Brady Backs Neil Bush: ‘Can’t Imagine He Broke Law’ : Thrifts: The Treasury secretary notes that the President’s son was a director, but not an officer, of a failed savings and loan in Colorado.

Treasury Secretary Nicholas F. Brady Sunday defended Neil Bush, the President’s son who is under fire for his actions as a savings and loan director. “I can’t imagine that he broke the law,” Brady said.

Brady, in a television interview, noted that Bush was only a director of the failed Silverado Banking Savings & Loan Assn. in Colorado and that “there are thousands of directors all over this world who sit on boards and (their) management go ahead and do things.”

It was disclosed last Tuesday that the enforcement staff of the federal Office of Thrift Supervision had charged that Neil Bush had engaged in “personal dishonesty” while on the board of Silverado, one of the biggest failures among hundreds of S&L; insolvencies.

An OTS staff memo said that Bush had “willfully breached” his duty as a director by failing to inform his fellow board members that a major borrower at the S&L;, Kenneth M. Good, was going to pay $3 million for an 80% interest in Bush’s oil exploration company.

Appearing on ABC-TV’s “This Week with David Brinkley,” Brady, a close friend of the President, said he knew the younger Bush and could not believe the allegations. “I cannot imagine that he willfully did anything wrong,” he said. “. . . I just don’t see this as anything more than an issue that’s aimed at the President’s son.”

Atty. Gen. Dick Thornburgh, meanwhile, declined to disclose whether Bush is under investigation by his department, saying: “I can’t discuss any pending investigations.”

But Thornburgh, appearing on CBS-TV’s “Face the Nation,” brushed aside the question of whether the Justice Department should stand aside to permit an independent counsel to look at the matter. “We go where the evidence leads,” Thornburgh said. “And I don’t mean to suggest that any particular individual is the subject of investigation, but wherever there’s evidence of wrongdoing, we’ll pursue it.”

Brady, asked whether Neil Bush would be investigated as strongly as anyone else against whom allegations had been leveled, said: “I would think so. When they fault him, one individual, up before the House Banking Committee--there are a lot of people who were directors. This man wasn’t even in the savings and loan business.

“He was a director. If every director of a savings and loan and bank was brought before Congress for something that bank did, we wouldn’t have time to do anything else,” Brady said.

Bush has strongly denied any wrongdoing in connection with his 1985-1988 tenure as a Silverado director. He is challenging in an administrative proceeding the government’s allegations that he violated thrift rules.

The OTS staff found that at about the same time that Good was buying control of Bush’s firm, JNB, the board of Silverado agreed to forgive $11 million in loans and obligations to the institution that Good said he could not repay.

Bush abstained from voting on Silverado’s loans to Good, but the OTS document said he did not disclose his business relations with Good as required by federal regulations affecting thrift directors.

Good and another investor in Bush’s firm, William L. Walters, ultimately defaulted on more than $130 million in loans at Denver-based Silverado. The cleanup of the institution, which was seized by federal regulators last December, could cost taxpayers as much as $1 billion.

In May, Bush told the House Banking Committee that Good had loaned him $100,000 “that was never meant to be repaid” if a speculative commodities scheme in which it was invested failed to show profits. Good invested the money for Bush in 1984, a year before Bush joined the Silverado board.

The investment later went sour, and Good formally canceled the loan in January.

“It sounds a little fishy,” Bush told the House panel in attempting to explain why he never mentioned the loan on a conflict-of-interest form required of directors.

Bush told the House committee that he never had any conflicts of interest while serving on Silverado’s board, as regulators have charged in an administrative complaint.

He described the complaints as “frivolous. The fact they’re being pursued is baffling to me.”