Thrift Officials Asking for Sanctions on Bush’s Son

Federal thrift officials said today they are seeking a cease-and-desist order against Neil Bush, one day after the President’s son rejected a settlement over his role as a director of a collapsed savings and loan.

Neil Bush’s actions as a director of Silverado Banking, Savings and Loan Assn. of Denver amounted to conflicts of interest, said the Enforcement Review Committee of the Office of Thrift Supervision in Washington, D.C.

The case will be heard by an administrative law judge. If the order is granted, the younger Bush would be barred from practices that could constitute a conflict of interest if he ever serves again with a federally insured financial institution.

Bush said Thursday that the Office of Thrift and Supervision had proposed the cease-and-desist order, but he had rejected it because it would imply that he had acted improperly.

“In my view, a settlement agreement would leave an implication that I misbehaved as a director of Silverado,” Bush said in a statement.

“As I have said in the past, I have nothing to hide and I have done nothing wrong,” he said. “Therefore, I have refused to consent to any agreement with the Office of Thrift Supervision and if they choose to bring action against me, I will fight the matter in court.”

Bush, 35, served as a director of Silverado from 1985 to August, 1988, resigning two weeks after his father won the GOP presidential nomination. He is the owner of an oil exploration firm in Denver.

The collapse of Silverado, now operating as part of Columbia Savings, the largest thrift in Colorado, is expected to cost taxpayers up to $1 billion to cover losses caused by Silverado’s risky investments in junk bonds and bad land deals.

Regulators have said that Silverado’s fall was partly due to the thrift management’s poor business judgment.

When the oil-dependent Denver economy slumped in the mid-1980s and land prices fell, most of the region’s thrifts tightened their belts and curbed their real estate lending. But Silverado plunged ahead and invested in speculative deals.

Earlier this month, three former executives of Silverado, including its former chairman, Michael Wise, agreed to be barred from holding future jobs in the thrift industry.