Thrift Scandal Figure Living in O.C. Luxury : S&Ls;: Bill Walters, the developer and Neil Bush associate who defaulted in millions of Silverado loans, resides in a Newport Beach estate. He claims he’s broke.
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 here.
In February, a trust for Walters’ wife, Jacqueline, bought a $1.9-million gated estate near Newport Bay, according to county records reviewed by The Times. State records also show that his wife’s trust bought a mobile home on prime oceanfront property just northwest of Laguna Beach for $250,000.
The Newport Beach home--with four bedrooms, three baths and a courtyard pool--contains richly finished furniture and cut crystal. On Tuesday, two Mercedes-Benzes, registered in his wife’s name and bearing Colorado license plates, were parked in the stone-lined driveway while gardeners--who said they charge the Walters $800 a month--mowed the lawn.
Walters is a one-time business associate of Bush, a son of President Bush. The activities of Neil Bush, Walters and Kenneth Good, another business partner of Bush, 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 investigations of thrifts whose failures could ultimately cost taxpayers more than $500 billion. The high living of insiders and others tied to 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. Its failure is expected to cost taxpayers more than $1 billion.
Despite a business relationship with Walters, Bush voted to approve loans for Walters. 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 interviews. But 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 bought by the Walters Trust I, of which Jacqueline Walters is the beneficiary.
The house was recently owned by financier Roger W. Luby, once the companion of John Wayne’s daughter, Aissa. The house was also the scene of an attack on Luby and Wayne on Oct. 3, 1988, in which her former husband is charged with conspiracy.
The beachfront mobile home in the El Morro Beach Mobile Home Park--which carries with it a lease payment of $650 a month--is listed in Jacqueline Walters’ name.
For several months earlier this year, the Walterses stayed in a suite at the posh Four Seasons Hotel in Newport Beach as their new residence was renovated. Hotel spokeswoman Linda Barragan said the lowest daily rate for double occupancy is $250 a night, though she said long-term stays are negotiated on an individual basis.
Annunzio said the government immediately ought to file liens against the property, in a bid 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 of the Justice Department and the trust corporation--the agency charged with cleaning up the thrift industry--declined comment.
But Rep. Bruce Vento (D-Minn.), chairman of the RTC Oversight Task Force, a special House panel overseeing the thrift bailout, said: “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.
“It’s high time the Administration start 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 developers, the Bill L. Walters Co. The company employed about 1,000 people and built 5 million square feet of office, retail, hotel and athletic clubs but fell on hard times when Denver’s real estate market slumped.
Walters told the House oversight panel 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, 44, testified about his failed business deals and his relationship with Neil Bush. And he was asked about any “moral obligation” he felt to working 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 also once partners in JNB Exploration, an oil search company. Walters paid $150,000 in 1983 to own 6% of the company, while Bush paid just $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 alleging that 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 whether he thought he could ever recover his $100-million fortune, Walters responded: “It won’t be from a lack of trying.”
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
