After combatively defending himself at a public hearing against federal conflict-of-interest charges, Neil Bush now faces a potentially more damaging hurdle that could hit his wallet as well as his reputation.
In addition to the government's conflict-of-interest case, the president's son faces a new $200 million lawsuit against him and other former directors of a failed Colorado savings and loan. The suit alleges that ``gross negligence' by the directors contributed to the thrift's collapse.That intensifies the pressure on Neil Bush, 35, who already has become an unwilling symbol of the savings and loan crisis and a potential political liability for his father and the Republican Party.
The negligence suit, filed Sept. 21 by the Federal Deposit Insurance Corp., ``obviously made it more difficult' for Neil Bush, his attorney, James Nesland, said Friday.
Bush testified for three hours Thursday before an administrative law judge, insisting that his business dealings with two Denver developers did not conflict with his role as a director of Silverado Banking, Savings and Loan Association. The developers, Kenneth Good and Bill Walters, eventually defaulted on more than $132 million in loans from Silverado.
Silverado collapsed in late 1988, leaving U.S. taxpayers with a $1 billion tab for reimbursing depositors of the federally insured institution. Bush was a director of Silverado from August 1985 to August 1988, quitting the post a few days after his father won the Republican presidential nomination.
The federal Office of Thrift Supervision is seeking an administrative order against Bush that could lead to barring him from the banking and savings industry. The regulators contend that Bush failed to adequately inform fellow Silverado directors of his business ties with Good and Walters, who invested in Bush's oil company, JNB Exploration.
Administrative Law Judge Daniel J. Davidson will examine testimony from last week's hearing before him and is expected to recommend in January to OTS Director Timothy Ryan what sanctions, if any, should be taken against Bush. Ryan is scheduled to make a decision in May, and Bush would have the right to appeal it to a federal court.
Just four days before the start of the OTS hearing in a federal courtroom in Denver, the FDIC filed its lawsuit.
``That can't be coincidental,' Nesland said. ``One has to recognize that those (federal) agencies act jointly.'
The regulators insisted, however, that the suit was filed that day because the FDIC had just finished its review of the matter after about six months of consideration.
``Politics simply are not involved,' said Alan Whitney, an FDIC spokesman in Washington.
Politics or no, the civil lawsuit brings a new dimension to the Bush case by threatening him with financial liability, not just banishment from the banking and savings industry.