S&L; Executives Make New Starts in Wake of Crisis : Careers: Among them, Edward A. Forde, former chief of failed San Marino S&L;, picks up the pieces by trying to develop a major business center in an out-of-the-way place.

How in the world did Edward A. Forde--one of the earliest contributors to the nation’s savings and loan debacle--wind up in a town like this?

That’s what many have asked in this sunbaked border spot of 20,000 people, where the ambience is more Mexican than American and an Anglo like Forde from the San Gabriel Valley stands out like a strikebreaker at a union rally.

Forde, former chief of now-defunct San Marino Savings & Loan Assn., is trying to develop a major business center here designed to create several hundred jobs in a region where unemployment is high and personal income is low. About $1.7 million in state funds has been earmarked to aid the development.

Yet, in an echo of the past, Forde’s quarrelsome business style served him badly when he lead an effort to recall two popular city councilmen who questioned his development. The recall failed and eventually sparked a county grand jury inquiry.

Controversy is nothing new to Forde. He was among the first of the swarm of real estate developers and lawyers who overran the savings and loan industry a decade or so ago, only to exit a few years later when their go-go thrifts failed.

In the past several years, hundreds of S&Ls; have collapsed, shaking the nation’s banking system and leaving the U.S. taxpayer with a cleanup bill that may eventually rise to more than $500 billion in the next 40 years.

Some thrift owners became notorious. Charles H. Keating Jr., former owner of Lincoln Savings, and David Paul, former head of CenTrust Savings, came to symbolize all that had gone wrong. Both face extensive criminal and civil investigations.

Yet most of the executives at these failed thrifts quickly faded from view after the government takeovers were announced. Like Forde, who is a lawyer and developer, many returned to the anonymity of their previous professions.

“They tend to be self-employed now and working in small groups, usually in very private surroundings,” said Bert Ely, a banking consultant in suburban Washington.

Forde now labors in a windowless office in a motel on Calexico’s cluttered commercial strip. Confronted at his office, he refused to be interviewed. “I’m done talking about savings and loans,” he said. “I’m tired of the whole thing.”

His father, E. Charles Forde, a Los Angeles-area attorney, said his son is “trying to make a new beginning, and do something right.”

With his glasses, receding hairline and ample paunch, Edward Allen Forde, 40, looks every inch an ordinary businessman. The facade is deceiving.

Forde’s business career began in San Gabriel Valley, where he and his older brother, Stephen, got their start investing in real estate and banking.

They founded San Marino Savings and the Bank of San Marino, both now defunct. Their partnership eventually dissolved amid a spate of lawsuits and charges of bad faith. Stephen Forde eventually went to jail for bank fraud in San Diego.

Edward Forde plunged from grace in early 1984 after regulators seized San Marino Savings because it had been operating so recklessly. He had been its top executive and a major stockholder.

The day the institution was taken over--Friday, Feb. 3--regulators halted Forde as he reportedly was trying to flee the thrift’s second-floor executive offices through a back door that led to the parking lot.

He was carrying company files and the keys to a company-owned car, all of which were confiscated, two ex-regulators confirmed in recent interviews.

San Marino Savings’ collapse was the first big S&L; failure of its kind to rock California. In the years to follow, it would be surpassed by even larger ones, all helping to bankrupt the industry’s deposit insurance fund and sparking the costly taxpayer bailout.

Regulators blamed San Marino’s failure on ill-conceived development loans and deceitful management practices--descriptions that became depressingly familiar as the thrift scandal played out.

Each of San Marino’s three dozen or so major commercial loans lost money, said Donald Crocker, the government-appointed conservator. Its collapse cost the deposit insurance fund $193 million, a record amount at the time.

Forde did not leave the savings and loan industry easily. He repeatedly raged against regulators, picturing them as inept tormentors, and sued to have them ousted as conservators of the association.

In the ensuing court fight, after regulators charged that San Marino Savings could not account for $59 million, an angry Forde contended that the number was “from outer space.” They “used that number to sensationalize the issue and be as inflammatory as they can be,” he added in an interview at that time.

A federal judge in Los Angeles upheld the government seizure in late 1984, and regulators closed the troubled thrifts for good a few weeks after that. Its assets were sold at a large loss.

A later civil suit against Forde and others by the Federal Savings & Loan Insurance Corp. was settled for a large, though undisclosed, amount. The failure also sparked an intensive criminal investigation but no indictments.

Calexico is a town that exists primarily as a shopping center for fast-growing Mexicali on the other side of the border. Its Vons grocery store and swap meet are usually mobbed with Mexican consumers, locals say.

“We’d starve to death if it were not for Mexicali,” said Victor Legaspi, a city councilman.

Though mostly Mexican-American now, Calexico and the surrounding area were settled early in this century by European and Asian immigrants. The area once had a sizable Japanese-American population, but most never came back after being forced into resettlement camps during World War II.

Spanish is the main business language in Calexico in the fast-food joints and small businesses. The commercial hot spot is the huge swap meet that runs Wednesday through Sunday and attracts shoppers from hundreds of miles away.

Although desperate for stable, high-income jobs, Calexico has a reputation as a difficult town to do business. Pro-growth and limited growth forces are frequently at odds over ethics issues and how the town should develop.

One recent controversy centered on the city clerk who received--but did not disclose as required by state election law--a $13,250 loan from a local developer. “That town is always full of turmoil,” one county law enforcement official said. “It’s always boiling.”

