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on the

Looting of U.S. Saving and Loans

 


 

This is an UPDATE to the original S&L pages. Much of the material in these pages came from a series of letters I wrote to the San Jose Mercury News beginning in April 1994 in an attempt to get them to balance their reporting of Whitewater with equally vigorous reporting on the FOUR Lootings of U.S. Savings and Loans during the Reagan and Bush administrations. The letters were based on research into the Lootings from several books written in the late 1980s and early 1990s.

In addition to a request for balance and fair play, I was attempting to redress the failure of the Mainstream Media to cover the Lootings at the time they occurred. The Mainstream Media reporting on the Lootings was fragmentary, spread out over a period of several years, and never received extensive investigative reporting. There were exceptions, Pete Brewton's articles in the Houston Post that resulted in his The Mafia, CIA & George Bush in 1992 and a series of articles by three northern California writers that resulted in their Inside Job: The Looting of America's Savings & Loans published in 1989. By 1994 and the Whitewater coverage it was evident that no one in the Mainstream Media or the reading public as a whole, had read either book.

Today, in 1998, the reading and viewing public in the United States are subjected to a daily barrage of material intended to entertain and indoctrinate. Information on serious subjects important to the future of this country are ignored, dumbed-down or distorted . On some subjects -- sports and sex, just to name a few -- the coverage is so great we begin to suffer from a state of mental indigestion. In vivid contrast, we have some topics the Mainstream Media simply will not cover today and did not cover in the past. The Lootings of the American Savings and Loans from 1985 to 1995 is one of these topics. On this subject, the American people are simply not Information-Poor, they are Information-Starved.

As you will see in some of pages, the letters usually are based upon one or more of those unread books on the Lootings. It is still my intention to put together a time-based narrative of the specific S&Ls that were looted for the benefit of wealthy Republicans. But on re-reading some of the letters I have come to realize that their sense of immediacy and purpose would be lost when re-written in narrative form. Moreover, the preparation of the narratives will take me weeks and months of work. So I will give you the letters now, and in a few months, the narratives. (The meat now, the potatos, or is that the potatoes, later).



I have been studying the S&L Scam of 1985 to 1995 for almost four years now. As I have mentioned elsewhere, the coverage of the FOUR SEPARATE LOOTINGS of the S&Ls in the Mainstream Media is a joke.

For something that has cost the American taxpayer between $400 BILLION and $500 BILLION dollars the lack of Mainstream Media coverage is somewhat curious until you realize they believed this information was best kept from the American people. After all, the money went into the RIGHT pockets, didn't it?

For something that has cost the American taxpayer between $400 BILLION and $500 BILLION dollars the lack of information from the Government on the extent of the Scam is disgraceful. With these Web Pages, I hope to accomplish three objectives.

My first objective is to convince President Clinton to

(1) Direct the OMB or the Treasury Department to produce a current study on the amount of money the S&L Scam has ;cost the American taxpayers to date.

(2) Have Clinton open the files of the Resolution Trust Corporation and the other S&L regulatory agencies to investigation, preferably through posting on the Internet.

(3) I even have some hope of convincing Janet Reno that another OIC needs to be appointed, this time determine if any people in the S&L regulatory agencies, or in her department or the FBI were part of the Scam. As far as I can determine, if a federal official had been involved in criminal acts to protect a fellow Republican (or Democrat) then the statute of limitations no longer applies.

Books

Fortunately a number of good reporters did write some books on the subject, and these have provided much of the information that I used in a series of letters to the San Jose Mercury News from early 1994 onwards in an attempt to get some investigative reporting into the S&L criminal activity. I received no replies to any of them. Let an aged movie star die and he or she gets front page coverage. Let the average American family be robbed of from $5,000 to $10, 000 dollars apiece and there is no story. It is also interesting that at least two of the reporters writing on the S&L Scam (Pete Brewton and Stephen Pizzo) have now been ostracized by the main stream media.


 

While all of the Web Pages on the Savings and Loan Scam will be works in progress, there is a special set of Pages that should be close to the heart of anyone who wants the S&L criminals and the government officials who shielded them during the 1980s and early 1990s, identified and indicted for criminal acts against the people of the United States. Well over a thousand Savings and Loans collapsed during the Reagan and Bush administrations and were reponsible for much of the billions of dollars it cost the American people. Yet I cannot locate a list of these S&Ls and the amounts of money looted from them. Therefore, one of the Web Pages is called

LIST #1 - THE LIST OF THE LOOTED S&Ls AND THE AMOUNTS OF MONEY LOOTED

I will need the help of all those who visit this Web Site to add the names of the looted S&Ls to the list, and the amounts of money looted from each. In addition, please provide the source of information to the E-mail address below.


