An angry, embattled Neil Bush on Monday defended his conduct as a director of a failed Denver savings and loan as well as his acceptance of what he conceded was "an incredibly sweet deal" in the form of a $100,000 loan from a Denver investor that he did not have to repay.
President Bush's 35-year-old son, who faces a disciplinary hearing this fall before federal thrift regulators, decided this weekend to launch a one-man public relations campaign in connection with his role as a director of the defunct Silverado Savings & Loan, whose collapse is expected to cost taxpayers about $1 billion. He issued a combative eight-page response to the charges against him and began inviting reporters to his spartan office here to hear his version of the events that have made him a figure in the largest financial scandal in U.S. history.
Chewing gum and digging through stacks of papers on the office floor, Bush acknowledged in an interview Monday that he got "an incredibly sweet deal" in 1984 when Denver investor Kenneth Good lent him $100,000 and then forgave the debt. Bush also revealed that he has decided to report that 6-year-old payment as income on his 1990 tax return.
But that loan, Bush insisted, was "totally unrelated" to his work as a director of Silverado.
Other charges against him, Bush complained, stem from political "opportunism" and "press sensationalism."
In January, the federal Office of Thrift Supervision proposed a decree banning Neil Bush from the banking business because of his actions as a director of the bankrupt thrift. He refused to accede, despite pressure from White House aides urging him to put a quick end to the embarrassing case. He is now battling a reduced charge brought by the same agency.
Describing himself as "stubborn," Bush said Monday that "it would have been much easier to sign it (the decree), move on in terms of just the quality of my life." Since then, he said, "This negative publicity has just, you know, taken over, dominated my life for six months." In addition, Bush noted, his position in the S&L; investigation may help Democrats turn the scandal to their political advantage.
Still, Bush said he decided to fight "because I know I haven't done anything wrong." The regulators have scheduled a public hearing for September, alleging that Bush violated conflict-of-interest rules by voting to approve Silverado loans to individuals with whom he had a business relationship.
After keeping his own counsel for months, he has now decided to take his case to the public. "I've been kind of like a little caged-in animal in an unsanitary zoo," the President's son said. "Now my cage is open and I'm telling people . . . what my side of the story is. And I feel good about it.
"I know I'm a better person for it," the slender, sandy-haired Bush went on. "I am stronger. . . . I'm eating better, drinking fruit juice. I feel like I'm warming for a fight."
The eight-page document that Bush issued argues that the current disciplinary proceeding against him "is unprecedented." In the document, he noted that thrift regulators have not previously pursued such charges against a person who is no longer involved in banking. Bush quit the Silverado board in the summer of 1988.
Bush's response also challenges the regulators' contention that he violated regulations by voting to approve Silverado loans to Bill Walters, a Denver developer who had invested in Bush's oil company. Bush said there was no conflict of interest in his votes because other bank officials knew of his ties to Walters.
"I'm sure there was a disclosure made . . . that was looked at by legal counsel," Bush said. However, he did not mention his business connection with Walters on required conflict-of-interest forms, records show.
Bush's long response also discusses dealings between Silverado and Good, the investor who had forgiven a $100,000 loan to Bush a year before he joined the bank board. "Bush abstained from voting on this matter and all transactions relating to Ken Good," according to the written response.
Bank records show that Bush did not vote when Silverado's board approved loans to Good. But thrift regulators charge that Bush personally proposed to his fellow board members that they grant Good a $900,000 line of credit, which they did.
In another instance, regulators charge, Bush failed to tell the other directors that Good agreed to invest up to $3 million in Bush's oil company--even while Good told Silverado that he lacked the money to pay back his loans from the thrift.
Bush on Monday offered further explanation of the $100,000 payment he received from Good in 1984. Under the arrangement, Bush was not expected to repay the loan unless the invested money returned a profit. Bush said that Good offered such loans to several Denver business people to pay for commodity speculation. The investment "went bad," Bush said, so Good forgave the loans to all investors.
Another local businessman received a $350,000 payment from Good under the same circumstances, Bush noted. "But, of course, that won't be of any kind of interest," he added caustically, "because his name doesn't relate to somebody famous."