Republican gubernatorial candidate Pete Wilson escalated his savings and loan dispute with Democrat Dianne Feinstein Monday by airing a new television commercial that claims Feinstein has personally profited from the troubles of the thrift industry--a contention Feinstein immediately denied.
The new Wilson ad, appearing in 30-second and 60-second versions, contends that Feinstein profited through the takeover of the ailing Jackson County Savings & Loan in Medford, Ore., by a group of investors led by her husband, Richard C. Blum, a San Francisco investment banker and adviser.
The commercial says Feinstein and her husband "own" a savings and loan that received an $87-million federal bailout. The ad relies on an estimate by American Banker, an investment newspaper, that the total cost of the bailout for the life of the agreement between Blum's group and the federal government could reach $87 million.
But the initial federal investment is $23 million with a guarantee of $35 million to cover questionable loans should they default, Feinstein said in a statement released by her campaign.
The statement also said that Blum personally owns only one-quarter of 1% of the stock in Jackson County Savings & Loan. While the firm reported net earnings in its first year under the takeover, the statement said that Blum has not profited on his investment because the price of Jackson County S&L; stock has dropped from $10 a share in December, 1988, to between $7.50 and $8.75 a share now.
Blum's firm, Richard C. Blum Associates, did receive a $325,000 consulting fee for arranging the takeover--designed to prevent the thrift from going under. Feinstein aides said that is less than the Federal Home Loan Bank of Seattle had approved for such a service from an Ohio investment firm that earlier tried, and failed, to put together an investor bailout for the Jackson County thrift.
The Wilson ad reiterated that he "had no role" in the savings and loan crisis while the Feinstein campaign cited letters he wrote to federal regulators on behalf of 16 California firms. But there has been no evidence that Wilson either sought or received special treatment for his constituents.