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“Some of those deals looked like Santa Claus passed out some of the goodies on Christmas eve.” Gonzalez repeated his recommendation that Wall resign for having consistently reassured Congress that his agency had the resources it needed to deal with the problem, which now a few months later is running up toward $150 million in expected taxpayer costs. Seven members had come to the city for these hearings. These included only one Republican, Rep. Steve Bartlett of Dallas, but he represented his ideas and his party’s interests with characteristic subtlety and finesse, and the displayed relationship between him and Gonzalez was amiable, respectful; unexceptionable. The two-day parade of witnesses in San Antonio included the chairman of the Federal Deposit InsurCurrency, officials of the Government of the Federal Home Loan Bank Board and examiners in Dallas, the Texas attorney general, treasurer, and agriculture commissioner, former and present Texas Savings and Loan commissioners, a scholar on savings and loans, some people from the industry, and just plain people who had lost their homes or represented the poor. My subject, however, is the Chairman. At one point in the questioning of witnesses, Gonzalez referred to “the new form of homelessness, where you have families a parent, one child or two, sleeping in a car under an underpass or in a park.” In Washington he has introduced House Bill 1 would establish a National Housing Trust Fund that would finance single-family homes for first-time homebuyers at a fixed interest rate of six percent on up to a maximum mortgage amount of $104,000. Gonzalez has $4 billion in mind for this fund, and he also wants the huge stock of living units the government has taken over from the insolvent S&Ls made available to the Trust Fund, instead of selling those homes at distressed prices. During the San Antonio hearing, Frederick Wolf of the GAO told Gonzalez there is “absolutely no reason” why the Department for Housing and Urban Development could not take over the living units that are held by insolvent S&Ls. H.B. 1 would also provide $500 million for home ownership and ,maintenance for lowand moderate-income families and additional funds for rural housing and various other federal programs for the prevention of homelessness. President Bush, pursuing the “no new taxes” demagoguery that has characterized the Reagan Era and now dominates the current Presidency, proposes to fund $50 billion of the cost of the S&L losses by borrowing the money. Gonzalez announced during a pertinent point in some testimony that his committee staff projects that if the Bush plan for borrowing is adopted, “there will be an overall [additional] cost to the taxpayers of $138 billion.” During questioning of George Barclay, who has succeeded to the directorship of the disaster-area FHLB, the Dallas region, the Chairman spoke very slowly as he was thinking, with no sense of either hurry or showmanship. Barclay was defending the Southwest Plan deals of 1988, but Gonzalez’s thoughts had run to the identification of the federal regulators of banks and S&Ls with the industries they were regulating. The FDIC, he said, “has been criticized throughout its history as the creature of the industry. It gets no tax money; it lives on the fees paid by the banks.” Likewise, Gonzalez continued, the S&L regulators were part of the industry they regulated. Furthermore, he.-said, “we’re going to have to have some restrictions on undue political influence by members of the Congress.” He had, in fact, conducted, earlier in the year, hearings in San Francisco on the heavy political immersion of five U.S. Senators in the case of Lincoln Savings out there, in the regulators’ handling of which, he said, “money did talk.” He wanted, Gonzalez said, “an impermeable regulatory body.” Texas Commissioner of Agriculture Jim Hightower, during his testimony, pointed out that in one of the Southwest Plan deals, bankrupt S&Ls were sold out to a Taiwan company named Pacific USA. “Obviously,” Hightower said, “Pacific USA knew something the people in Muleshoe didn’t know. Somebody told somepin’ to Pacific USA.” “I ran statewide,” Gonzalez responded in good humor to Hightower’s down-home reference, “and I still have correspondence with someone in Muleshoe.” “Is Muleshoe in your district?” a Congressman from California asked Gonzalez. “No,” Gonzalez replied, “I think it’s closer to Mr. Bartlett’s.” Rising to the friendly taunt, Bartlett remarked: “Some people in my district own it.” The evening between the two hearings, Bertha and Henry Gonzalez gave a reception at their solid, two-story home on West Kings Highway on the north side of the city. I have been to a few parties here, and always there have been dozens or hundreds of people inside and out in the yard. The Gonzalezes are a big family, and they know how to give good parties. This time, too, Bertha on short notice had arranged for the maybe 80 people who were there to have good Mexican food on paper plates, with beer if they liked. Gonzalez showed the Comptroller and a couple of the. Congressmen around, pointing out the fine molding they don’t put into new houses these days, taking them into his big library lined with his books and strewn all about with papers. He told them, too, what he is really proud of: that he and Bertha bought this house a long time ago for $36,000, and in 1982 they made their last payment on it. It’s all theirs. EVENTS THAT SERIOUSLY affect individuals occur at such hearings as those in San Antonio, and without going into details I will characterize two that happened during the second day. The first concerned an accusation that a member of the national FHLBB had shopped a bid for one of the 1988 deals. In the committee’s arrangements for eliciting the truth of this charge, the steel of the Chairman could be perceived at work. The accusation was made by a witness who spoke just before the board member was to testify. The board member, in his turn, emphatically and I thought convincingly countered, and perhaps refuted, the charge. Perhaps Gonzalez thought so, too; he said, “I am very sensitive to assaults on reputations.” When the accuser, from a position to one side, to which he had repaired, insisted on repeating and extending his charges, Gonzalez would not tolerate it. “At this point I will declare you out of order,” he said. That was that. In the second such personally serious event, Gonzalez read to a witness, Stuart Root, former director of the Federal Savings and Loan Insurance Corporation \(FSLIC, from a former chairman of the national FHLBB asking that, as a favor, Root help him out collecting a $135,000 bill involved in the failure of a financial institution with which the letter-writing former chairman was concerned. Root told Gonzalez he had turned the letter over to subordinates “to find out what were the circumstances,” but Gonzalez was having none of that. When he is indignant about something he is rough and confrontational. The former chairman who had written Root “knew where to direct an inquiry in the regular course of business. . . . You have a very cozy relationship with a former chairman,” Gonzalez told the witness, looking straight at him. Root and a colleague seated beside him advanced some considerations for the defense, whereupon Gonzalez philosophized about public service and lectured them both on “the sustained coziness of the relationship of the regulator and the industry.” Yet, he could relent. During the questioning of the FHLB board member, whose name is Roger Martin, Gonzalez alluded to a statement which Danny Wall made last year that the feds at the Bank Board possessed a million acres of land in Texas about the value of which they were so uncertain, they valued it at zero. “He said a million acres. That’s a lot of land,” Gonzalez said. “Even in Texas.” “But it’s good land,” Martin replied, easing into the good humor of it. “Sure it’s good land,” Gonzalez said. “All Texas land is good. Even in Dallas.” However, when a spokesman for the federal S&L insurance fund started berating the GAO people for their criticisms of his agency’s performance in the S&L mess, the Chairman’s steel flashed again. “Up to 6 MAY 5, 1989