1981 Tax Act, xvi, 9, 19, 37–38, 55, 90
1986 Tax Reform Act, xv–xvi, 37, 91, 245
1988 presidential election, 117–119, 152–153, 237
60 Minutes, 185
Accountant’s Guide to Fraud Detection and Control, 252
acquisition, development, and construction (ADC) loans, 47–58, 60, 62, 90, 96, 107, 132, 134, 187, 189, 225, 248, 263, 285n7, 287nn14,15, 288n15
Adams, Jim Ring, 17
adjustable-rate mortgage (ARM), 7, 30–31, 281n6
Akerlof, George, xvi, 248, 303n2
Akin, Gump, Strauss, Hauer & Feld (aka Akin, Gump), 65–66, 96, 270–274
Ambition and the Power, The, 84
American Continental Corporation (ACC), 65, 216, 221–223, 226–235, 238–241, 248, 250–251, 255, 279, 300–301n2
American Institute for Certified Public Accountants, 252
American Savings, 81–82, 161, 181–184, 258
Andrews, Mike, 145–146, 149–151
Angotti, Ottavio, 79
Annunzio, Frank, 102, 139, 151
Arthur Andersen, 81, 216, 227, 250, 253–254, 265, 291n12
Arthur Young and Company, 53, 221, 223, 241, 244, 250–254, 285n8, 301n7
Association of Certified Fraud Examiners (ACFE), xix, 247
Austin American-Statesman, 143
Babcock, Charles, 184
Baker, James, 102, 114, 153–154
Bank Board. See Federal Home Loan Bank Board (FHLBB)
Barclay, George, 168, 177, 201, 208, 215, 219, 221
Barnard, Druie Douglas, 102, 115–119, 123, 126, 146, 150, 159–160
Barry, John, 84, 96–99, 101–102, 106, 110–112, 120–121, 123, 128–129, 133, 143–145, 147, 149–150, 153, 166
Barth, Jim, 161–170
Bartlett, Steve, 137–138, 145, 157
Bass, Robert, 299n7
Bennett, Robert, 297–298n7
Bentsen, Lloyd, 89
Bentson, George, 70, 75, 77–78, 221, 228, 246, 254, 273
Big 8 (top-tier accounting firms), 2, 4, 23, 39–40, 48, 50, 158, 230, 250
Bilby, Richard, 244
Binstein, Michael, 206
Bivens lawsuit, 203, 206, 237, 242, 299n10
“Black Monday,” 184
Boland, James, 168, 179, 186, 187
Bowsher, Charles, 171
Breedon, Richard, 240
Brookes, Warren, 163–164
Bureau of National Affairs, 150
Bush, George H. W., 33, 68–69, 76, 83, 92, 152, 233, 237, 243, 258, 262–263, 270–274, 283n2
Bush, George W., 261
Business Week, 143
California Department of Savings and Loans (CDSL), 1, 36, 46, 90, 199, 208, 211, 214, 220–221, 226, 228, 232–233, 236, 239, 242, 254, 284n15
California S&Ls. See American Savings; Beverly Hills Savings; California Department of Savings and Loans; deregulation; Lincoln Savings; North America Savings; real estate bubble/recession; Saratoga Savings; savings and loans (S&Ls)
Capitol Savings, 106
Carper, Thomas, 144, 148–151, 296n3
“cash for trash,” 53–54, 229, 231
cease and desist order (C&D), 195–197, 199, 222–223, 235
CenTrust Savings, 38
Chapman, James, 86
Cheney, Dick, 101
Cirona, James, 90, 176–178, 180, 184, 197, 201–202, 205–206, 211, 214–215, 234
Clarke, Richard, 240
Coelho, Tony, 86–88, 95–96, 109, 145, 156
Commodore Savings, 87
Community Reinvestment Act (CRA), 196
Competitive Equality in Banking Act (1987) (CEBA), 231
Congressional Budget Office, 104
consent-to-merger resolution, 125, 128
