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Suit Shines Spotlight on Obscure Lender

Posted Apr 30, 2007 11:19 AM CDT
By Debra Cassens Weiss

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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.

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