 

The means by which the S&Ls were looted varied from S&L to S&L. There are strong indications in the literature (the books, not the Mainstream Media) that Organized Crime and the Mafia set up various swindles with cooperating S&L owners and managers to skim off millions of dollars. Then there was any number of fraudulent real estate transactions in which the S&Ls were robbed. None of these received much attention in the Mainstream Media because of the political connections of the people defrauding the S&Ls.

Because much of this was ignored in the Mainstream Media, Federal and state law enforcement agencies gave a pass to much of this, and even in those cases that were criminally investigated, finally gave a pass to frauds where the money being defrauded was less than $20 million dollars (or was it $100 million dollars?) Certain people were allowed to default on loans in the tens of millions and in at least one case, in the hundreds of millions of dollars. Who were these people? What were their political affliations? Did they make contributions to the major political parties, and if so, to which ones? Were their political contributions the reason why many of the people were never investigated by state or federal officials, or brought before federal grand juries? Then again, perhaps some of the defaulted loans were legitimate. But in any case, the Mainstream Media yawned and looked away. Therefore another Web Page is called:

LIST #2 - THE LIST OF THE NAMES OF PEOPLE WHO DEFAULTED ON LARGE LOANS TO S&Ls THAT CONTRIBUTED TO THE COLLAPSE OF THESE S&Ls.

As you will see, the initial list is limited to just a few names.


 

The first looting of the S&Ls caused them to collapse. The federal S&L regulatory agencies took over the assets of the failed S&Ls. Some of these assets were real property -- buildings and land, or simply land. In disposing of this property, speculators and multi-millionaires were given first crack at acquiring the properties at cut-rate prices. Various public-advocacy groups attempted to acquire some of this property for their programs, but always seemed to lose to the well-connected speculator groups and the rich. I would be glad to create a list showing some of these things if the readers of these pages want to send me an E-mail at the address below. This list would be:

LIST #3 - THE DISPOSITION OF S&L PROPERTIES TO SPECULATORS

 


 

Many of the assets acquired by the S&L regulators was in the form of mortgages or other documents indicating that large sums of monies were owed to the S&Ls (and now to the American taxpayer). Some effort was made by the S&L regulatory agencies to recover some of this money, but the more aggressive lawyers and investigators involved in the recovery effort were somehow laid off or transferred to other jobs during the last year of the Bush Administration. Again the Mainstream Media yawned and looked the other way. There was one article in the Washington Post on Senate Hearings into this in August 1992, and then silence.

Another policy adopted by the S&L regulatory agencies during the Bush Administration was a policy of the FORGIVENESS OF LOANS. This came to light for a day or two in October 1990 when Jeb Bush and his real estate partner were able to pay off a $4.65 million dollar mortgage for $505,000 (see below). It is indeed possible the money to pay off the mortgage came from the original $4.65 million dollar loan. Again, perhaps it was legal, but it was never examined by the Mainstream Media and continued to raise questions to this day. How many other well-connected people in this country were able to pay off their loans to defunct S&Ls for pennies on the dollar? We do not know. The Mainstream Media thought this kind of information was not necessary for the people of this country to know. I would like to put together a list of the names of those persons whose loans were FORGIVEN by the S&L regulatory agencies.

If I can get some names and dollar amounts, they will be added to the single name of Jeb Bush in

LIST #4 - THE FORGIVENESS OF LOANS BY THE REAGAN-BUSH S&L REGULATORY AGENCIES.

 


 

Unless the readers of these pages can think of other lists that could be used to inform the American people of the GREAT S&L ROBBERY, the remainder of the Web pages in the S&L section will be devoted to specific cases on which there is some documentation.

I have selected the following S&Ls and a National Bank in Washington, D.C. for study because of failure of the Mainstream Media to report on stories pertaining to their looting and because they are linked to prominent politicians, past or present.


Broward Savings and Loan in Florida

This should be sub-titled "How Jeb Bush and his real estate partner were able to purchase an $9 million office building in Florida on money that probably came out of the pockets of the American taxpayer." Perhaps there is more to the story than I have been able to uncover, but for some reason the Mainstream Media had absolutely no curiosity about this story and gave it VERY LIMITED coverage (one story in the New York Times, one in the Washington Post). Both of these stories referred to a new Resolution Trust Corporation policy of the FORGIVENESS OF LOANS. Evidently if you were well-connected politically and you had borrowed millions of dollars from Savings and Loans that later failed, the RTC would let you off the hook for pennies on the dollar. It was excellent way to obtain property and have the American taxpayer pay for it.