Consolidated Savings Bank, 79
control frauds: and CEOs, 2–7, 16, 27–28, 51, 286n10; and conflicts of interest, 253–254, 304–305n9; waves of, xv–xviii, 1, 3, 5–8, 14, 33, 39–40, 246–249, 256, 260–263, 267. See also acquisition, development, and construction (ADC) loans; Big 8; California S&Ls; “cash for trash”; daisy chain; deregulation; Dixon, Donald; high flier; Keating, Charles; Ponzi scheme; “straw”; Texas S&Ls
Cranston, Alan, 95, 104, 161, 200, 207, 236, 238. See also Keating, Charles: and Keating Five
Crawford, William, 1, 13, 63–64, 220, 228–229, 232, 239
Curlee, Durward, 89
daisy chain, 53–54, 99, 169, 293–294n5
Dallas Fraud Task Force, 99, 265
Dallas Morning News, 143
Dallas Times Herald, 143
Davis, William, 228–229
Deardorff, Charles, 90
DeConcini, Dennis, 76, 236, 253. See also Keating, Charles: and Keating Five
Democratic Congressional Campaign Committee (DCCC), 86–88, 95–96, 102, 108, 112, 133, 143
Democratic National Committee, 88, 97
Democratic Party, 88, 98–99, 103, 117, 120, 126
Department of Justice. See Justice Department
Department of Labor, 183
deposit insurance (FSLIC), 30, 33–34, 254–256
deregulation, xv–xvi, 3, 11–12, 14, 17, 29–38, 179, 233, 259–260, 262, 264; in Florida, 46, 60; in the southwest, 35–37, 46, 51, 55, 59–61, 76, 135. See also Reagan administration: and deregulation
Dingell, John, 72–74, 80, 164–165, 272–273; hearings, 71–74
Dixon, Donald, 36, 102, 107–110, 115–130, 133, 139, 152–154, 164, 216
Dochow, Darrell, 168, 188–206, 209–211, 213, 215–218, 221–236, 238, 240–241, 243, 251
Dornan, Robert, 101
Duncan, Phil, 184
Dzivi, Bart, 81
Easterbrook, Judge Frank H., 40, 246–247, 253, 256, 266, 304n7
Eckhardt, Robert, 102
economists: role in S&L loan debacle, 11–14
Empire Savings, 44–45, 55, 58, 118–119
Energy Commerce Committee, 72
Enforcement Review Committee (ERC), 201–205, 208, 211–217, 221, 239
Eureka Federal, 178–181, 185, 188, 298n1
Fairbanks, Shannon (Ann), 96, 181
Faulk, Walter, 119–120
Faulstich, James, 198
Fauntroy, Walter, 150
Federal Deposit Insurance Corporation (FDIC), 9–10, 43, 186, 237–238, 256, 265
Federal Home Loan Bank (FHLB): 18, 57, 66, 75–76, 92, 174–175, 180, 196, 211, 214, 224, 226, 228, 262
FHLB-Atlanta, 226
FHLB-Dallas, 42, 89–91, 99, 109–111, 119, 128, 131, 163, 168, 174–176, 224–225
FHLB-San Francisco (FHLBSF), 74, 79–81, 89, 96, 101, 164, 166, 174–244, 250, 254–255, 258, 262
FHLB-Seattle, 168, 188, 197–199, 204, 239–240, 254
Federal Home Loan Bank Board (FHLBB), xv, 37, 68–71, 90, 134, 136, 206
civil war within, xviii, 78–82
leadership of compared, 258–263. See also FSLIC recapitalization bill; Gray, Edwin: as Bank Board chairman; Keating, Charles: and Bank Board control; Pratt, Richard; Wall, Danny: as Bank Board chairman
Federal Savings and Loan Insurance Corporation (FSLIC), xvi, 8–11, 14, 19, 21–24, 28, 33, 35, 37, 42, 46, 61, 74, 90–91, 107, 158, 161, 169–172, 176, 181, 194, 213, 218–219, 235–237, 246, 256
