A Telling Silence in Newport

I sat in the back of the big, glass Newport Beach conference room in a hard, metal and plastic chair glumly watching the combatants circle each other in what up until then had been a rather dull few rounds of verbal jousting.

In one corner was Los Angeles Rep. Maxine Waters, known for a good fight, and some of her constituents, a busload of black business types who had made the trek down from Los Angeles “to voice their concerns.”

In the other corner were the suits, a rather bland group except for a guy with the handlebar mustache and the woman with hazel contact lenses representing a federal agency called the Resolution Trust Corp. They were there at Waters’ request.

The black folks were cordial but obviously upset. They felt that they were being screwed. (Not a very novel complaint.) The RTC people, meanwhile, were cordial and doing their best to look earnest. They were trying to explain to the black folks that they shouldn’t feel like they are getting screwed, even if it appears that way.

I’ve sat through so many meetings like this that my feet usually begin to fall asleep as soon as I enter the room. To borrow a phrase from Yogi Berra, it was like deja vu all over again.

But this one was a little different. I’d never been in one where so much money was up for grabs--millions upon millions upon millions.

You see, for the past four years, the United States of America has been having the world’s biggest liquidation sale. We’re talking the sale of the century, with prices slashed low, low, low. Everything reduced--as much as 30%, 40%, 50%, all the way down to 75% off the list price.

The auctioneer is the Resolution Trust Corp., which has been selling the assets of all those savings and loans that went belly up. The RTC office in Newport Beach handles business for California.

And do they have a warehouse full of exquisite merchandise. Apartment buildings. MUST GO! Office buildings. MUST GO! Homes. MUST GO! Loans. MUST GO! Land. MUST GO! Businesses. MUST GO! And the merchandise is moving fast. Last year alone, the Newport office liquidated $16 billion in assets.

But let’s say you don’t really have the cash to take advantage of this once-in-a-lifetime offer. You can still get in on the sale, because in order to get rid of this stuff, RTC has to hire a lot of people. That’s right. RTC has been handing out multimillion-dollar contracts to law firms, accounting agencies, property managers, real estate companies and loan managers to help liquidate the goodies. So far they’ve paid out nearly $4.5 billion in contracts.

“The RTC can make people millionaires overnight,” Waters told the gathering.

The RTC, however, hasn’t made millionaires out of any of the people who showed up with Waters. Nor has it enriched any of their friends. That’s why they were upset.

Their contention is that the RTC, in particular the Newport office, has not reached out to African Americans, both in terms of sales and contracts. Blacks have received a paltry amount of the RTC contracts while they have been stymied in purchasing properties by the RTC’s rigorous loan and purchase requirements.

During the meeting with Waters, the RTC put its best numbers and its best black faces forward. Frederick D. Smith, the office’s sales director, gave an exhaustive morning presentation--followed in the afternoon by Marcelle Penn, who is director of Minority and Women’s Programs, and Anastasia Burchette, senior attorney and manager of the legal program’s office. Roaming the sidelines, trouble-shooting, were RTC’s legislative analyst, Denise Lindsey, and Penn’s deputy assistant, Marilyn White.

They were an impressive bunch, black faces in high places, all working hard, with some success, to increase minority participation. But when the conversation shifted to exactly who got what instead of who looked like whom, the mood shifted.

“Does anybody in the group who came with me know of any African Americans who have purchased anything from RTC under the RTC financing program,” Waters asked.

There was some mumbling, but no responses.

Waters swiveled in her chair and looked at the RTC people.

“Can you tell me any African Americans that you know of who have purchased RTC property under the RTC financing program,” she asked.

You could hear a pin drop as each RTC official glanced at the other as if he or she might have an answer.

“This question is for anybody on the staff,” the congresswoman said.

Nobody answered. It was a telling moment.

Finally, Alvin J. Felton, director of the RTC office, spoke up.

“We can research that and get back to you,” he said. “But let’s talk about our minority outreach program.”

It was like deja vu, all over again.