By Matt Apuzzo ASSOCIATED PRESS

Wall Street financial firms weren't the only ones giving big bonuses in the boom years before the worst financial crisis in generations. The
government also was handing out millions of dollars to bank regulators,
rewarding "superior" work even as an avalanche of risky mortgages
helped create the meltdown.

The payments, detailed in payroll data released to the Associated Press under the Freedom of Information Act, are the latest evidence of the government's false sense of security during the go-go
days of the financial boom.

Just as bank executives got bonuses despite taking on dangerous amounts of risk, regulators got taxpayer-funded bonuses despite missing or ignoring signs that the system was on the verge of a meltdown.

The bonuses were part of a reward program little known outside the government. Some government regulators got tens of thousands of dollars in perks, boosting their salaries by almost 25 percent. Often,
though, rewards amounted to just a few hundred dollars for employees
who came up with good ideas.

During the 2003-06 boom, the three agencies that supervise most U.S. banks - the Federal Deposit Insurance Corp. (FDIC), the Office of Thrift Supervision (OTS) and the Office of the Comptroller of the
Currency (OCC) - gave out at least $19 million in bonuses, records
show.

Nearly all that money was spent recognizing "superior" performance. The largest share, more than $8.4 million, went to financial examiners, those employees and managers who scrutinize
internal bank documents and sound the first alarms. Analysts, auditors,
economists and criminal investigators also got awards.

After the meltdown, the government's internal investigators surveyed the wreckage of nearly 200 failed banks and repeatedly found that those regulators had not done enough:

c "OTS did not react in a timely and forceful manner to certain repeated indications of problems," the Treasury Department's inspector general said of the thrift supervision office after the $2.5 billion
collapse of NetBank, the first major bank failure of the economic
crisis.

c "OCC did not issue a formal enforcement action in a timely manner and was not aggressive enough in the supervision of ANB in light of the bank's rapid growth," the inspector general said of the agency
after the $2.1 billion failure of ANB Financial National Association.

c "In retrospect, a stronger supervisory response at earlier examinations may have been prudent," FDIC's inspector general concluded after the $1.8 billion collapse of New Frontier Bank.

Because most bank inspection records are not public and the government blacked out many of the employee names before releasing the bonus data, it's impossible to determine how many auditors got bonuses
despite working on major banks that failed.

Regulators said it was unfair to use those missteps, seen with the benefit of hindsight, to suggest any of the bonuses were improper.

"These are meant to motivate employees, have them work hard," OTS spokesman William Ruberry said. "The economy has taken a downturn in recent years. I'm not sure that negates the hard work or good ideas
of our employees."

At the OCC, spokesman Kevin Mukri noted that the national banks his agencies regulate generally fared better than others during the financial crisis.

"In making compensation decisions, the OCC is mindful of the need to recruit and retain the very best people, and our merit system is aimed at accomplishing that," Mr. Mukri said. "We also believe it is
important to reward those who worked so hard and showed such great
professionalism throughout the crisis."

David Barr, a spokesman for the FDIC, which handed out two-thirds of the bonuses during the boom, had no comment.

In government, as on Wall Street, bonuses are part of the culture. Federal employees can get extra pay for innovative ideas, recruiting new talent or performing exceptional work. Candidates being
considered for hard-to-fill jobs may be offered student-loan
reimbursement or cash bonuses to get them in the door and keep them
from leaving.

The bonus data released to the AP does not say specifically why each person received a bonus. For instance, one person in the OCC's financial examining division got a $41,000 recruitment bonus on top of
a $179,000 salary in 2005. In 2006, the last boom year for banks buying
risky mortgages, the FDIC gave out more than 2,000 bonuses to financial
examiners.

In 2008, the year the market collapsed, the OTS gave 96 financial examiners bonuses of up to $3,000 for exceptional work..