Neil Bush Defends Role on S&L; Board, Terms Allegations ‘Frivolous’

Neil Bush, the President’s son, today defended his actions as a director of a failed Denver savings and loan and called “frivolous” allegations that he has violated federal thrift regulations.

Bush defended his vote to approve $106 million in loans to two business associates, Colorado developers Bill Walters and Ken Good, who eventually defaulted on the loans. A bank controlled by Walters had extended a $1-million line of credit to Bush’s oil company, JNB Exploration.

“There was no conflict of interest,” Bush said. “I had no financial interest or otherwise in Walters’ business.”

Good’s company joined with Bush in a bid for an oil project in Argentina and needed the letter of credit to show that financing was possible. Because the bid failed, the line of credit was never needed or used.

Bush said Silverado’s board voted unanimously to approve the loans to Walters, whom he described as “the Donald Trump of Denver.”

In January, the Office of Thrift Supervision filed an administrative complaint against Bush accusing him of violating thrift regulations. The OTS is seeking a cease-and-desist order against Bush, under which he would agree not to violate thrift rules in the future. OTS officials have declined to identify the rules they alleged Bush violated.

Bush, called the OTS action “frivolous,” and said he is “baffled” by the agency’s pursuit of him.

Bush also testified that he was unaware of a July 15, 1985, letter from Michael Wise, Silverado’s former chairman, to Silverado’s preferred stockholders that said Bush had agreed to abstain from any board considerations involving Walters and Good.

“I would not have voted on any matters had I made an agreement not to do so,” he said, adding that he did abstain on all matters involving Good because he had an active financial interest in JNB Exploration.

Bush said Silverado’s management sought his presence on the thrift’s board for his expertise in the oil and gas industry, vital to Denver’s economy, rather than because his father was then vice president.

“They never asked me to use my influence,” he said. “Before I joined the board I told Wise, I made it clear that if he wanted me on the board for political reasons, he could forget it,” Bush said.

Wise and four of the thrift’s other top executives and directors, have refused to appear before the panel and will be subpoenaed.

Bush, 34, appeared relaxed as the hearing began, joking with a battery of photographers and waving to members of the House banking committee.

At one point, Bush joked with the panel, saying: “I’m here voluntarily. I tried to make a deal with my mother where she’d come here and I’d go to Wellesley. Only kidding.”

The committee is investigating the collapse of Silverado Banking, Savings and Loan Assn. of Denver. Bush, who lives in Denver, joined the thrift’s board in 1985.

He left four months before government regulators took over Silverado in December, 1988.