Was Neil Bush a guileless victim of Denver's hard-charging financial sharpies or a willing accomplice? In the view of government regulators, Bush and 10 other former directors and officers of Denver's failed Silverado Banking, Savings and Loan are guilty of "gross negligence" and should pay $200 million in restitution for contributing to the S&L's collapse. As the President's outgoing, personable third son faces a separate disciplinary hearing this week in a Denver courthouse, federal investigators will accuse him of violating conflict-of-interest regulations while serving as a $12,000- a-year Silverado director. The 35-year-old oilman was widely perceived as a mere pawn of manipulators bent on cultivating political protection from federal regulators. Yet that sympathetic view now seems to fall far short of the full story.
A different portrait of the likable young Bush emerges from TIME interviews with former Silverado executives and real estate developers with whom the S&L had cozy and possibly illegal dealings. Citing Bush's M.B.A. from Tulane University, Denver insiders contend that he had to be aware of his own vulnerability to the go-go bankers and developers with whom he dealt. More significantly, they insist that Bush did not fall innocently into the clutches of the shrewd operators. Bush, they say, was as enthusiastic as Denver's highflyers in arranging their financing of his upstart JNB oil company, which he had the bad timing to start just after the petroboom had peaked.
The crafty moneymen not only bought stock in Bush's company and gave him a $100,000 loan he did not have to repay but also consented to lavish compensation that Bush awarded himself from his failing company. According to thrift and real estate sources, Bush drew a salary of $120,000 a year, earned undisclosed bonuses and had a comfortable expense account.
In the lawsuit filed last week, the Federal Deposit Insurance Corporation is trying to recoup some of the $1 billion that the government spent to bail out the failed Silverado. "Our conclusion is that Silverado was the victim of sophisticated schemes and abuses by insiders and of gross negligence by its directors and outside professionals," said Douglas Jones, the FDIC's senior deputy general counsel. In the Denver hearing this week, the Office of Thrift Supervision aims to persuade an administrative-law judge that Bush should be banned in effect from ever again serving on the board of a financial institution. Bush contends he is innocent of the charges, in which he is accused of failing to disclose his business relationships with developers who sought loans from Silverado.
Despite the persistent spotlight on the President's son, the story of Silverado's amazing expansion and rapid demise illustrates the broader evils behind the S&L disaster. It is a tale of interlocking relationships and sweet deals among S&Ls and their biggest customers, the possible impact of political contributions in delaying crackdowns by regulators, even the deceptive lure of junk bonds and their king, Michael Milken. It is not a case history of nice guys being caught innocently in an oil bust, as the defunct thrift's managers often claim. It is a study in greed, deceit and profiteering.
In the Silverado drama, Central Casting would have been hard pressed to come up with a group of characters who better personified the Roaring Eighties: