Lincoln S&L; ‘Whistle-Blower’ Gets Key Promotion : Government: William K. Black, the federal thrift regulator who recommended seizing the Irvine-based thrift in 1987, is the new deputy chief counsel of enforcement and litigation for 11 Western states.

William K. Black, the federal thrift regulator in San Francisco who recommended seizing Lincoln Savings & Loan in 1987, was promoted Friday to head the litigation efforts for the Office of Thrift Supervision in 11 Western states and Guam.

Black, 39, had been district counsel for the agency’s San Francisco district, which covers California, Nevada and Arizona. As such, he oversaw regulation of Irvine-based Lincoln and told his superiors it was being run in a reckless way two years before it was seized. The failure of the thrift is expected to cost taxpayers more than $2 billion.

In his new post as deputy chief counsel, enforcement and litigation for the Western states, he joins two other deputy chiefs covering the rest of the nation and reporting directly to Harris Weinstein, the OTS chief counsel.

Black’s blistering testimony last year before the House Banking Committee delivered a heavy blow to M. Danny Wall, the former OTS director. Wall resigned after Black detailed how his superiors ignored his recommendations and removed him from the Lincoln case.

In his testimony, Black also laid part of the blame on five U.S. senators who went to bat for Lincoln’s owner, Charles H. Keating Jr., who made campaign contributions to them.

The notes he took at an April, 1987, meeting with the five senators--now dubbed the Keating Five--has become a key document in the Senate Ethics Committee investigation of the politicians, who include Alan Cranston (D-Calif.).

As a “quintessential whistle-blower,” Black risked his job to speak out against Wall, said Edwin J. Gray, former chairman of the Federal Home Loan Bank Board, which was replaced by the OTS in August, 1989.

“The West Coast is not big enough for Bill,” Gray said. “He should be put in charge of the litigation effort for the entire United States.”

Black joined the bank board in Washington in 1984 as litigation chief. Black also helped push through rules and legislative bills that started to re-regulate an industry they believed was getting out of control under deregulation laws of the early 1980s. Black moved to the San Francisco office in early 1987.