DENVER -- After months of declarations that he'd done nothing wrong, Neil Bush acknowledged the "possibility" yesterday of a conflict when Silverado Banking, Savings and Loan Association let his major business partner partially off the hook for $32 million in loans.
In three hours of questioning under oath, Mr. Bush was initially defiant and combative with government regulators about three conflict-of-interest charges against him. But he ultimately conceded that, in hindsight, one of the decisions Silverado made while he sat on its board could have benefited his own oil company.
Yesterday's courtroom scene before an administrative law judge marked the end of public hearings in Mr. Bush's conflict-of-interest case. S&L regulators are trying to reprimand the president's son for his Silverado dealings.
The questionable incident occurred in 1986, when the man who was bankrolling Mr. Bush's oil company, Denver developer Kenneth Good, was having trouble repaying $32 million in Silverado loans. While Mr. Bush was on Silverado's board, Mr. Good asked Silverado to release $12 million in collateral in exchange for $3 million cash. Fearing a greater loss, Silverado agreed.
But at the same time, Mr. Good had secretly agreed to put up to $5 million into Mr. Bush's oil company -- a signed agreement that Mr. Bush never told his fellow board members about, even though he abstained from voting on the agreement.
Yesterday, Mr. Bush explained, "If there had been a firm commitment by Ken Good in September to provide $5 million in funding, and I had reason to believe that he was going to be good for that, then, obviously, I would have made a disclosure. . . .
"But there was no need to make that disclosure because there wasn't a firm agreement, and I was just hoping he'd be able to come through with the funds."
But, asked an attorney for regulators, wouldn't Silverado's actions have made it easier for Mr. Good to invest in Mr. Bush's oil company?
"I never viewed it that way," Mr. Bush replied. "I don't know. The answer is, I don't know."
Later, the attorney asked Mr. Bush, from today's viewpoint, didn't Silverado's decision help Mr. Good pump money into your oil company?
"I can only very vaguely come to the same conclusion as you have," Mr. Bush replied, but then agreed it was "a possibility."
After Silverado modified his loans, Mr. Good put close to $1 million into Mr. Bush's company, part of the $3 million total he invested in Mr. Bush's oil ventures; ultimately all of Mr. Good's loans from Silverado went sour.