No Crime Linked to Neil Bush, Thornburgh Says : S&Ls;: He leaves open the possibility of an independent counsel to see if regulators have missed criminal behavior in the thrift scandal.

Atty. Gen. Dick Thornburgh said Sunday that he is unaware of any criminal wrongdoing by Neil Bush, the President’s son, in the collapse of a Denver savings and loan.

Although federal regulators have charged Bush with civil violations of banking regulations in his role as a director of the thrift, they have not asked the Justice Department to investigate possible criminal misconduct, Thornburgh said in a television interview.

Until now, regulators had refused to say whether Bush was among five cases referred to the Justice Department since 1986 for potential criminal prosecution in the failure of Silverado Banking, Savings & Loan Assn.

Bush’s involvement in the savings and loan debacle has exploded into a major election-year controversy. Democrats are seeking to use it to tie the Bush Administration more closely to the scandal. Republicans, meanwhile, are suggesting that the Democratic-controlled Congress is primarily responsible for causing the mess.

Federal regulators have accused Bush of failing to disclose his business ties with two developers who were big borrowers at Silverado and eventually defaulted on $106 million in loans. Bush has denied any wrongdoing in Silverado’s collapse, which will cost taxpayers an estimated $1 billion.

Thornburgh, appearing on ABC-TV’s “This Week with David Brinkley,” noted that conflict-of-interest charges filed against Bush by the Office of Thrift Supervision involved civil liability or failure to comply with regulatory requirements.

“I’m not aware of any evidence or any allegation from a credible source that Neil Bush has participated in any criminal activity,” the attorney general said.

Thornburgh left open the possibility of seeking the appointment of an independent counsel to determine if thrift regulators have overlooked criminal behavior.

Generally, Thornburgh said, he cannot ask the court for such an appointment unless “a credible source,” such as a regulatory agency or a congressional group, formally alleges a crime. However, he added, he can seek an independent counsel on his own if he believes that he has a “political conflict of interest” in the matter.

“We will address both those questions at the proper time,” he said.

Rep. Patricia Schroeder (D-Colo.) is trying to round up the required number of signatures on a letter to Thornburgh requesting the appointment of an independent counsel to investigate the President’s son. She sent such a letter Friday, alleging bank fraud and a number of other crimes by Bush, but one of the signers--Rep. Edward F. Feighan (D-Ohio)--withdrew his name.

That left Schroeder one short of the number she needs for a valid request. Under a 1978 law, Congress can force the Justice Department to take a preliminary, 90-day look at the need for an independent counsel if a majority of either the Democratic or Republican members of the House or Senate Judiciary committees sign a letter. For Schroeder, the magic number is 12.

Feighan did not give a reason for withdrawing his signature. There were reports that he was pressured by House Democratic leaders who are wary of Republican retaliation against Democratic legislators who have accepted political contributions from thrift executives and in some cases intervened with regulators.

Such reports of pressure are incorrect, said an aide to House Speaker Thomas S. Foley (D-Wash.).

Schroeder, appearing with House Republican Whip Newt Gingrich (R-Ga.) on CBS-TV’s “Face the Nation,” said that she would hate to think Republicans are trying to cut a deal with Democrats to drop demands for special prosecutors, “putting bipartisan perfume over the stench.”

The comment set off Gingrich, who sought to tie Democrats to the savings and loan scandals in a heated attack that was probably a forerunner of nasty exchanges in many congressional campaigns this year.

Gingrich noted that “an extraordinarily powerful man,” Senate Democratic Whip Alan Cranston of California, solicited $800,000 in contributions from Charles H. Keating Jr., owner of failed Lincoln Savings & Loan of Irvine, and intervened with regulators on Keating’s behalf.

“Do you think he ought to have a special independent counsel?” Gingrich asked.

“Newt,” Schroeder said, “I honestly believe there doesn’t appear to be a conflict of interest between a Republican attorney general investigating Democratic senators. Now, if Thornburgh doesn’t have the guts to do that, then yes, there should be one.”

Cranston and four other senators who received donations from Keating--Dennis DeConcini (D-Ariz.), Donald W. Riegle Jr. (D-Mich.), John Glenn (D-Ohio) and John McCain (R-Ariz.)--are being investigated by the Senate Ethics Committee.

In a related development, two top regulators served up a gloomy warning Sunday for already-struggling thrifts and banks in the event of a serious economic downturn.

David Cooke, executive director of the new agency that is seizing failed thrifts and selling off assets, declared that another 200 institutions could fail in a recession, costing taxpayers another $200 billion in depositor bail-out costs--more than doubling the cost of the crisis.

Cooke, head of the Resolution Trust Corp., also spoke on the Brinkley program.

L. William Seidman, chairman of the Federal Deposit Insurance Corp., said on “Face the Nation” that “a long and deep recession” would create a crisis in the banking industry similar to the current S&L; debacle.

Seidman said that the bank deposit insurance fund is at an all-time low, with a balance of only $12 billion. “We can handle anything we can foresee right now,” he said. “But if things come along, major failures that we’re not able to foresee at this time, that would be another story.”