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urns he called them “Dondos” during the oil boom of the late 1970s and early 1980s. But he was always bothered by the high fees that he had to pay to finance his projects, and he was unsatisfied with the amount of his wealth. When the federal government deregulated the savings and loan industry in 1982, he realized that the time had come to switch from borrowing to leriding. The Garn-St. Germain Act freed S&Ls from limits on the interest they could pay for deposits but maintained full federal deposit insurance of up to $100,000 per account. The bill also allowed thrifts to concentrate less on making home mortgages which had become unprofitable in the late 1970s due to fluctuating interest rates and competition from higher-yielding money market funds and more on commercial real estate ventures. And while many S&L owners used their newfound latitude prudently, others especially developers, who viewed thrift ownership as a convenient way to reduce the cost of money hungrily circled the deregulated waters. “It was like throwing meat to the sharks,” said one federal regulator. Suddenly, the government had made it possible for owners to treat their thrifts as if they were personal piggy banks. With the full faith and credit of the U.S. Treasury behind Vernon, Dixon had nothing to lose. He could gleefully gamble away other people’s money and rest assured that every penny he lost would be repaid by the government. Vernon and other S&Ls in Texas began frenetically making loans “to practically anyone who pressed his nose against the window,” says an industry consultant in Austin. It mattered little how much financial wherewithal a borrower had or whether he had sufficient documentation of his assets. No appraisal? No sweat. All that mattered was willingness to deal. The transaction might be sealed with a handshake in the hot tub outside the lending institution’s offices or in the corporate helicopter on the way to lunch across town. During the early days of this noholds-barred lunacy, Dixon bought a controlling interest in Vernon Savings & Loan, his hometown thrift. The reported $6 million that Dixon paid for his stake in Vernon didn’t come out of his own pocket. He borrowed the money from Herman Beebe, Sr., a Louisiana financier whose criminal record is uglier than a mail-order suit. Beebe’s most recent scrapes with the law stem from his attempt to defraud at least six financial institutions \(including Ver he was convicted of conspiring to defraud the Small Business Administration of about $1 million. Beebe’s holding company, AMI, Inc., of Shreveport, was the principal source of financing for Dixon’s purchase of Vernon in January 1982, according to a former Vernon consultant with whom Dixon discussed the matter. In June of that year, according to federal regulators, Dixon put Vernon under the control of one of his holding companies, Dondi Financial Corporation. In May 1983, after a series of complex stock transactions, he merged Vernon with his real estate company, Dondi Group, Inc. then became a wholly owned subsidiary of Vernon, and Dondi Financial became its parent company. According to a Texas businessmen began to complain to Wright about the way government regulators were treating them. memorandum written that month, 300,000 shares of Dondi Financial were issued, of which AMI received 99,000 shares, or 33 percent. As soon as he purchased Vernon, Dixon became “the toast of the town,” a former business partner says. And to make sure that everyone knew he had arrived, Dixon handed out $3 bills which had his likeness and signature on one side, along with the phrase “Chairman of the Bored.” On the flip side was the mock Latin phrase, “Red Tillibus Roofum,” a reference to Dixon’s trademark building style. Across the bottom appeared the inscription, “In Don We Trust.” ON SEPTEMBER 24, 1986, Craig Hall, a Dallas-based real estate syndicator, visited Jim Wright to complain of the way that the Federal Home Loan Bank Board had treated him. Hall said that a FSLICmanaged S&L in California was about to foreclose on $157 million worth of real estate loans and that he was desperately trying to adjust the loan payments. Hall told Wright that he had written 16 unanswered letters to the bank board during the summer of 1986. Wright told the Associated Press that he thought to himself, “This is going to create a panic.” So Wright called Ed Gray, who was then the bank board’s chairman. Wright told Gray that Hall’s failure was “going to cause all kinds of economic disloca tion in Texas” and asked him to discuss the matter’ with the conservator. Wright and Gray subsequently met in Wright’s office, along with their aides, to discuss Hall’s case. Gray eventually ordered a new conservator to adjust Hall’s loans, which “saved the business, saved several S&Ls, and saved the market from panic,” Wright told AP. Word of Wright’s successful intervention spread fast. Before long, he said, he learned of “other people around the country [who had] been kicked around abused by federal regulators.” In October 1986 Wright asked his trusted friend George Mallick to determine’ how bad the S&L problem had become in Texas. Mallick met with 160 thrift executives, many of whom said that their institutions were hemorrhaging because the demand for home mortgages had dropped while the commercial real estate market had nose-dived. Federal regulators, they added, were breathing down their necks, threatening to close them down. Wright was determined to rescue his fellow Texans from the zealots who were hounding them out of business an appropriate position for a politician who has received more than $274,000 in campaign contributions during the last three years from the thrift and real estate industries, according to WFAA-TV in Dallas. Wright was especially helpful to Thomas Gaubert, a real estate developer and the owner of Independent American Savings Association of Irving. Gaubert is a prominent Democratic fundraiser whose family gave $15,000 to the Wright Appreciation Fund in November 1985; until recently he was the national finance chairman of the Democratic Congressional Campaign Committee. Gaubert was being investigated by the bank board for having allegedly dissipated Independent American’s assets “through violations of regulations and unsafe and unsound lending practices.” Impressed by Wright’s success with the bank board, Gaubert asked the majority leader for help. Wright once again called dray and “begged” him to meet with Gaubert, according to several of the bank board’s attorneys. After Gaubert and Gray met, Gray took the extraordinary step of hiring a private attorney to review the bank board’s treatment of Independent American. Meanwhile, Dixon had also heard about Wright’s yeomanly efforts. By the end of 1986 Dallas’ building boom had come to a screeching halt, and the numbers were no longer adding up for Dixon. While his assets had been climbing geometrically Vernon grew 12 DECEMBER 4, 1987