Ferrante, Robert, 79
Financial Accounting Standards Board (FASB), 252
FAS 15 treatment by, 158, 297n5
Financial Institution Reform, Recovery, and Enforcement Act (FIRREA), 26–27
Financing Corporation (FICO), 104, 172
First Nationwide, 183
Fischel, Daniel, 10, 12, 246, 253–256, 266
Fishbein, Peter, 81
forbearance, 114–115, 131, 133, 136–137, 140, 146–147, 153–154, 259, 262
Foreign Corrupt Practices Act, 210
Freeman, “Snake,” 168
FSLIC recapitalization bill: in 1986, 91–104, 130
in 1987, 113–140, 143–166, 169, 172–186, 260–261
gains trading, 24–26
Gardner, Mickey, 65–73, 164, 270–274
Garn-St Germain Act (1982), xv–xvi, 29, 33, 35–36, 263
Gaubert, Thomas, 86–89, 95–97, 105–107, 115–126, 129, 133–135, 139, 146, 152–153, 164
General Accounting Office (GAO), xviii, 95, 131, 169, 171–172, 257, 267
Generally Accepted Accounting Principles (GAAP), 20–21, 25–27, 29, 31–32, 34, 48, 157–158, 160, 170–171
Gershon Kekst and Company, 70, 272
Glenn, John, 42, 85, 199–200, 297n4. See also Keating, Charles: and Keating Five
Gonzalez, Henry B., 144, 147–148, 234, 238, 241–243, 295–296n3
goodwill accounting, 7, 14, 20–29, 35
Gould, George, 130, 151, 156, 295n4
Government Accountability Office. See General Accounting Office (GAO)
Government Performance and Results Act (GPRA), xviii
Gramm, Phil, 89, 159–161, 166, 170
Gramm-Rudman Act, 104
Gray, Edwin: as Bank Board chairman, xvii, 8, 11–15, 41–46, 55–62, 78, 80–82, 87–88, 90–91, 95, 99–103, 115, 130–143, 147, 154, 159, 228; and reregulation, xvii–xviii, 8, 11–15, 43, 45–47, 56–59, 66, 74–75, 77, 92–94, 180, 244, 261–262. See also FSLIC recapitalization bill
Green, Roy, 109, 119–121, 124–128, 147, 168, 176
Greenspan, Alan, 56, 246, 303n1
Grogan, James, 72, 84–85, 164, 199, 206–207, 220, 250, 279, 297–298n7
Guaranty Savings, 286n11
Guy, Dan, 252
Haas, Richard, 170
Hall, Craig, 95–98, 100, 102, 105, 115, 122–123, 153, 169, 293n5
Hall, Sam, 85
Harrell, John, 87
Harwell, Aubrey, 105–106
Hemel, Eric, 58
Henkel, Lee, 75–80, 89, 151–152, 164, 223, 228, 240, 250, 254, 261–262
Henry, Jack, 253
Hershkowitz, Steve, 82, 215–218, 264
high flier (S&Ls), xiv–xv, 12–13, 53, 56–57, 60, 65, 74, 132, 169, 242
Hinz, William, 197–199
Hohlt, Rick, 168
Honest Graft, 106
House Banking Committee, 45, 95, 116–118, 131–132, 136–139, 143–155, 159, 191, 224, 234, 243
Houston Chronicle, 163–164
Hovde, Donald, 15, 67–68, 70, 75–77, 236, 270–274
Hoyle, Karl, 168, 184, 201, 215
I-30 corridor: and Texas S&Ls, 44–45
Independent American Savings, 86–88, 105–107, 116–119, 122, 146
Institute for Fraud Studies, LBJ School of Public Affairs, xix
Internal Revenue Service (IRS), 25–26, 75, 101, 265
Interwest Savings, 103
Jackson, Brooks, 106
Japan: recession in, 59, 62, 75
junk bonds, xv–xvi, 38, 81, 208–209, 230, 243, 248, 250, 255, 265, 289–290n2
Junot, Philippe, 109
Justice Department, xii–xiii, 18, 59, 78, 102, 107, 162, 208–209, 221, 224, 242, 256, 265
