Two of the most notorious figures from the savings and loan crisis are leaving prison early because they've cooperated with the government.
Together, thrifts headed by Don R. Dixon and Edwin T. "Fast Eddie" McBirney III lost more than $3 billion. The pair's downfall exposed some of the worst excesses in the era of 1980s S&L skulduggery, ranging from outright fraud to private sex parties thrown at depositor expense.Federal sentencing guidelines allow leniency for good behavior. But prosecutors and citizen groups have expressed outrage at the mercy afforded to Dixon and McBirney, calling it a flagrant example of the double standard of justice applied to white-collar criminals.
"If someone had walked in and stuck a gun in front of a cashier in a 7-Eleven store and stolen money of this magnitude, they'd be in jail for a very long time," said Tom Smith, director of Public Citizen's Texas' office.
Last week, McBirney's prison time was sliced from 15 years to five by U.S. District Judge Robert Maloney, who cut a year off Dixon's sentence in April.
McBirney, who began serving his sentence in a federal prison in Bastrop, Texas, 14 months ago, will be eligible for parole next year, said his attorney Charles Blau.
Dixon is set for release from prison in Dublin, Calif., on Nov. 7. However, his attorney, Deborah Goodall, said Dixon already should have been released this week, after serving less than 39 months of his 10-year sentence. The issue is going to Judge Maloney, Goodall said.
Along with Charles Keating and D.L. "Danny" Faulkner, Dixon and McBirney are two of the figures most closely associated with the savings and loan scandals.
Keating is serving a 121/2-year sentence in federal prison in the Lincoln Savings swindles.
Faulkner was sentenced to 20 years in prison in January 1992, after he and three associates were convicted of conspiring to steal $165 million from five Texas thrifts. However, Faulkner has been free on bond while waiting to hear whether the Supreme Court will consider the case.
Punishment for S&L felons is an emotional issue in Texas, one of the biggest economic victims of thrift collapses in the 1980s.
"The news that the government is about to free Don Dixon and Edwin McBirney from prison long before their sentences is not cause for celebration. These two were among the chief S&L looters in the state of Texas," Rep. Henry B. Gonzalez, D-Texas and chairman of the House Banking Committee, said in a written statement Wednesday.
"They're all thieves. They all ought to stay in jail because they screwed the American people out of literally $500 billion," said Robert Deitz, a Dallas syndicated columnist and author who writes about S&Ls.
"Don Dixon is one of the greatest thieves in American history," Deitz said. "I wish the man no ill will, but he really should not get an early release because of health problems or anything else. He lived the sweetest life you can imagine."
Dixon was convicted of defrauding his Vernon Savings and Loan Association. Vernon collapsed in 1987; its bailout cost taxpayers more than $1.3 billion.
The government said Dixon used S&L funds to pay for political contributions, hire prostitutes, take hunting trips and rent a beach home in Southern California.
Dixon was sentenced to two consecutive five-year terms in separate cases, as well as five years probation and 500 hours of community service.
Last December, U.S. District Judge A. Joe Fish ordered that Dixon's first sentence be considered complete when Dixon was indicted in the second case on Feb. 26, 1992. Dixon then had served just under one year.