Hearing Begins in Suit Against President’s Son

A magistrate opened hearings Monday seeking to settle the government’s $200-million suit against the President’s son, Neil Bush, and other executives charged with negligence in the collapse of Silverado Banking, Savings & Loan Assn.

The Federal Deposit Insurance Corp. filed the suit last September against Bush and 12 other former Silverado officials, alleging that they were grossly negligent in the 1988 failure of the thrift.

It was one of the biggest suits ever filed by the agency.

In January, U.S. District Judge Sherman Finesilver refused to dismiss the suit and ordered the two weeks of closed-door hearings to see if a settlement can be reached before the case comes to trial in October.

Finesilver said the suit was “replete with well-placed facts” that tied Bush and the others to the thrift’s failure.

Critics say the entrepreneuer and oilman knew nothing about banking and should never have taken the job at Silverado, which became one of the biggest S&L; bankruptcies.

Its failure could cost taxpayers $1 billion.

Other charges center on Bush keeping secret his business ties with borrowers who won big loans from Denver-based Silverado. Most of the loans were never repaid.

Bush denies any wrongdoing, rejecting charges of conflict of interest during his three years at Silverado. President Bush has said he has every faith both in his son and the justice system.

But Democratic Rep. Pat Schroeder of Denver says the hearings should be held in the open, so the public can see what went on at Silverado.

“Everything should be public,” said Schroeder aide Dan Buck. “It’s still taxpayers’ money.”

Bailing out the nation’s thrifts is expected to cost taxpayers $500 billion, including interest. Many savings and loans collapsed due to risky loans, mismanagement and fraud.

U.S. Magistrate Donald Abram is chairing the hearings, which are scheduled to end April 26. Finesilver asked for Abram to report the results to him April 29.

Bush, 36, also faces a complaint by the Office of Thrift Supervision that he violated conflict-of-interest rules while on the Silverado board.