The Real S&L Scandal How Bush's Pals Broke the Banks

The Real S&L Scandal

How Bush's Pals Broke the Banks

by Jonathan Kwitny

Village Voice, October 20, 1992, pp. 24 ff.

There's a lot that Americans haven't been told about George Bush and the savings-and-loan catastrophe--mainly that Bush's friends, his son Neil, and their social circle caused a major portion of the damage, and that the president, by his continued loyalty to these people, bears some responsibility himself.

In Houston and Denver, the president, his son, and White House chief of staff James Baker were surrounded socially and financially by the biggest feeders at the national taxpayers' trough.  A repeated pattern appears in which investigations were called off, proposed fraud charges weren't brought, and President Bush continued to pal around with investigative targets who got off scot-free. . . .

Hundreds of millions of dollars in questionable loans ended up enriching the friends of George Bush, the CIA, and favorite Republican causes, among them the contras, and Jonas Savimbi's war in Angola.

Bush's current campaign manager, Fred Malek, was a partner of a big S&L defaulter in a bank they founded with the help of Mafia-tainted money.

Robert Clarke, a friend of George Bush and Jim Baker, and the man they named as U.S. comptroller of the currency, helped organize a bank that laundered S&L money into an overseas account; he also was a shareholder in a bank the government found to be under the "influence or control" of a Mob figure.

Of the five biggest S&L defaulters ($200 million each), four have connections to George Bush's longtime friend Walter Mischer (also a friend of Chief of Staff Jim Baker), or to Neil Bush's friend and mentor, Bill Walters.

Bush's friend and former Houston landlord, Joe Russo, defaulted on loans totaling tens of millions of dollars from five failed S&Ls, and his own bank went bust at taxpayers' expense.  Texas examiners filed two criminal referrals with the Justice Department, which took no action. . . .

Bush visited with the Denver man who set up Neil Bush and business, and who would later take huge loans from Silverado that he never repaid. . . . 

(Background on author Jonathan Kwitny, from his November 28, 1998 obituary:

Jonathan Kwitny, an award-winning journalist whose career spanned more than 30 years on three continents, died Thursday at the age of 57 from cancer.  Best known for his 17 years of investigative reporting at the Wall Street Journal and for his critically acclaimed national television news program, "The Kwitny Report," which aired on PBS, he also authored eight
books. The latest one, "Man of the Century," was a 750-page biography of Pope
John Paul II published last fall.)