 

Sunrise Savings and Loan, Boynton Beach, Florida

During the Federal trial of the officers and employees of $1.5 billion dollar Sunrise Savings and Loan in 1989 one witness, Ronald Berkovitz, claimed that then Vice-President George Bush had told a senior S&L regulatory examiner to back off from an examination of the S&L in 1984. In his testimony, Berkovitz claimed that Bush did this in front of Robert Jacoby, the Sunrise CEO, who had gone to Bush to complain "that federal examiners were being too tough on Sunrise." Less than a year later, in July 1985, Sunrise crashed at a cost to the American taxpayers of $680 million dollars. The Berkovitz testimony was later confirmed by another official close to Sunrise. The Reagan-appointed Federal Attorney for that area of Florida made no effort to indict Berkovitz for perjury, or to question other officers and employees of Sunrise Savings and Loan about the matter.

Peter Brewton, who wrote one of the best books on the Savings and Loan Scam, had to learn of the Berkovitz testimony from an obscure legal journal in the Miami area. Although the trial was covered by the Miami Herald, a Knight-Ridder newspaper, I could find nothing in the archival pulls of the Miami Herald that even touched upon this testimony. There is one quote from the Herald, published after the conviction of Jacoby and another Sunrise executive that sums up the matter nicely. "In the end, it wasn't incompetence, a poor economy or crummy luck that killed Sunrise Savings. It was criminal activity." The Miami Heral. Nov 6, 1989.


Lincoln Savings and Loan in California - Part Two

We all know of the first part of the story of Charles Keating and the infamous Keating Five: Senators McCain and DeConcini of Arizona, Glenn of Ohio, Cranston of California, and Riegle of Michigan.

For some reason, the Mainstream Media did not cover the second part. This consisted of a meeting between the members of the San Francisco FHLBB and the senators in early 1987 when the FHLBB people evidently convinced four of the five senators that Keating was engaged in a number of criminal acts. (see the Lincoln page). The Senators were not heard of after this, and some returned their contribution. But somehow the Mainstream Media hung a maverick Republican and four Democratic senators out to dry as the Keating Five. The Keating Five and the Keating Five alone were held responsible by the Mainstream Media for all of the crimes of Charles Keating. If you read the Lincoln Savings and Loan Timeline pages, a completely different story emerges.

The San Francisco FHLBB sent a criminal referral to the Reagan Justice Department on April 9, 1987 and in May 1987, recommended that Lincoln be seized at once. After Ed Gray is forced out of the FHLBB in Washington, Reagan appoints M. Danny Wall to the post. Shortly after this, and for the first time in U.S. regulatory history, a regulatory case under investigation at a regional level is transferred from the jurisdiction of the field office to the jurisdiction of the Washington FHLBB headed by M.Danny Wall. Evidently the Republican Mr. Wall was attempting to help out the Republican national committeeman from Arizona, one each Charles Keating. Besides, Wall, who wrote much of the S&L deregulation bill while he was on the staff of the senior Republican senator from Utah, Jack Garn, did not want to discourage free enterprise in the savings and loan industry.

The transfer of the Lincoln investigation to Washington occurred sometime in late 1987 or early 1988. The movement of the investigation on Lincoln to Washington delayed the closure of Lincoln until February 1989. This gave Keating time to issue well over $250,000,000 in junk bonds to gullible investors in southern California. Some of the proceeds from the sale of the junk bonds evidently were used to make a $100,000 campaign contribution to the Bush presidential campaign in 1988. (The junk bond sales was the only source of income for Keating at this time.)


A Partial Bibliography of the books on the S&L Scam

Trust Me: Charles Keating and the Missing Billions by Micharel Binstein and Charles Bowden - NY:Random House, 1993

Silverado: Neil Bush and the Savings and Loan Scandal by Steven Wilmsen-Washington: National Press Books, 1991

Overdrawn: The Bailout of American Savings by Michael A. Robinson - NY Dutton, 1992

The Mafia, CIA, and George Bush by Pete Brewton - NY SPI, 1992

Inside Job: the Looting of America's Savings and Loans by Stephen Pizzo, Mary Fricker, and Paul Muolo, McGraw Hill, 1989, Harper, 1991


Other stories that will be published in these pages:

Silverado -in Colorado - How to invest in the oil exploration company of a president's son, and make a fortune from an S&L.

Madison Guaranty in Arkansas. - About the only person who made any money out of Madison is Sheffield Nelson, the Republican National Committeeman from Arkansas since 1990 and the Republican candidate for governor in 1990 and 1994.

Palmer National Bank. How a Republican bank in Washington D.C. got its original capital investment.


Any information you care to provide on the Crime of the Century should go to my E-mail address franklin@netmagic.net.


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