Posted Apr 30, 2007 04:19 pm CDT
A legal battle has put the spotlight on a little-known lender in the Washington, D.C., area called the National Rural Utilities Cooperative Finance Corp.
Accountant Jeffrey J. Prosser borrowed money for his company from a cooperative subsidiary to finance offshore telephone and cable TV companies. He claimed he was not getting a proper share of the cooperative’s profits, the Washington Post reports.
Defaults have cut the fair market value of the cooperative’s portfolio by $2.7 billion from book value, according to government filings. One rating company has downgraded the cooperative’s bonds to junk status, but others disagree, the newspaper says.