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FDIC MAY SUE FAILED S&LS’ OFFICERS AND DIRECTORS - INCLUDING NEIL BUSH

SHARE FDIC MAY SUE FAILED S&LS’ OFFICERS AND DIRECTORS - INCLUDING NEIL BUSH

Federal officials are considering lawsuits to recover misspent funds from the officers and directors of 1,300 failed banks and savings institutions, a top regulator said Wednesday.

L. William Seidman, chairman of the Federal Deposit Insurance Corp., said suits already have been filed against 500 institutions. Approximately $100 million was recovered last year and more than $200 million in the first half of this year, he said."That is in excess of $1 million per day in recoveries" in 1990, he said.

The agency's officials said one suit under consideration would be against the former officers and directors of Silverado Banking, Savings and Loan Association, a Denver thrift whose December 1988 collapse cost taxpayers approximately $1 billion.

One of President Bush's sons, Neil, would be among the defendants.

Seidman's remarks came in testimony prepared for the House Judiciary subcommittee on criminal justice, chaired by Rep. Charles Schumer, D-N.Y. The panel is reviewing a package of reforms designed to speed the government's anti-fraud effort.

The legislation, a version of which was passed by a House Banking subcommittee two weeks ago, was endorsed by Seidman, Office of Thrift Supervision Director Timothy Ryan and James G. Richmond, a newly appointed Justice Department official in charge of prosecuting bank and thrift fraud

It would provide more money to hire investigators and attorneys to prosecute fraud, prevent people convicted of fraud from evading restitution by filing for bankruptcy and allow regulators and prosecutors to ask a judge to freeze the assets of those accused of fraud even before they are found guilty.

Congress has been holding hearings on S&L fraud for months, but the issue in recent weeks has become politically charged, with Democrats and Republicans each blaming the other for creating the crisis. Democrats have been hammering particularly hard at conflict-of-interest allegations made by regulators against Neil Bush.

The Office of Thrift Supervision released documents charging that Neil Bush engaged in "one of the worst kinds" of conflict of interest when he served as an outside director of Silverado. The documents alleged in specific cases that Bush violated his responsibility as a director to see that the thrift was run in the best interests of its shareholders.