Keating, Charles: and Bank Board control, xvii–xviii, 65–78, 173, 213–220, 249–250, 262, 279
and fight against reregulation, 2–3, 18, 39, 56, 59, 63–64, 95, 100–101, 114–115, 143, 151–152, 165, 253–255, 265
homophobia of, 110–112, 115, 243–244
and Lincoln Savings, 15, 38, 65, 80, 82, 107, 185–212
and Keating Five, xvii, 42, 84, 94, 151–152, 161, 164, 174, 199, 206, 220, 223, 233, 237–238, 249–250, 253–254, 262
Keating Five. See Keating, Charles: and Keating Five
King, Thomas, 135
Knapp, Charles, 182
Kodani, George, 181
Kruckeberg, Timothy, 226
Kuwaiti Investment Office (KIO), 210
Lambert, Drexel Burnham, xvi, 38–39, 65, 81, 243, 255
land flip, 44
Larson, Carol, 194
Leach, James, 144, 148, 160, 166, 170, 240, 242, 296n3
League, the (United States League of Savings Institutions), 9, 113–115, 133–134, 151–158, 161–163, 165; and the Texas League, 115–116, 134–140
Leventhal, Kenneth, 210, 231, 242
Levitas, Elliot, xiv
Levitt, Arthur, 252–254, 261–262
Lewis, Jake, 234
Lieberman, Joe, 252
Lincoln Savings, xvi, 8, 15, 58, 64, 66–77, 80–82, 107, 152, 173, 246, 250, 255, 258–259, 262, 266, 302n8; FHLBSF examination of, 176–244
Linder, Carl, 64
loan-to-one-borrower (LTOB), 32
Lott, Trent, 157
Luce, Gordon, 41
Luke, Jordan, 168–169, 186, 188, 190, 204–205, 210, 214
Mack, John, 110, 120, 124–128, 139
MacNeil/Lehrer NewsHour, 154
Maher, Bishop Leo, 108–109
Main, George, 124
Mallick, George, 97–104, 117–120, 123
Mallick, Michael, 103, 120, 123
Management Consignment Program (MCP), 91, 96, 178–182, 185, 188
Manion, Daniel, 76–77
Manning, Michael, 264–265
mark-to-market valuation, 21–25, 28, 64
Martin, Roger, 168, 174–176, 201, 205–208, 211, 216, 218–219, 222, 225, 233, 239, 259
Mattox, James, 118–119, 145–146
Mayer, Martin, 106, 146–147, 152, 167, 174, 251, 258
McAllister, Walter “Bo,” 115, 135
McBirney, Edward, 87
McCain, John, 100–101, 249. See also Keating, Charles: and Keating Five
McJoynt, Patricia, 240
Meese, Edwin, 18
Memorandum of Understanding (MOU): and Bank Board, 223, 235, 241, 302–303n12
MeraBank, 284n13
Milken, Michael, xvi, 38, 65, 81, 243, 248, 255, 289–290n2
moral hazard theory, xvi, 6–7, 10, 13
Morrison and Hecker, 265
Murphy, James, 303n13
National Association of Home Builders (NAHB), 9, 145, 281n6
National Association of Realtors (NAR), 9, 145, 281n6
National Association of State Savings and Loan Supervisors (NASSLS), 63
National Commission on Financial Institution Reform, Recovery, and Enforcement (NCFIRRE), xiv, 27, 40, 64, 107, 155, 251
Neibel, John, 111
Nelson, Paul, 45
Newsom, Richard, 229, 232, 240
Nichols, Dorothy, 186, 194, 214
Nolan Act (1983), 36
Nolan, Pat, 36
North America Savings, 100–101
O’Connell, Bill, 7, 115, 138–139, 155, 276–277
O’Connell, Kevin, 192–195, 199–200, 211, 218, 220–222, 229, 232–234, 251
Office of Enforcement (OE), 79–82, 105–106, 175, 187, 214–216, 239, 264
Office of Examinations and Supervision (OES), 18
Office of General Counsel (OGC), 82, 181
