ustxtxb_obs_1994_08_19_50_00011-00000_000.pdf

March 26th, 1990 CONFIDENTIAL Mark I. Rosen Deputy General Counsel John V. Thomas Associate General Counsel Lauck Walton Counsel Mark A. Blanchietti Hollander / Attorney her own. While investigating the failure of Metropolitan Savings and Loan, she had discovered a loan to George Bush Jr., which was in arrears. With the specter of Neil Bush’s Silverado scandal only one state away, she decided to investigate. She was stopped cold in her tracks and told in no uncertain terms that she was not to interview the officers of the failed S&L and specifically not to ask about George Bush Jr. While RTC reaction was swift and sure, the irony lies in the fact that the George Bush Jr. in question was not the then-President’s son. This incident, along with constant complaints about procedure, or lack thereof, eventually caused Simmons to leave the RTC. She moved back into the private sector in Dallas and declined to talk about her experiences. Hackbart retired, taking his pension in a lump sum, and works in the Dallas area. Hollander left’ Washington, and went to work as a ski instructor. He is attempting to get back into the law, still confused as to what it was exactly that he did wrong. He now lives in Southern California. Many of those involved in the Texas investigations have gone on to rebuild their lives and careers. Their files lie dormant in boxes and crates scattered in rental storage spaces around Dallas as mute testimony to what former RTC senior lawyer Thomas J. Burnside referred to in the New York Times on July 23, as “The Great Texas Bank Robbery.” Burnside wrote, “But the failures of the RTC’s ‘cleanup’ were too purposeful to be just gross incompetence. Anytime a highprofile lawsuit is brought against a powerful figure, it is politically risky and expensive. The agency’s leadership set up a system to avoid that risk; the incentive was for lawyers to perform a listless overview of bank records rather than vigorously investigate wrongdoers. And there was hardly any political pressure for things to change.” Paper Trails Editors’ Note: What follows is almost the complete text of a March 26, 1990, memo that Mark Hollander wrote to FDIC Deputy General Counsel Mark I. Rosen, Associate General Counsel John V. Thomas and Counsel Lauck Walton: In accordance with your recent request, this memorandum is written to embody the information which I have orally transmitted concerning United States Senator Phil Gramm. In my prior preliminary written briefmg with respect to the above mentioned institutions, dated January 13, 1990, I noted the following “…Testimony has also revealed that Jerry Stiles, through his associated builders and interim lending, remodeled [and/or] built a home for Sen. Gramm in Maryland with, it appears, a portion of the funds being supplied by “HSA” [Hallmark Savings Association]. It does not appear that Sen. Gramm repaid the institution for the entire benefits which he received.” Jerry Stiles, a close personal friend of Sen. Gramm, used a corporate jet belonging to the depository institution to fly Mr. Ronnie Hawthorn, a subcontractor, along with materials and other workers, to Maryland…. It appears that Mr. Hawthorn was paid twenty-five thouIt appears that Sen. Gramm paid approximately $63,000 \(Sixty-Three Thousand Jerry Stiles [sic] personal accountant is Mr. Christopher White. It further appears that the transaction was effectuated through a deposit account which Jerry Stiles maintained at Deposit Guaranty \(formerly American National Bank in which Jerry Stiles had an ownership interest and was formerly the controlling person in all busiSen. Gramm apparently learned that the FDIC was investigating this matter in connection with the failure of Hallmark Savings Association, et al. \(As I have previously indicated, I personally took the investigative statements under oath of many key players, including Jerry Stiles. These statements have been transmitted to you. Mr. Stiles was represented by counsel and he did receive and sign the original copy of this statement. He was provided, through his counsel, with a copy of his statement. It is possible that a photocopy of this statement was forwarded to Sen. tion, Sen. Gramm, through his Washington D.C. attorney, Jim Hamilton, contacted an FBI agent and stated that Sen. Gramm wanted…to discuss this matter. As I have also previously informed you, both Investigator Jeffrey A. Ayres and myself were planning on attending this meeting. The meeting, however, never took place. Apparently, Sen. Gramm was somehow able to secure approval of this and all related transactions from the United States Senate Ethics Committee. Consequently, Sen. Gramm has apparently decided to take no further action regarding this matter. In light of the foregoing possible misuse of funds and assets of Hallmark Savings Association, a federally insured institution in conservatorship, and its affiliates coupled with the fact that Sen. Gramm met with Jerry Stiles in Washington, D.C. concerning this institution just prior to its placement into conservatorship, I have repeatedly recommended a full and comprehensive investigation of the relationship and transactions of Sen. Gramm with Hallmark and its affiliates. Again I reiterate this recommenda tion. It is my opinion that as attor neys of a governmental agency we have an affirmative obligation to investigate all possible misuses of funds in federally insured institutions… To date no action has been taken on this as well as many other extremely important matters. This case has not been reassigned to any attorney. Moreover, despite the significant amount of money to be recovered as well as the far-reaching evidence obtained in connection with the substantial accountants’ liability action, the investigation of his institution appears to have been “frozen.” I am deeply concerned that irreparable harm is occurring to our ultimate position in these cases … Hallmark Savings Association, * 8600, Plano TexasIn Conservatorship North American Savings Association, * 8601 San Antonio, Texas In Conservatorship New Braunsfels Savings & Loan Association, * 8599, New Braunsfels, Texas In ConservatorshipRequested Supplemental Information Regarding United States Senator Phil Gramm THE TEXAS OBSERVER 11