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111111111AI. 1.11 the jury found him not guilty. It is understood that Gaubert’s net worth, which reached $50 million in the 80’s, has now declined to $20 million. Divorced, in part because of strains caused by his notoriety and troubles, he lives with a woman friend and his mother in a castle-like mansion on the sharp curve of a creek in one of the best sections of Dallas. He scours every paper and magazine from front to back for news on the S&L collapse, “because no one can see this situation like I can because of what I’ve been through.” He said he has spent $2.5 million on lawyers over the last four years fighting back against the feds, and he is not through yet. Gaubert is a confident and loquacious man who charges along in discourse like a dervish, pell-mell, spontaneously, pouring out story after story of his travails with federal authorities. He had made mistakes, he said, but “never with intent, never with intent” to make illegal gains. He came across during a long day and evening as a compassionate person, genuinely concerned about poor and ordinary people, but ready to fight almost whatever way he might have to in order to win, and tormented and all but exhausted by his conviction that he has been unfairly treated. Intelligent, experienced in business, emotionally unguarded, he is also very, very angry, and sometimes his sentences jolt his listener like hard jabs. “The government’s just tryin’ to put people in jail to blame ’em,” he said. “They’ve decided who the criminal is and they’re trying to find out what crimes he’s committed.” He called a federal regulator in Iowa “a blood-sucking parasite.” By name, he called officials of the Bank Board, men and women, Nazis and members of the SS. “It’s a banking problem, too,” he said in another flurry. “I mean, money don’t know who it belongs to! A piece of real estate doesn’t know if it’s in a bank or if it’s in a savings ‘n loan. We’ve lost every major bank in this state. I don’t see any article about let’s put the bankers in jail!” Talking in surges as he surged his Chevrolet through a surprise snowstorm last spring, Gaubert recalled his grievances against the management team with whom the regulators had replaced him at his company . “They ran it into the ground, and they mismanaged it, and we’ll be able to prove that if we ever get into a court of law,” he declared. “The government just says ‘solemn immunity, solemn immunity, solemn immunity,’ and the federal judges just say ‘Boom! rubber stamp, boom! rubber stamp.’ My lawyers tell me that if we can ever get to a federal court with our lawsuit, we are going to make history and we’re going to make law. The problem is those Nazi federal judges in this town throw those suits out.” In October the Fifth Circuit Court of Appeals in New Orleans granted Gaubert the right to sue the government to recover $25 million. Gaubert does not go along with those who award Ed Gray the white-hat in this whole sorry affair. “Gray’s agenda,” Gaubert said, “was coverin’ up the tremendous mess he had created in those two years” and his desire to have the proposed $15 billion S&L recapitalization bill passed “and he blames Jim Wright for his not getin’ that.” Gaubert attributes Wright’s on-again, offagain attitude toward giving the Bank Board the authority to borrow the money to the fact that in 1986, while Gray was telling Wright “it was a $15 billion problem, I was tellin’ the Speaker it was a $100 to a $200 billion dollar problem.” \(Eventually, with Wright’s support, the Bank Board was What percentage of the losses from the S&L collapse was caused by fraud? This question, which I asked Tom Gaubert with my tape recorder spinning, detonated him again. “It’s gonna be a $200 billion problem,” he said, striding back and forth in front of a crackling fire in a small reading room in his home. “If you stole $200 billion, how would you spend it and where would you spend it? If it was $1 billion, I mean if you had McBirney, and me, and Don Dixon, every other name you’ve heard, how long would it take us to spend a billion dollars, if we stole it, we really stole it? Or even a hundred million dollars. It’s just ridiculous, it’s stupid it’s ludicrous! to blame this on dishonesty or fraud. I mean, you couldn’t steal that much, and if you stole it, what would you do with it? Put it in suitcases? You couldn’t have suitcases, you’d have to have truckloads! “Sure, sure there was dishonesty,” Gaubert said. As for his own savings and loan, though “we never had any lake houses, never had any boats, never paid a dividend, the last year we paid bonuses was ’84 when we really had strong earnings.” When it was under his control, he said, IA had no airplane. He owns a jet personally, “and the savings and loan never paid a dime, I never got reimbursed a dime for it.” The Capitol/Iowa case concerned Gaubert personally and had no connection with Gaubert’s company other than giving the regulators the basis on which they removed Gaubert from IA. As of this writing the S&L regulators have filed no complaint against Gaubert concerning the company. Documents on file at the Bank Board, copies of which I have read, describe a number of transactions at IA when Gaubert was running it and interpret these deals in ways that could mean that more trouble lies ahead for him. $30 Billion Lost in Texas Even though the S&L industry was collapsing with the nation watching, representatives of the industry and members of Congress, similarly alarmed about the consequences, appear to have collaborated to do as little about it as possible until this year. The industry was afraid its institutions would be burdened with large bonding obligations or huge new insurance charges that would hurt profits, and in the era of huge budget deficits and “no new taxes,” members of Congress did not want to have to make good tens or hundreds of billions of dollars of losses. At every stage from 1982 through 1988, to avoid paying the depositors of the failing thrifts, Congress improvised, delayed, and passed the problem to the future, until finally the losses were running a billion dollars a month. According to Ed Gray, in 1987 “the presidents of the two biggest state S&Ls of the United States said to me that the industry should put up only $5 billion in bonding authority so that the problem would become so big that the Treasury would have to pay it.” Gray did not identify the individuals in question. He said he also believes the same reasoning was the actual strategy of William O’Connell, the president of the U.S. League because “O’Connell was saying we had to wait for another Administration.” as head of the Bank Board, assured Congress on numerous occasions in 1988 that the Board had enough money to handle the situation, at one point declaring that the funds Congress had provided would last another three or four years. “It’s a coverup,” fired back House Banking Chairman Gonzalez, who had also called for Wall’s damn well that he didn’t have the resources,” Gonzalez told me. Probably it will never be known how much of the losses will have been caused by fraud. If the barrel of the Texas industry contained a thousand apples, Art Leiser told me in Austin, “I would say maybe 20 were rotten.” The few bad ones, though, caused 14 DECEMBER 15, 1989