame become the place where you can’t speak truth to power?”

That lack of forthrightness clanked at a news media organization where the chief asset is credibility.

Worse than that, it clanked for readers too.

— That Walmart bribery probe kicked off by The New York Times’s blockbuster investigation into its corrupt payments in Mexico is going global.

And that’s just its internal inquiry:

The announcement underscores the degree to which Wal-Mart recognizes that corruption may have infected its international operations, and reflects a growing alarm among the company’s internal investigators. People with knowledge of the matter described how a relatively routine compliance audit rapidly transformed into a full-blown investigation late last year — involving hundreds of lawyers and three former federal prosecutors — when the company learned that The Times was examining problems with its operations in Mexico.

A person with direct knowledge of the company’s internal investigation cautioned that Thursday’s disclosure did not mean Wal-Mart had concluded it had paid bribes in China, India and Brazil. But it did indicate that the company had found enough evidence to justify concern about its business practices in the three countries — concerns that go beyond initial inquiries and that are serious enough that shareholders needed to be told.

— Make sure you don’t miss this dead-on Oatmeal comic on making stuff for the Web, which pretty much sums up everyday life for many of us journalists these days.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,