RTC employees testify they gave feds phony stats.

Former and current Resolution Trust Corp. employees told a Senate committee the agency damaged San Diego's real estate market by selling assets at below-market prices.

They also testified the RTC provided phony reports to Congress.

The testimony bolsters the claims of local officials who have made similar complaints regarding the seizure of HomeFed Bank.

Below-market sales have done "tremendous damage" to entire market areas, said Thomas O'Bryon, a former RTC employee in Southern California.

"San Diego is a prime example of this," he said.

Falsified Reports

O'Bryon and Hans Mangelsdorf, senior property manager at the RTC office in Newport Beach, also testified before the Senate Banking Committee that they were often asked to falsify reports for the RTC office in Washington, D.C., or for congessional reports.

When a report to the House Banking Committee in 1992 was taking too long to compile, "management told us to stop where we were, double it, and add 10. Those were the numbers we gave you," Mangelsdorf said.

The two, who could not be reached for further comment, were witnesses at a banking committee hearing Sept. 24 on alleged fraud and mismanagement at the RTC.

Two who testified in San Diego at a special House Banking Committee hearing in early September on the HomeFed takeover, said the new testimony came as no surprise.

"Typically, where there's smoke there's fire," said Ted Sprink, president of HomeFed Corp., the bank's holding company. Sprink, who was in Washington, D.C., two weeks ago, also said he has "been informed" that the RTC's inspector general is investigating whether the numbers presented in San Diego by the RTC were "distorted, if not fabricated."

Local real estate expert Gary London also testified at the House committee meeting that the RTC's actions were hurting the local real estate market.

The RTC claims that sales of HomeFed real estate following the seizure totaled $84.1 million, or less than 1 percent of all sales in the region. The agency received just under 78 percent of the appraised value of the property. The RTC rejects the idea that the "dumping" of property had further crippled an already weak real estate market in San Diego.

Sprink said he expects that the testimony from the Senate committee will further validate a $5 billion lawsuit HomeFed Corp. has filed against the RTC. The suit, filed several months ago, will be served to the defendants within a week, Sprink said.

The office of the inspector general did not return phone calls before press time.

Asked about a probe into the numbers, RTC spokeswoman Diane Zyats said the agency was "not aware of any kind of study" investigating the HomeFed figures. There is "no reason" to question those figures, she said. She did say the RTC has "tightened up its management" since a critical inspector general's report that found the agency had ignored contracting policies, procedures and costs.

Rejected Top Dollar

However, O'Bryon, who is now a consultant to potential buyers of RTC assets, cited examples of the agency rejecting top-dollar bids for property, often putting it up for sale by auction at a reduced price, instead.

"Actions such as this cost the taxpayers millions," he said.

Those statements were similar to allegations made at the HomeFed hearing, including one that the RTC had sold the Nexus Technology Centre in University City for $3.34 million, despite an offer for $19 million on the table.

Hearing comments from the RTC in San Diego was "frustrating," said real estate expert London, because they were "contrary to everybody's experience in and out of the RTC."

But, he added, there's little the RTC can do now, except to try and improve its actions as it disposes of the remaining HomeFed assets.

"The damage has already been done," he said.