Columbia S&L; Chief Spiegel Out at Year End

Columbia Savings & Loan Assn. chief Thomas Spiegel said today he would quit as chairman and chief executive on Dec. 31, blaming the collapsing junk bond market that has sent the Beverly Hills-based thrift reeling.

Under the leadership of Spiegel, a former Wall Street trader, Columbia had invested more heavily than any other thrift in junk bonds, and turned big profits on them until recently. Its assets zoomed from $400 million in 1974 to more than $13 billion this year.

He said he would become a consultant to Columbia, devoting all his time to creating a subsidiary into which the high-yield, high-risk securities can be spun off, and allowing a new leader to recreate Columbia as a more traditional lender.

Under new laws, thrifts can invest in junk bonds only through separately capitalized affiliates rather than using government-insured deposits.

Columbia also said that because of problems with those investments, it will be unable to meet the tougher requirements for risk-based capital contained in the thrift bailout bill signed in August by President Bush.

Spiegel, who was paid $5.6 million in 1987 and $4.1 million last year, said the soured junk-bond market made his full-time attention to creating the new subsidiary a matter of urgency.

Columbia said it already had begun interviewing potential successors.

Spiegel, a friend of junk bond wizard Michael Milken, angered federal thrift regulators for years by amassing Columbia’s huge portfolio of junk bonds. He also is known for his close ties to political figures, and set up the junk bond investment for former House Majority Whip Tony Coelho that forced the Democrat to resign last May.