Forde came to southern Imperial County two to three years ago, when he and a group of business partners, known as Valle Verde Associates, tried to develop a mobile home park on nearby Sunbeam Lake.

The deal flopped after Forde and his fellow investors could not prove they had the necessary financial backing, said Luis Legaspi, a county supervisor at the time. The project was eventually taken over and developed by Danny Villanueva, a former Los Angeles Ram kicker raised in Calexico.

Forde started working in Calexico last year in partnership with Daniel O. Robinson, a longtime local car dealer, to develop the Portico Industrial Park. Robinson, Forde and others felt the town needed an industrial development to keep economic pace with surrounding towns, such as El Centro, that were developing much faster.

Forde has acted as the development’s spokesman, attorney and prime mover, with Robinson as a key financial backer. Forde, who lives in nearby Holtville, is also a 25% owner in the development, Robinson said.

That Forde once headed a S&L; that failed mattered little to Robinson and many others in town, where well-paying jobs are scarce. Forde’s background became common knowledge following a local newspaper article last fall.

“He was just one of thousands of (savings and loan) people who got into trouble nationwide,” Robinson argued. “What business is it to . . . Calexico? We’re the ones who have invested $3 million in this project.”

Portico has received strong support from the mayor and local business community, who see the industrial park as an important distribution point for manufacturing plants in Mexicali that export their products to San Diego and Los Angeles.

The business center will take on added importance if, as expected, free trade eventually materializes between the United States and Mexico, they say. “These are meaningful jobs that will help families survive,” said former Mayor Fred Knechel, executive director of the local Chamber of Commerce.

Yet, the development became embroiled in local politics when Forde helped lead a recall attempt of two city councilmen--Victor Rocha and Victor Legaspi, Luis’ brother--last fall. The councilmen had demanded that Forde and his partners pay $48,000 in development fees for municipal services, such as increased fire and police protection.

“We’re a poor city,” Victor Legaspi said. “We need that money. . . . If they had paid their fees, there would have been no problem.” (The fees were recently paid after months of haggling.)

Enough signatures were gathered to qualify for an election, but the recall petitions were disqualified because so many signers were not registered voters. Recall foes also claimed that even some signature gatherers were not registered voters or were paid $2.50 for each signature gathered.

An Imperial County grand jury looked into the complaints and eventually concluded that no election laws were broken. Yet the failed recall badly polarized the five-person city council and delayed the project’s approval.

“I thought at the time it was (a good idea),” said Robinson, “but it did not turn out that well. We’re staying out of politics now.”

Through its office of local development at the Commerce Department, the state of California has agreed to provide a low-interest loan if Forde and his partners can prove the development will supply at least 330 new jobs and can lease at least 105,000 square feet of office space.

The state is prepared to loan the money to the city, which in turn will turn over most of the $1.7 million to Forde and his partners to repay a current loan from Security Pacific National Bank that financed the grading and utilities work for the 96-acre project. Rent money from the business center will then be used to pay the state back.

“Our primary mission is job creation, and we don’t spend a dime until we know they will be created,” said Brian McMahon, head of the office of local development. He added: “Forde’s background is not a primary consideration in this project.”

Nevertheless, the state funds may be in jeopardy because the proposed business park apparently does not have enough tenants signed up. The state agency is expected to decide shortly whether to disburse the funds.

Robinson said the project will proceed with or without the state money. “We’ve got too much money invested (to quit now),” he said.

Where They Are Now

With the savings and loan industry in virtual ruins today, many of its former leaders in California have either retired, sought new fields or been sent to jail because their own financial institutions failed. Here’s a sampling of some of them and what they are doing now:

Name: Herbert J. Young

Former job: Chief executive of Gibraltar Savings, once the nation’s 10th-largest thrift. Sold to Security Pacific National Bank. Estimated taxpayer cost: $628 million.

Update: Retired and living quietly, Young, 59, is trying to forget events at Gibraltar, where he worked most of his adult life. Forced out as CEO about a year before thrift failed.

Quote: “You can never put it completely behind you, but you can’t sit around and stew about it either.”

Name: Kenneth J. Thygerson

Former job: Chief executive of Imperial Savings, which failed last year. Done in mainly by junk-bond investments. Assets being sold by federal thrift regulators. Estimated taxpayer cost: $1.6 billion.

Update: An accounting and finance professor at Cal State San Bernardino, the 45-year-old Thygerson is writing a college textbook on finance. College bio makes no mention of Imperial’s failure. Has a Ph.D in finance from Northwestern University.

Quote: “I’m as happy as I can be.”

Name: Leonard Shane

Former job: Headed Mercury Savings & Loan. Its failure expected to cost taxpayers $34 million. Security Pacific bought its 24 branch offices and about a fifth of its $1.53 billion in assets.

Update: A one-time industry leader, Shane, 69, is retired and living in Orange County. Extremely angry at regulators for closing Mercury. Has sued regulators for withholding his retirement benefits.

Quote: Has stopped making public comments. “We were taken down artificially,” he said last year.

Name: Daniel W. Dierdorff

Former job: Founder of San Diego-based Sun Savings, which failed in 1986. Acquired by private investors for $2.5 million and renamed Flagship Savings.

Update: Dierdorff, 54, is serving a six-year jail term at a minimum-security federal prison in Boron, Calif., for forgery and misuse of thrift funds. He admitted taking more than $200,000 in loan kickbacks; due to be released in early 1993.

Quote: Declined interview request. “He left me with the distinct impression he doesn’t want any more publicity at all,” a prison spokesman said.