WASHINGTON (CNN) -- A recent Treasury Department report of misconduct by a banking regulator is giving watchdogs some ammunition to argue that financial regulators are too cozy with the banks they are tasked with overseeing.
The report, part of a small batch just released by the Treasury's inspector-general, says that a government employee in Florida who served as a bank examiner accepted "gratuities (golf fees and/or food) on at least four occasions" from a bank he was reviewing. The report, conducted in 2010, called the situation a "conflict of interest" for the employee, who worked at the Office of the Comptroller of the Currency.
"You have a government employee, during a time when he has a special responsibility to oversee this bank, actually taking time from work and going to play golf with these folks," said Michael Smallberg, a researcher with the Project on Government Oversight. "It was a pretty striking example of a government employee actually cozying up to the folks he's supposed to be regulating."
But Inspector-General Eric Thorson, who polices the Treasury department and released the files, defended the agency.
"These investigative reports are good examples of the fact that the Department has been successful in demonstrating that there is little toleration for individual misconduct."
"My opinion is that Treasury has an institutional highly ethical culture," he added.
But Smallberg is still critical. "When folks wonder why regulators didn't do a better job of stopping the financial crisis, or they're wondering why OCC didn't spot the huge trading loss at JP Morgan earlier this year, I think part of the issue is just that the examiners were just too close to the folks they were supposed to be examining," he said.
Smallberg wrote about the case last week, after the Treasury inspector-general's report was posted online by the disclosure organization GovernmentAttic.org. The website obtained it through a Freedom of Information Act request. Five other reports from the last few years, in which allegations of misconduct were substantiated, were also made public.
In one case, an employee was found to have used his work computer to solicit prostitutes via the online classified site Craigslist and arrange trysts on three occasions. In another, an employee was found to have emailed internal information about Treasury contracting to her husband, who worked for a contractor. The rest involved disorderly conduct at a stadium; running up a $240 FedEx bill on the government's dime; and banking with a bank that was also regulated by the agency.
The Office of the Comptroller of the Currency responded that it attaches great importance to ethical conduct, and any alleged misconduct is investigated.
"These are isolated incidences, and do not diminish the highly ethical behavior of thousands of other OCC employees," the agency said in a written statement.
And Christian A. Weideman, the Treasury Department's deputy general counsel, said there is "absolutely no evidence of any pattern or trend."
"Unfortunately, in all institutions of every size, there are some employees who act inappropriately," Weideman said. "Although any misconduct is unacceptable, this is a small number that does not fairly reflect a Department with tens of thousands of employees."
While employees are disciplined for any misconduct, the overwhelming majority of them "serve the American people with professionalism, diligence, and integrity," he added.
The disciplinary outcomes for the six employees were not listed -- except for the prostitution case, where the employee retired. Treasury officials referred five of the six cases to criminal prosecutors, although charges were not ultimately filed.
"They did refer them out for prosecution, and I can't see taking more aggressive action than that," said Melanie Sloan of Citizens for Responsibility and Ethics in Washington. "No question that it's all embarrassing, and that it's all unacceptable; but I think Treasury can also be credited for taking it on, doing something about it, not trying to sweep any of this under the rug."