You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login

Reply #18: Lincoln Savings and Loan - Neil Bush [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Latest Breaking News Donate to DU
seemslikeadream Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-16-06 12:19 AM
Response to Original message
18. Lincoln Savings and Loan - Neil Bush
Edited on Wed Aug-16-06 12:20 AM by seemslikeadream

Bush's Role in Corporate Fraud
By Willliam Black and James Galbraith

President George W. Bush has reassured us that ''From the antitrust laws of the 19th century to the S&L reforms of recent times, America has tackled financial problems when they appeared.'' But the savings & loan reforms came seven years and 150 billion taxpayer dollars late. Nor did that problem merely ''appear.'' It was created by a deregulation bill in 1982 overseen at that time by Vice President George Bush. From 1981 to 1988, the Reagan-Bush administration covered up the S&L debacle. It forced reductions in S&L examiners and fought against the top federal regulator, Ed Gray, who sounded the alarm. Charles Keating, the felon who drove Lincoln Savings into the most expensive S&L failure in history ($3 billion) considered Vice President Bush an ally in his efforts to force Gray from office. Only after he was safely elected president did Bush propose to reregulate the S&L industry in 1989.

Meanwhile, Neil Bush, private citizen, was getting a ''loan'' from a business partner. The partner invested the loan for the president's son with the agreement that if the investment succeeded Neil would get all the profits and repay the debt, but if it failed he would not have to repay. Neil knew that this business partner was not creditworthy and yet was borrowing over $100 million from Silverado S&L, where Neil was a member of the board. Neil did not warn Silverado that the borrower was not creditworthy. When Silverado failed, the Office of Thrift Supervision proposed a minor enforcement action against Neil, which the Bush administration then attempted to block.

George W. Bush, private citizen, emulated his brother Neil. He became rich through a buyout of his interest in the Texas Rangers at a huge profit. How did he purchase that interest in the first place? He got a very large loan from a very friendly bank. How was the bank able to justify the loan? If at all, because of the market's valuation of Bush's shares in Harken. Why was he on Harken's board of directors and also a well-paid consultant? Because his name was Bush. Why was he able to sell his Harken shares for a profit? Because Harken committed a financial fraud that hid real losses and created fictional income.

What was the nature of that fraud? It was a variant on the Enron and Lincoln Savings frauds. Harken insiders formed a entity which ''purchased'' Harken's bad assets for a grossly excessive price. But Harken financed almost all of the sale. If the bad assets had stayed on the books, Harken would have had to report severe losses, threatening its survival and causing its stock values to plummet. George W. Bush is a wealthy man today because his business friends were willing to stoop to fraud to make him rich.

George W. Bush is in trouble, in part, because of his clumsy coverups of this fraud. Knowing of the severe problems at Harken, Bush sold around 200,000 shares of stock for around $4 a share. (We do not know who purchased Bush's shares, but was it the ever-friendly Harvard Management Corp., which had started buying Harken when Bush joined it and had, by 1990, become one of its largest holders?) He then failed to file required notice of these sales. When challenged on that point, he first claimed that the SEC ''lost'' his filing. His second story was to blame the failure on Harken's lawyers. But that won't wash. Bush was selling his own stock, and was therefore personally responsible for filing the documents.

