However I have no reason to believe it's not true (apart from the fact that it's in the DM of course!).
I think the fact it is the DM is an exceptionally good reason to believe it's not true
I suspect their may be a grain of truth in there somewhere, but it is hard to tell without another source.
This article addresses a different point but is equally worrying.
I agree with that. The possible implications of the scheme if mistakes are made by the named person are pretty serious - it needs a really roubust and independent complaints scheme to be able to deal with issues quickly and fairly.