BUSH-SAVINGS & LOAN
The Bush family and the S&L
Scandal
Neil, George Jr., George Sr., and
Jeb Bush
The Savings and Loan industry had
been experiencing major problems through the late 60s and 70s due to rising
inflation and rising interest rates. Because of this there was a move in
the 1970s to replace the role of S&L institutions with banks.
In the early 1980s, under Reagan,
regulatory changes took place that gave the S&L industry new powers and for
the first time in history measures were taken to increase the profitability of
S&Ls at the expense of promoting home ownership.
A history of the S&L
situation can be found here:
http://www.fdic.gov/bank/historical/s&l/
What is important to note about
the S&L scandal is that it was the largest theft in the history of the world
and
The problems occurred in the
Savings and Loan industry as they relate to theft because the industry was
deregulated under the Reagan/Bush administration and restrictions were eased on
the industry so much that abuse and misuse of funds became easy, rampant, and
went unchecked.
Additional facts on the Savings
and Loan Scandal can be found here:
http://www.inthe80s.com/sandl.shtml
There are several ways in which
the Bush family plays into the Savings and Loan scandal, which involves not only
many members of the Bush family but also many other politicians that are still
in office and still part of the Bush Jr. administration today. Jeb Bush,
George Bush Sr., and his son Neil Bush have all been implicated in the Savings
and Loan Scandal, which cost American tax payers over $1.4 TRILLION
dollars (note that this is about one quarter of our national debt).
Between 1981 and 1989, when
George Bush finally announced that there was a Savings and Loan Crisis to the
world, the Reagan/Bush administration worked to cover up Savings and Loan
problems by reducing the number and depth of examinations required of S&Ls
as well as attacking political opponents who were sounding early alarms about
the S&L industry. Industry insiders were aware of significant S&L
problems as early 1986 that they felt would require a bailout. This
information was kept from the media until after Bush had won the 1988 elections.
Jeb Bush defaulted on a $4.56
million loan from Broward Federal Savings in
Neil Bush was the most widely
targeted member of the Bush family by the press in the S&L scandal.
Neil became director of Silverado Savings and Loan at the age of 30 in 1985.
Three years later the institution was belly up at a cost of $1.6 billion to tax
payers to bail out.
The basic actions of Neil Bush in
the S&L scandal are as follows:
Neil received a $100,000
"loan" from Ken Good, of Good International, with no obligation to pay
any of the money back.
Good was a large shareholder in
JNB Explorations, Neil Bush's oil-exploration company.
Neil failed to disclose this
conflict-of-interest when loans were given to Good from Silverado, because the
money was to be used in joint venture with his own JNB. This was in
essence giving himself a loan from Silverado through a third party.
Neil then helped Silverado
S&L approve Good International for a $900,000 line of credit.
Good defaulted on a total $32
million in loans from Silverado.
During this time Neil Bush did
not disclose that $3 million of the $32 million that Good was defaulting on was
actually for investment in JNB, his own company.
Good subsequently raised Bush's
JNB salary from $75,000 to $125,000 and granted him a $22,500 bonus.
Neil Bush maintained that he did
not see how this constituted a conflict of interest.
Neil approved $106 million in
Silverado loans to another JNB investor, Bill Walters.
Neil also never formally
disclosed his relationship with Walters and Walters also defaulted on his loans,
all $106 million of them.
Neil Bush was charged with
criminal wrongdoing in the case and ended up paying $50,000 to settle out of
court. The chief of Silverado S&L was sentenced to 3.5 years in jail
for pleading guilty to $8.7 million in theft. (Keep in mind that you can get
more jail time for holding up a gas station for $50.)
Today Neil Bush is working on
closing a deal in
Update 11/28/2003:
Some of Neil Bush's business deals have been exposed in his recent divorce case.
For more on this see:
http://www.truthout.org/docs_03/112703A.shtml
http://www.salon.com/news/wire/2004/01/26/neil_bush/index.html
It should also be noted that
shortly after news of Neil Bush’s involvement in the S&L scandal hit the
press his father, George Bush Sr., announced the Desert Storm campaign in
The S&L scandal is by no
means the only incident of questionable, and actually illegal, financial
activity that the Bush family has been involved in. The line of questionable,
illegal, and unethical businesses practices goes back at least to Prescott Bush
Sr., George Bush Sr.’s father. Prescott Bush was a Senator from 1952 –
1963. Previous to his time as a Senator Prescott was a banker and
businessman. Prior to the American entry into WWII Prescott Bush was
director of Union Banking Corporation. Union Banking Corporation helped to
finance Hitler’s regime. The Concentration Camps of Nazi Germany were
labor camps that the Nazis used to make products for their regime as well as for
sale to raise money.
In 1942, after Hitler declared
war on
For more on Prescott Bush's ties
to the Nazis see:
http://www.guardian.co.uk/usa/story/0,12271,1312540,00.html
http://www.nhgazette.com/cgi-bin/NHGstore.cgi?user_action=detail&catalogno=NN_Bush_Nazi_2
The issues of WWII will be
revisited again later.
This is actually just the tip of
the iceberg as far as the Bush family and business dealings are concerned, the
topic is a book in itself. In the interest of brevity I invite you to
research the Bush family business ties yourself, including those in
http://www.realchange.org/bushjr.htm#rangers
For information on Prescott Bush
Jr.'s economic ties to
http://www.usatoday.com/news/washington/2002/02/19/usat-prescott-bush.htm