86 embarrassing, and it did not dare investigate it? Or that it simply did not bother to investigate hard savings and loan cases? When it comes to investigating savings and loan cases, the tice Department is less inquisitive than Kermit the Frog, softer than Big Bird. Mr. Chairman, no savings and loan investigation by this commi tee will be complete until the Attorney General appears as a w ness. We must find out why the Justice Department is so relucta to investigate savings and loan cases. The taxpayers have a bak trillion reasons to want an answer to the question: When are the savings and loan crooks going to jail? This is what the people an asking. The CHAIRMAN. The chairman will observe that despite the esteem that I have for our ranking minority member, that yest day's request was not-Mr. Kanjorski, if I recall correctly, he asking for the data, which time referrals had been made to the Ja tice Department. In the beginning, he was merely asking for the data of referrals, which of course the witnesses before us had in way indicated that it, with respect to the matter on hand, was sequent to the time that the agency had closed down the institu tion or after they had had their examinations. Subsequent to that, the chief counsel explained that when the year 1986 was used from 1986 until now, that what they had mind were that they had knowledge that referrals had been made to the Justice Department, not necessarily having to do with the case, but with all cases coming to their attention that, as regula tors evaluating information, decided that there were matters that should be referred to the Justice Department. I also pointed out that there was no way the witnesses could answer as to just what the Justice Department did or didn't do œ what the basis of the information had been. After all, it is well known that just because a case is referred to the Justice Depart ment, that does not mean that the Justice Department attorney find it actionable or that it has a sufficiency in legal standing ↳ prepare an adequate and successful case of prosecution. When we are talking about criminal referrals, we then have awe are entering a different area, and when the question arose as the difference between the civil suits which had been filed in a car of some entities and criminal prosecution, there is no question about it, there is a duty imposed on the Justice Department as wel as the executive branch to-pending judicial determinationprotect and safeguard the integrity of their proceedings. So, I want to clarify the fact that just because it was reported here yesterday, that cases had been referred since 1986, that do not mean that those cases had anything to do with this particul case of Silverado. As to the prosecution on the part of the Justice Department they have their track record. And they will have to be asked they will be by Judiciary. We will ask the Attorney General, said yesterday, to report to us on the basis of the testimony heard from the FBI Director in Dallas in April. That had to with the fact that the FBI Director had asked the number of ages that he felt would be adequate, and those requests were not bor ored by the Justice Department. SILVERADO BANKING, SAVINGS AND LOAN ASSOCIATION HEARINGS BEFORE THE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS HOUSE OF REPRESENTATIVES ONE HUNDRED FIRST Congress SECOND SESSION PART 1 MAY 22 and 23, 1990 Printed for the use of the Committee on Banking, Finance and Urban Affairs Serial No. 101-124 US GOVERNMENT PRINTING OFFICE WABIDIOTON : 1990 For sale by the Superintendent of Documents. Congressonal Sales Office 2664 Hearings held on: Appendixes: May 22, 1990. May 23, 1990. CONTENTS WITNESSES TURDAY, MAY 22, 1990 Creager, Robert E., partner, Coopers & Lybrand Hershkowitz, Stephen P., deputy director of Enforcement, Office of Thrift McCormally, Brian C., district counsel, Office of Thrift Supervision. Topeka. Sandefur. Terry, assistant deputy district director, Supervision. Office of Van Cleave, Dorothy, assistant deputy district director, Examinations, Office Weinstein, Harris, chief counsel. Office of Thrift Supervision. Wullschleger, Herb, partner, Ernst & Young.. Prepared statements: APPENDIX Annunzio, Hon. Frank......................................................... Creager, Robert E... Gonzales, Hon. Henry B................................................................................................................ Wullschleger, Herbert L Additional Material Submitted for the Record Anonymous letter dated October 25, 1988, to M. Danny Wall and Kermit Office of Thrift Supervision: Background information for Silverado hearings provided by minority staff .... 187 202 Joint statement of Stephen P. Hershkowitz, Brian C. McCormally, Terry 274 Silverado Banking, Savings and Loan Association: News Releases dated January 10, 11, 19, 23 and 26, 1990. 192 Examination History from January 1980 to December 1988. 172 Holding Company Loan charts. Index of Key Supervisory Actions.. Loan Pool chart. Overview. Quid Pro Que Program charts. Supervisory Chronology. Silverado Hypergrowth chart 164 173 168 155 166 175 162 Silverado Banking. Savings and Loan Association-Continued Silverado Self-Funding Capital Transactions Information provided by OTS on Silverado's transactions with Bill L. Walters Memorandum dated January 18. 1990, from OTS enforcement and the Topeka District Office to the ERC regarding recommendation for action in respect of Neil M. Bush Memorandum dated February 17, 1988, from Jack Grace and Dennis Lacey, Questions for Mr. Paul submitted by Hon. Bunning Supplemental submission, charts prepared by Office of Thrift Supervision. WITNESSES WEDNESDAY, MAY 23, 1990 Bunchman, Richard J., former director, Silverado Banking Prepared statements: Annunzio, Hon. Frank... APPENDIX ADDITIONAL Material SubmiTTED FOR THE RECORD Correspondence with witnesses 202 Excerpt from GAO Report on Thrift Failures; Officers and Directors Breached 622 Internal memorandum dated February 23, 1987, regarding significant loans declined by Silverado banking, submitted by Hon. Parris. 569 Letter dated November 5, 1986, from Neil M. Bush to Michael Wise regarding a $900,000 line of credit for Good International 629 Office of Thrift Supervision Manual: Director Information Guidelines. 571 Subpoena resolution 550 Wise, Michael, memorandum and letter dated July 15, 1985 regarding Neil M 567 WASHINGTON, D.C., Jan. 10 - Two former officers and directors !! Silverado Banking, Savings and Loan Association, Denver, Colo., have agreed to OTS consent orders, without admitting any wrongdoing, that prohibit them from working for federally insured financial institutions without prior approval of the appropriate regulatory agency. The office of Thrift Supervision reached the settlement vita Richard E. Vandapoel, former board vice chairman and chief operatim officer of silverade, and Robert M. Lavis, former board vice chairmas and chief financial officer. The thrift vas placed into receiversal, in December 1988. While an OTS investigation was still under vay, Lewis and Vandspool consented to the issuance of the order without admitting any wrongdoing. Federal examiners had expressed grave concerns over the soundne of Silverado's management in the months before its closing, OTS 2016 |