Bush claims to see nothing wrong about Harken's frauds. However, the goal was to hide real losses and to book fictional income. The people who made the decision and the board of directors stood to gain directly from the fraud, and Bush did benefitenormously. Bush is also wrong on the accounting. This was a deliberately complicated transaction for the same reason that Enron's and Lincoln Savings's partnerships were complicated. Complexity makes it hard for regulators to discern fraud. While the transaction was complicated, the underlying fraud is so well known that the accounting rules governing such transactions are not vague. There was no ''honest dispute'' about accounting rules. There was a deliberate fraud structured in a complicated manner in order to claim that it wasn't really deliberate.
Printer Friendly | Permalink |  | Top
  -Plame lawyer plans to force Cheney, Rove testimony sabra  Aug-15-06 08:54 PM   #0 
  - Good. Get the bastards under oath.  Lindacooks   Aug-15-06 08:56 PM   #1 
  - Do you think taking an oath has any meaning for these criminals?  tinfoilinfor2005   Aug-15-06 09:07 PM   #8 
     - I'm not worried about that at this point.  Lindacooks   Aug-15-06 09:14 PM   #11 
     - Wasn't Rove under oath to Fitzpatrick?  tinfoilinfor2005   Aug-15-06 09:34 PM   #14 
        - Thank You Valerie.  midnight   Aug-16-06 12:27 AM   #19 
     - It has meaning to US!  exlrrp   Aug-16-06 08:22 AM   #35 
     - It May Not Mean Much to Them  stepnw1f   Aug-16-06 08:35 AM   #36 
  - oh please oh please oh please oh please ?!?!?  hippiechick   Aug-15-06 08:59 PM   #2 
  - BWAHAHAHAHAHA!  ocelot   Aug-15-06 09:00 PM   #3 
  - I hope it happens quick. I hope Fitz does something soon too.  panader0   Aug-15-06 09:02 PM   #4 
  - No Delay allowed in Paula Jones case  MissWaverly   Aug-15-06 09:20 PM   #13 
  - IMO, this is the only reason for the lawsuit.  tabasco   Aug-15-06 09:04 PM   #5 
  - Never gonna happen.  dicksteele   Aug-15-06 09:04 PM   #6 
  - And even if they do testify, they'll lie...  madame defarge   Aug-15-06 09:08 PM   #9 
  - Yes, but  disndat   Aug-16-06 08:08 AM   #34 
     - Yes, it could do that. Every little bit helps.  dicksteele   Aug-16-06 09:19 AM   #41 
  - Payback Is Such A Bitch  Demeter   Aug-15-06 09:04 PM   #7 
  - I cannot answer that question, I plead National Security!  I_Make_Mistakes   Aug-15-06 09:10 PM   #10 
  - past time to wipe that cocky smile from his face.  rodeodance   Aug-15-06 09:15 PM   #12 
  - Say, didn't Ann Coulter work on the Paula Jones case?  Canuckistanian   Aug-15-06 09:50 PM   #15 
  - Petard. Hoist.  tanyev   Aug-15-06 09:52 PM   #16 
  - "Mau! Mau!" I can hear it in my dreams....!  elehhhhna   Aug-15-06 11:27 PM   #17 
  - Lincoln Savings and Loan - Neil Bush  seemslikeadream   Aug-16-06 12:19 AM   #18 
  - Money for Nothing  Lasher   Aug-16-06 09:18 AM   #40 
  - Plame lawyer plans to force Cheney, Rove testimony  aggiesal   Aug-16-06 02:31 AM   #20 
  - this is going to increase Ambien sales in DC for the next few months.  truthisfreedom   Aug-16-06 02:31 AM   #21 
  - Let's use that legal precedent ASAP.  midnight   Aug-16-06 02:31 AM   #22 
  - I *knew* the RWers would eventually regret Jones v. Clinton  dmesg   Aug-16-06 02:31 AM   #23 
  - My Thoughts Exactly  ribofunk   Aug-16-06 02:31 AM   #26 
  - Yep.  tblue37   Aug-16-06 03:37 AM   #28 
  - Cheers Indeed! (nt)  stepnw1f   Aug-16-06 08:37 AM   #37 
  - CLASSIC Backfire  rwenos   Aug-16-06 09:39 PM   #49 
  - Fantastic news! k/r  Dystopian   Aug-16-06 02:31 AM   #24 
  - Ahhhh, becareful what you fight for Pugs!  napi21   Aug-16-06 02:31 AM   #25 
  - It's things like this that make me believe in karma  ThsMchneKilsFascists   Aug-16-06 02:33 AM   #27 
  - Hey, mods@  eridani   Aug-16-06 03:55 AM   #29 
  - Sweet irony.  lonestarnot   Aug-16-06 07:35 AM   #31 
  - It is amazing how things can come back full circle in life  stop the bleeding   Aug-16-06 07:15 AM   #30 
  - It is called Karma.  DinahMoeHum   Aug-16-06 09:02 AM   #38 
  - If nothing else  Lowell   Aug-16-06 07:44 AM   #32 
  - We don't have the LimbaughSphere echoing all the charges  ItsTheMediaStupid   Aug-16-06 10:05 AM   #43 
  - Since when does this Administration pay attention to "legal niceties"  NotGonnaTakeIt   Aug-16-06 08:02 AM   #33 
  - Civil Cases  bpj1962   Aug-16-06 12:03 PM   #45 
     - My bad...  NotGonnaTakeIt   Aug-16-06 12:57 PM   #46 
  - The quicker this gets to court, the better!!  sinkingfeeling   Aug-16-06 09:03 AM   #39 
  - As Wayne and Garth used to say.....  speedoo   Aug-16-06 10:03 AM   #42 
  - Call me cynical.  MGKrebs   Aug-16-06 11:57 AM   #44 
  - What goes around comes around...  krispos42   Aug-16-06 02:04 PM   #47 
  - What goes around, comes around n/t  NEOBuckeye   Aug-16-06 03:33 PM   #48 
  - Wont happen--Watch the court overturn the Jones decision  Joe Bacon   Aug-16-06 11:07 PM   #50 

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002
Software has been extensively modified by the DU administrators

Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC