Mayor Ed Lee's New Port Commissioner, Doreen Woo Ho, Clarifies Role in 2009 S.F. Bank Failure

What did Doreen Wu Ho Know About Tommy Wu? And When Did She Know It?
Earlier this month, Mayor Ed Lee appointed Doreen Woo Ho as port commissioner, which raised many eyebrows here, given that she was a top official at the failed United Commercial Bank.

In November, United Commercial Bank was seized by federal regulators, just a month after she was named CEO.

The man who hired her in January 2009 is the bank's former chief executive, Tommy Wu, who has been accused by the FDIC, bank shareholders, and a U.S. bankruptcy trustee of building a banking empire based on deception.

Of the many bank collapses that followed the 2007 mortgage crisis, UCB was unique because it had received $300 million in federal bailout funds -- money that was supposedly meant for banks that were deemed healthy enough to stand bad financial weather.

But according to a subsequent federal report, Wu and his subordinates defrauded the government, leading it to believe the bank was healthy.

So when Lee recently announced Woo Ho's appointment, he failed to mention the multiple federal and state fraud investigations into her most recent employer. Suddenly, the question of what Woo Ho knew, and when she knew it, became vitally important.

The Port Commission manages billions of dollars' worth of infrastructure and is overseeing San Francisco's America's Cup bid --  a complicated public-private transaction that has raised concerns over potential number-fudging.

To get a little more insight about how Woo Ho would handle her new role, we called and e-mailed her questions about her role at United Commercial Bank.

To our pleasant surprise, she responded -- and forthrightly. She said that during her brief tenure at the bank, she stood above the mire of insider fraud. She insisted that she had not been a target of FDIC enforcement actions, and that the retail-banking area of UCB, which she oversaw, was not the focus of government-fraud allegations.

Here is the Q&A:

SF Weekly: Have you received any kind of notice from the FDIC indicating that your actions pertaining to United Commercial Bank and or UCBH may have been negligent? Have you settled, or made any offer of settlement, with the FDIC? Has the FDIC made any demand on you for monetary damages?

Woo Ho: No to all of the above.

SF Weekly:  According to the FDIC Inspector General's Material Loss Review of United Commercial Bank, FDIC examiners "recommended that the salary provisions of the employment contracts of two executives, the president/CEO and the director of community banking, be amended to conform with CPP regulations. Did this recommendation coincide with your tenure as director of community banking? In what way did the FDIC say your employment contract did not conform to CPP regulations?

Woo Ho: As stated in the material loss review, following your quote "UCB subsequently amended these contracts." And this area of the report starts with "Where examiners found UCB to be in compliance with the CPP." As I recall, my employment contract was signed in January prior to the issuance of any specific CPP guidance and regulations on compensation, which came out starting in February 2009 and, therefore, proper adjustments were made accordingly after the new regulations were issued.

SF Weekly: The material loss review also states that Tommy Wu fostered a culture that led to the bank's approval of a large number of exceptions to the bank's policy so UCB could make more loans. And he also fostered a combative culture where management failed to downgrade nonperforming loans in a timely manner. After Mr. Wu hired you as director of community banking in January 2009, did you find a situation consistent with the FDIC IG's assessment? As director of community banking, did you participate in the approval of exceptions to the bank's policy so UCB could make more loans?

Woo Ho: I was engaged as the president of community banking and responsible only for retail-consumer loans, in addition to the retail-banking branches. All of the loans referenced above were commercial real estate and construction loans, which were outside of my responsibility until I succeeded Tommy Wu as CEO. I did not approve or extend any commercial loans of any type during my tenure at UCB and was not involved in any downgrading reviews of any loans.

SF Weekly
: To state the matter differently, during your time as UCB president of community banking, were you aware of internal concerns regarding what are now allegations of UCB practices that delayed negative consequences at the bank by improperly modifying loan terms?

Doreen Woo Ho: As stated above, all of the above were part of the commercial-loan division and was outside of my responsibility as president of community banking.
SF Weekly: Additionally, you've been criticized for making statements, while serving as the bank's CEO, suggesting a bright future ahead for UCB. Can you explain why you make this kind of statement?

Doreen Woo Ho: I disagree that I was suggesting a bright future. The October 1 letter was simply a factual progress report on all the issues that the bank was facing and the initiatives in place to save the bank. We had no indication or knowledge of the FDIC's timetable at that time. Technically, under the Cease and Desist Order, we had more time to work our issues and were operating under that assumption.

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Good to see Mayor Ed Lee charting a course of civility, of the "third way" that just happens to be the first way warmed over.


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