Key Silverado Figure Who Defaulted Lives in Luxury

Developer Bill L. Walters, who told a congressional committee in June that he was broke after defaulting on nearly $100 million in loans obtained from a Denver thrift with the help of Neil Bush, is now living in the lap of luxury in Newport Beach.

In February, a trust for Walters’ wife, Jacqueline, purchased a $1.9-million gated estate near Newport Bay, according to county records reviewed by The Times. State records also show his wife bought a mobile home on prime oceanfront property north of Laguna Beach for $250,000.

The Newport Beach home--with four bedrooms, three baths and a courtyard pool--contains richly finished furniture and lots of cut crystal. On Tuesday, two Mercedes-Benzes, registered in Jacqueline Walters’ name and bearing Colorado license plates, sat in the stone-lined driveway while gardeners--who said they charge the Walterses $800 a month--mowed the lawn.

Walters, 44, is a one-time business associate of Neil Bush, a son of President Bush. The activities of Neil Bush, Walters and Kenneth Good, another Bush business partner, have become the focal point of federal investigations into the failure of Silverado Banking, Savings & Loan Assn. in Denver.

Under growing public pressure, federal investigators have been intensifying their probes of thrift failures that could ultimately cost taxpayers more than $500 billion. The high living of insiders and others involved in the failures is drawing growing scrutiny.

Several members of Congress on Tuesday expressed outrage at word of Walters’ luxurious living.

“The government should immediately take action to file claims against all of Mr. Walters’ property so the taxpayers can get their money back,” said Rep. Frank Annunzio (D-Ill.), chairman of the House Financial Institutions subcommittee.

Recent House hearings have focused on the failure of Silverado, where Bush was a director. The thrift was seized by regulators in December, 1988, and its failure is expected to cost taxpayers more than $1 billion.

Despite a business relationship with Walters, Bush voted to approve loans for him. The thrift’s collapse has been attributed, in part, to Walters’ default on $96 million in real estate loans from Silverado. The default is expected to cost taxpayers up to $50 million, after officials sell some of the buildings Walters’ company developed.

In the hearings before the House Banking Committee into Silverado’s failure last month, Walters was questioned about his financial condition.

“I have a negative net worth,” he testified.

He did not respond to several requests for an interview. In a brief discussion Monday at the Newport Beach residence, his wife said: “He owns nothing in Orange County.”

Documents filed with the Orange County recorder’s office indicate that the Newport Beach home was purchased by the Walters Trust I, of which Jacqueline is the beneficiary. The house was recently owned by financier Roger Luby, the former companion of John Wayne’s daughter Aissa.

The beachfront mobile home in the El Morro Beach Mobile Home Park--which carries with it a $650-a-month lease payment--is listed in Jacqueline’s name.

For several months earlier this year, the Walterses stayed in a suite at Orange County’s posh Four Seasons Hotel Newport Beach as their new residence was renovated. Hotel spokeswoman Linda Barragan said the lowest rate for double occupancy is $250 a night, though she said long-term stays are negotiated on an individual basis.

Annunzio said that the government ought to immediately file liens against the property, in an effort to recover some of the losses from the bad loans. “Here is clearly a man who has the assets,” he said. “Just when are the Justice Department and RTC (Resolution Trust Corp.) going to bring suit against these people to recover this stuff?”

Officials at the Justice Department and the RTC, the agency charged with cleaning up the thrift industry, declined comment.

“This is what happens when the Bush Administration doesn’t aggressively go after those who cause the savings and loan fraud. Bigwig developers and savings and loan executives think they can get away with anything,” said Rep. Bruce Vento (D-Minn.), chairman of the RTC Oversight Task Force, a special House panel overseeing the savings and loan bailout.

“It’s high time the Administration started taking tough action against those who are walking away from bad business deals and sticking the American taxpayers with the tab.”

Walters once ran one of Denver’s largest development firms, the Bill L. Walters Co. The company employed approximately 1,000 people and built 5 million square feet of office, retail and hotel structures and athletic clubs, but fell on hard times when Denver’s real estate market hit a slump.

Walters told the House committee that he was worth more than $100 million while he was in his 30s. Now, he says, he is nearly penniless.

In his testimony last month, Walters testified about his failed business deals and his relationship with Bush. He was asked about any “moral obligation” that he felt to pay back the money he borrowed from Silverado.

“I have elected to spend the last year and a half working diligently with my lenders, restructuring, staying alive for another day so that I can pay every dime back if I can,” Walters responded.

He moved to Orange County five months ago to begin anew in the real estate business.

Bush and Walters were once partners in JNB Exploration, an oil exploration company. Walters paid $150,000 in 1983 to own 6% of the company while Bush paid $100 to gain an 87.5% stake, according to Walters’ congressional testimony.

Two years after they joined forces, Bush joined Silverado’s board of directors. Federal regulators last week released documents that allege Bush violated conflict of interest regulations by voting to approve $96 million in loans to Walters.

Walters was one of Silverado’s preferred shareholders and one of its biggest borrowers.

Asked during the House’s hearings on Silverado if he thought he could ever recover his $100-million fortune, Walters responded, “It won’t be from a lack of trying.”

Times staff writer Robert Rosenblatt in Washington and researcher Ann Rovin in Denver contributed to this story.

NEIL BUSH WINS ROUND: The President’s son has obtained a court order to review government-held documents in his defense against conflict-of-interest charges. D1