Page 3


A series of loans totaling $691,300 to Juan M. Salinas, Enrique’s brother, \(minds only by a 1974 Jaguar and a $110,000 certificate of deposit. The bank examiners’ June report said that Juan Salinas “reportedly was killed in an airplane crash in Mexico Also allegedly killed in the crash was Juan Salinas’ secretary, Alex Short, who got $100,300 from the bank. Her loan was backed up by a $100,000 certificate of deposit made out to Enrique’s wife, Gretchen B. Salinas. The examiners discovered that the CD had already been assigned as collateral on another debt at another bank. “Management seemed unaware of how this bank’s collateral got out of this bank and pledged . . . as well as how or when this indebtedness will be paid,” the examiners said. Because of Short’s and Juan Salinas’ deaths, most of these loans were written off as losses. A series of loans totaling $129,000 to Jose Luis Flores, Enrique Salinas’ brotherin-law. Only one of the four notes could be traced and “it was found that the loan purchased a cashier’s check which was endorsed by maker and Luis Salinas \(director “There is no way that maker even begins to support this amount of unsecured monies. His financial condition is not liquid enough to even pay the interest on these loans without selling a good portion of his assets.” $301,143 in loans to Atiliano de la Garza, secured by a 1973 Cessna with no title search or lien filed, a 1976 Cessna with no lien filed \(this is believed to be the plane ment, a bulldozer, a 1976 Ford, and a security agreement on a restaurant. De la Garza’s financial staterhent listed thousands of acres of land in Mexico. The examiners reported, “Proceeds of $25,000 purchased a cashier’s check that was endorsed by Juan Salinas.” $89,800 to Bicknell M. Eubanks of Eagle Pass, a customs inspector. The notes were secured only by a lien on a 1974 Alfa and a 1975 Cessna airplane with no registration number, no title search, no filed lien, and no insurance. Some $39,500 of Eubanks’ loans went to Juan Salinas’ secretary, Alex Short, “again raising question as to who actually received the benefit of this credit,” the examiners said. “The poor financial condition of maker which obviously reflects complete inability to repay these loans, totally incomplete documentation on reported collateral, and past due status easily justify a loss classification” on the outstanding sum of $77,314. The U.S. Customs Department, which already was interested in Enrique Salinas, is no doubt also looking into Bicknell M. Eubanks. Hundreds of thousands of dollars in loans to Dan Sanchez, vice president of the Citizens board during Salinas’ term of ownership. Notes for $5,000 and $9,500 were originally made at 8 percent interest, but some little gnome at the bank altered the loan documents to make it appear that Sanchez owed only 5 percent interest to the bank. Many more strange and fascinating loans were written off by the examiners. Then, on June 28, Banking Commissioner Robert E. Stewart decided to close the bank. Salinas hired Arthur Mitchell to try to keep the bank open, but the courts decided to allow the Federal Deposit Insurance Corporation to go ahead and liquidate Citizens State’s assets. Stewart explained in one court brief, “The examiners found unexplained discrepancies in their examination of the bank. [The books are out of balance by about half a million dollars.] In addition, they found that an officer and the majority stockholder-director of the bank had engaged in a pattern of self-dealing and making unsecured loans which resulted in the examiners charging off as losses approximately $3.3 million book assets of the bank. . . . In short, the bank’s insolvent condition is attributable in large part to selklealing by bank officers and directors.’_ ‘ At preseit, Salinas and his crumbling financial empire are being investigated by the state banking department, the Texas attorney general, U.S. attorneys in San Antonio and Dallas, the FDIC, the FBI, and customs agents. Salinas’ loans are being called in so quickly that soon he won’t have two dry mesquite beans to rub together. And a number of other investors are feeling reverberations from Salinas’ collapse. There’s a whole prairie full of rabbit trails for government agents and reporters to follow. Hugh Aynesworth of The Dallas Times, Herald, Stryker McGuire of the San Antonio Lights, and Earl Golz and Dave McNeely of The Dallas Morning News are all on the story. Stay tuned to these papers and the Observer for further exciting chapters in the Salinas story. With luck we should be able to answer the following questions: How do Richmond G. Harper of Eagle Pass \(released from a federal government and his Eagle Pass and Clayton, New Mexico, banks fit into the plot? How close is Richmond Harper to Ben Barnes? What will happen to the Groos senior loan officer who defied a court order and slipped $1.6 million in securities pledged to Groos out of the Citizens State Bank? Is there Mexican money, dope, or other contraband involved in this tale? Customs agents have seized two of Salinas’ airplanes in the last two months. One plane was seized in Del Rio July 26 because it allegedly made 41 trips between Mexico and the U.S. with an expired registration. Salinas says the customs people are hararsing him and that the planes were taken on “technicalities.” My, what a fine bank scandal. K.N. `Juan goofed’ San Antonio One of the weirdest incidents in the Salinas story was a plane crash somewhere in Mexico on June 21. Mexican authorities first said that Juan Salinas, Salinas’ secretary Alex Short, and Beth Williams were killed and the pilot, Paul Williams, was critically injured when their plane developed engine trouble and crashed in the rugged terrain west of Del Rio. The group was said to be flying from Puerto Vallarta to Del Rio. Williams was taken to the burn center at Brooke Army Medical Center in San Antonio. Stryker McGuire of the San Antonio Light interviewed Williams! brother, Rick McDonald of California, who saw Williams at the hospital before he died. The doctors performed a tracheotomy on Williams and he only managed to say two words, “Juan goofed.” McDonald told McGuire that Williams could not fly an airplane. The implication is that Salinas was the pilot. Rumor has it that Salinas did indeed fly, although he had never gotten around to taking out a pilot’s license. But why did the Mexican authorities say that Williams was the pilot? Was it intentional deception or simple error? McGuire says he is no longer confident that the group was flying between Puerto Vallarta and Del Rio. He also has heard that the plane did not have engine trouble and that Mexican authorities attempted to bury the wreckage. Salinas’ and Short’s bodies were reportedly burned beyond recognition. Beth Williams was Alex Short’s sister. According to McDon’ald as told to McGuire, she and her husband, a construction worker, came to Texas from Palo Alto, Calif., a few weeks before the crash because Short said that Williams could have a job building some sort of living facility on a piece of Salinas’ property in Mexico. They reportedly made the fatal trip to inspect the property. K.N. The Texas Observer