Office of Management and Budget (OMB), 33, 45, 66, 76, 257–259, 267
Office of Personnel Management (OPM), 66
Office of Policy and Economic Research (OPER), 57–58, 288–289n6
Office of Regulatory Policy, Oversight, and Supervision (ORPOS), 168, 176, 186–188, 190–192, 198–199, 210, 218, 223, 229, 234, 239
Office of the Controller of the Currency (OCC), 79, 91, 168, 175, 225
Office of Thrift Supervision (OTS), 225, 237, 243–245, 258–260, 263
Parris, Stan, 295n1
Pashayan, Charles, 100–101
Patriarca, Mike, 80–82, 90, 174–183, 191–197, 200, 204, 207–208, 211, 225–226, 238, 241, 253, 259
Paul, David, 38–39
Phoenician, 210
Ponzi scheme, xiv, 3–5, 8, 30–34, 43, 59, 194, 221, 233, 254, 259, 262, 287nn14,16. See also acquisition, development, and construction (ADC) loans
Popejoy, William, 181–185
Pratt, Richard, 10–11, 14–21, 26–35, 38–42, 47, 50, 95, 159, 165, 177, 262–263, 283–284n12
Prins, Curtis, 102, 139, 151, 154
Provident Bank, 64
Proxmire, William, 95, 161, 172
Raupe, Craig, 130
Reagan, Ronald, xvii, 17, 41, 67, 70, 85, 145, 153, 167, 176, 180, 186, 259, 262. See also Reagan administration
Reagan administration: and cover-up of S&L insolvency, 5, 8–13, 19–20, 45, 95, 154
and deregulation, 9, 12, 19, 32–33, 256–258, 261–263
and fight against reregulation, 11, 15, 37, 67, 70–73, 76–77, 83–85, 90, 100, 117, 145, 153–154, 165–167
“Kitchen Cabinet,” 41, 70, 72, 270–274
real estate bubble/recession: regional (southwest), xvi, 5–6, 16, 37, 55, 90–91, 107, 111, 114, 132, 147, 196, 228, 248, 293n5, 294n7
recapitalization. See FSLIC recapitalization bill
Regan, Donald, 34, 37, 43, 70, 76, 90, 100, 142–143, 262, 270–274
Regulation Q, 30
Regulatory Accounting Principles (RAP), 20, 29, 31
creative RAP, 29, 42, 90, 134, 157–161, 166, 169
reinvention of government, xviii, 257, 267
Renda, Mario, 264
Republican Party: and Texas, 86–87
reregulation. See FSLIC recapitalization bill; Gray, Edwin: and reregulation
Resolution Trust Corporation (RTC), 238, 242–244, 251
Reverse Repurchase Obligations (REPO), 183, 299n6
Riegle, Donald, 152, 161, 238. See also Keating, Charles: and Keating Five
risk-controlled arbitrage (RCA), 10, 282n8
Robertson, Bill, 119–120, 162, 186, 194, 199, 221, 239
Roemer, Buddy, 144, 147–148, 296n3
Russia: economy of, xv, 247–249
Ryan, Timothy, 243–245, 258, 260
Sahadi, Robert, 78
San Antonio Savings Association, 115–116
Sanford, James, 161
Saratoga Savings, 300n13
Sarbanes-Oxley Act, 266
savings and loans (S&Ls): cover-up of insolvency of, 5, 8–13, 19–20, 29, 35, 45, 94, 154, 302n8; and gambling for resurrection, xvi, 13, 53
and growing out of problems, 47, 134, 179, 181–184
and late 1970s interest rate crisis, 5–8, 13–14, 24, 27. See also control frauds; de novos; deregulation; Federal Home Loan Bank (FHLB); Federal Savings and Loan Insurance Corporation (FSLIC); high flier; National Association of State Savings and Loan Supervisors (NASSLS); National Commission on Financial Institution Reform, Recovery, and Enforcement (NCFIRRE); and individual S&Ls
