Witness says bank knew of Bush's ties to loan

September 26, 1990|By New York Times News Service

DENVER -- The government's leadoff witness at the hearing on conflict-of-interest charges against Neil Bush yesterday supported Mr. Bush's contention that his fellow directors at a Denver savings and loan knew he had an interest in a partnership that was given a $900,000 line of credit.

But the witness, Russell M. Murray, an executive vice president of the Silverado Banking, Savings and Loan Association who recommended financial transactions to the board, said that if he had had all the details of the transactions, he would have sought the advice of counsel before recommending the line of credit.

He did not say what details he had lacked.

The testimony was given at a public administrative hearing on charges brought by the Office of Thrift Supervision, which seeks an order requiring Mr. Bush, the president's son, to "cease and desist" future conflicts of interest should he serve on federally regulated banks.

Silverado failed in late 1988 at a cost to taxpayers of $1 billion.

The younger Mr. Bush, who denies any wrongdoing, is fighting the order. He did not attend the hearing and is scheduled to testify as the final witness of the administrative hearing later this week.

The other witness yesterday, Michael Wise, chairman of Silverado, was allowed to appear in the chambers of Administrative Law Judge Daniel J. Davidson. But he invoked his Fifth Amendment privilege against self-incrimination 14 times, according to court transcripts.

Mr. Murray's statements focused on Neil Bush's role in extending a $900,000 line of credit to a partnership he had formed with Denver developer Kenneth Good, a large Silverado borrower and preferred stockholder, for a joint oil exploration in Argentina.

Mr. Murray's concern about the line of credit appeared to support the government's charge that Mr. Bush engaged in "an unsafe and unsound practice by failing to make adequate disclosure of the nature of the proposed transaction and his interest therein."

But under cross-examination by James E. Nesland, Mr. Bush's lawyer, Mr. Murray testified that he had had several conversations with Mr. Bush about the transaction and had discussed it with Mr. Wise.

The hearing, in the federal courthouse, attracted a Senate candidate and several protesters, one of whom carried an outsized "Bush Family Flag" made of prison stripes.

Josie Heath, Democratic Senate candidate in Colorado, told reporters that Mr. Bush proved that "if you have money and power and access, the rules do not apply."

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