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S&L Regulator Denies Neil Bush’s Request for Hearing

February 9, 1991

WASHINGTON (AP) _ A top savings and loan regulator on Friday denied Neil Bush’s request for a second public hearing on the government’s conflict-of-interest case against him.

The president’s son had asked Timothy Ryan, director of the Office of Thrift Supervision, for a chance to argue his case before Ryan in person.

Ryan is due to decide soon whether restrictions should be imposed on Bush’s business activities if he takes another position with a savings institution.

The office charged Bush in January 1990 with conflict of interest in his role as a director of the failed Silverado Banking, Savings and Loan Association of Denver. Silverado’s collapse in December 1988 is expected to cost taxpayers $1 billion.

Bush, a 36-year-old oil and gas developer, had the right under administrative law to ask for a hearing.

But Ryan, who was not obligated to grant the request, said in a brief statement that Bush ″failed to demonstrate good cause.″ Staff attorneys had recommended to Ryan that he refuse Bush’s request.

Bush’s attorney, James Nesland, said he was ″disappointed but certainly not surprised″ by Ryan’s decision not to hold a hearing.

In a legal brief filed last month, Bush said a recent recommendation to Ryan by the administrative law judge in the case was ″grossly inconsistent with the facts and the law″. Bush asked for the chance to supplement his written objections to the judge’s proposal with oral arguments.

″He (Bush) would be able to point out what the real problems are,″ Nesland told The Associated Press Thursday.

The judge, Daniel J. Davidson, found that Bush exposed Silverado to ″abnormal risk.″ He recommended to Ryan in December that Bush be required to meet certain conditions if he again becomes a director or officer of a bank or savings and loan.

Davidson said, for example, that Bush should be required to get advice from a lawyer on potential conflicts of interest.

Lawyers for the Office of Thrift Sueprvision went a step further, telling Ryan that Bush should not be allowed to accept such a position unless he has demonstrated to federal regulators that he can recognize the existence of actual and potential conflicts.

Ryan is widely expected to adopt Davidson’s proposals, or something close to them, when he makes his decision.

Bush would have the right to appeal that decision to a federal court, and Nesland has said his client would do so if Ryan adopts Davidson’s recommendation.

Davidson held a public hearing in September in Denver, at which Bush and government witnesses testified.

But Bush and the regulators have sparred mainly through exchanges of dry legal documents, spiced up here and there with severe language. In a recent brief, for example, the government’s attorneys said Bush showed ″evidence of personal dishonesty″ by failing to fully disclose his business ties.

Bush countered by accusing the regulators of showing a ″Big Brother mentality″ and Davidson of failing to act independently.

Davidson ″never comprehended the issues or the arguments presented on the issues,″ Bush said in his formal request for a hearing. ″The numerous defects in (Davidson’s recommendation) cannot be presented in writing in a concise way.″

The regulators have accused Bush of failing to adequately inform fellow Silverado directors of his business ties with developers Kenneth Good and Bill Walters, who invested in Bush’s oil company. Good and Walters eventually defaulted on more than $132 million in loans from Silverado.

Bush has insisted that he committed no wrongdoing in voting as a director to approve loans to Good and Walters.

In addition to the government’s conflict-of-interest case, Bush also faces a $200 million negligence lawsuit filed against him and other former Silverado directors by the Federal Deposit Insurance Corp.

A federal judge in Denver recently denied requests by Bush and other former directors to dismiss the FDIC suit. A trial is scheduled for October.

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