Schilling, William, 193
Schott, Paul Allen, 33
Schultz, Scott, 96, 169, 294n5
Scott, Stephen, 225–227, 232, 235
Securities and Exchange Commission (SEC), xvi, xviii–xix, 17, 64, 208–209, 214, 223–224, 240–242, 252–254, 257, 261, 264–265, 267
Segal, Tom, 287n14
Seidman, William, 142, 186, 237–238, 262
Selby, Joseph, 90–91, 98, 110–112, 119–121, 132, 146, 153, 168, 174–177, 204, 208, 221, 239, 259
Senate Banking Committee, 95, 136, 161, 172, 180
Senate Ethics Committee, 199, 297–298n7
Senate Judiciary Committee, 76
Settle, Joe, 175
Shand, Eric, 284n13
Sidley & Austin, 209
Simon, Harvey, 43
Smuzynski, Al, 192–195, 214, 216, 223
Squire, Sanders & Dempsey, 303n13
Stewart, Rosemary, 74, 78–80, 82, 105, 162, 175–176, 195, 199, 201–207, 209, 213–218, 222, 227, 235, 238–243, 251, 300n12
St Germain Act. See Garn-St Germain Act (1982)
St Germain, Fernand, 45, 95, 113, 118, 131–132, 137–139, 145–146, 148, 150, 155, 161–164, 234, 295
Still, Richard, 162
Stockman, David, 19
Strauss, Bob, 65, 97, 103, 119–120, 126, 153
“straw,” 2–4, 15, 38, 264, 281n4
Sunbelt Savings, 87
systems capacity theory, 17–19, 256–257
Taggart, Lawrence, 36–37, 46, 63, 90, 99–100, 254
Take on the Street, 254
Taylor, Mary Ellen, 116–117, 132, 149
Telegraph Savings, 34
Texas S&Ls: and Texas League, 89, 115–116, 134–140. See also Commodore Savings; Empire Savings; FSLIC recapitalization bill; Independent American Savings; real estate bubble/recession; Sunbelt Savings; Vernon Savings and Loan; Western Savings; Wright, Jim: and Texas S&Ls
Thrift Financial Report (TFR), 57
tort reform, 252–253
Treasury Department, 33–34, 45, 91, 139–140, 159, 252, 262
troubled-debt restructuring (TDR), 158, 292–293nn4, 5
Trump Group, 301n7
United States Department of Justice. See Justice Department
United States League of Savings Institutions. See League, the United States Treasury. See Treasury Department
Vernon Savings and Loan, 36–37, 53, 86–87, 102, 107–110, 115–120, 122–127, 131, 146, 154–156, 194, 215
Vincent, Janet, 301n7
Volcker, Paul, 5, 45, 142, 161
Wall, Danny: as Bank Board chairman, 8, 82, 110, 112, 153, 161, 167–178, 184–185, 237
and FHLBSF and Lincoln Savings, 178–213
and FSLIC recapitalization bill, 92, 96
and Keating, xvii–xviii, 83–84, 185–224, 243, 259, 263
Wall Street Journal, 133
Washington Post, 72, 154, 168, 184
Washington Times, 163
Waxman, Margery, 209, 220, 254
Webster, William, 102
Weinstein, Harris, 243–245
Western Savings, 53, 91, 285n8
White, Larry, 11–12, 77–78, 82, 164, 173–174, 202, 213, 233
White, Mark, 118
Williams, Julie, 80
Wolfe, Humbert, 16
Wright, Jim: and 1986 FSLIC recapitalization bill, 92–104
and 1987 recapitalization bill, 113–140, 143–144, 153–157, 166, 173, 262
and Bank Board, 73–74, 98, 104–112, 184–185, 279
fall of, from power, 83, 133–143, 154–156, 163
and Keating Five, xvii, 199–200, 233
and Texas S&Ls, 83–112, 117, 200, 249
Wylie, Chalmers, 113