Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, July 10, 1990 TAG: 9007100090
SECTION: BUSINESS PAGE: A3 EDITION: STATE
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The insurance executive, James M. Fail of Phoenix, borrowed $70 million while putting up $1,000 of his own in December 1988 to acquire 15 thrifts that now operate as the Dallas-based Bluebonnet Savings Bank.
The reconstituted thrift was the nation's most profitable large S&L last year, Sen. Howard M. Metzenbaum, D-Ohio, said.
Robert Roe, a former official of the Federal Savings and Loan Insurance Corp. who helped negotiate the Bluebonnet deal, told Metzenbaum's subcommittee on antitrust, monopolies and business rights that Robert J. Thompson, once congressional liaison to Bush when he was vice president, had represented Fail in the matter.
However, Fail, Thompson and M. Danny Wall, the former chairman of the Federal Home Loan Bank Board, which oversaw the FSLIC, all declined to testify before the panel.
Metzenbaum, the only subcommittee member present during a four-hour session Monday, said he would push the panel to subpoena the three and others within the week.
"They have failed to show up until this point. We intend to get them here. They owe the public an explanation," he said.
"The U.S. taxpayer, compliments of the dealmakers at [the FSLIC] send Mr. Fail a check for what amounts to $23 million every month," Metzenbaum said.
Fail now owns "a worry-free financial institution that doesn't have to compete with other savings and loans in order to make a profit," the senator said.
Fail's attorney, Stanley M. Brand, in a statement released after the hearing, challenged the jurisdiction of the Metzenbaum panel to look into S&L matters. He said it was misleading to say Fail had bought Bluebonnet for only $1,000 because he had pledged his holdings as collateral for the $70 million in loans.
"It is not difficult to conclude that today's hearing was motivated by sheer political opportunism," Brand said.
by CNB