Suit Against Son in Hands of Regulator Bush Dislikes

If President Bush’s son Neil is sued by the federal government over his involvement in the collapse of a Denver savings and loan, his fate could be in the hands of a government regulator who has often clashed with the President.

Government officials confirmed today that a $200-million federal lawsuit may be brought against Bush and eight other former members of the board of Silverado Banking, Savings & Loan Assn., which collapsed in 1988 at a cost to taxpayers of about $1 billion.

The suit would accuse the nine board members of negligence in the failure of the Colorado thrift and could be one of the biggest ever brought by the Federal Deposit Insurance Corp.

“The matter is still under consideration, but it’s not uncommon to bring these kinds of suits after an institution fails,” said FDIC spokesman Alan Whitney.

The decision on whether to file the suit--which could be a huge political embarrassment for the President--lies with FDIC Chairman L. William Seidman. President Bush has made it clear that he does not care for Seidman and has strongly hinted that he would like him to leave, although he has no power to remove him before his term expires in October.

“Seidman has not decided when he will make that decision,” Whitney said of possible legal action, adding that any suit would likely be filed in Denver federal court and could be a lengthy operation.

When asked if regulators were unfairly focusing on 34-year-old Neil Bush because of his high-profile father, Whitney said, “I can assure you that’s not true.”

The collapse of Silverado is just one of hundreds in the S & L industry, whose bailout is expected to cost taxpayers $300 billion over the next 30 years.

Whitney would not confirm press reports that the civil suit would seek $200 million in damages but said if that is the price tag, it would be one of the FDIC’s largest.

Clashes between Seidman--who is well-regarded in Congress and the banking industry--and the Administration have prompted unusual efforts by the President to oust the regulator from his increasingly important post, banking sources say.

But Whitney denied there is tension between the two: “That is flatly untrue. They have a very good relationship.”