Settlement expected in S&L suit that brought scandal to Neil Bush

April 30, 1991|By Chicago Tribune

DENVER -- A settlement is expected this week in a $200 million U.S. government suit in the Silverado savings and loan case that may allow Neil Bush to put behind him the scandal that tarnished his reputation and proved a political embarrassment to his father.

Assuming both sides accept it, the deal could also close the Denver chapter of the younger Mr. Bush's life.

Apex Energy Co., an oil exploration company headed by Mr. Bush, announced two weeks ago that he had resigned as an officer. His family's home in an exclusive subdivision is up for sale. And Mr. Bush, 36, the third of President Bush's four sons, reportedly is negotiating with colleagues in Houston and Dallas for a new job.

A federal magistrate appointed by U.S. District Judge Sherman Finesilver is to report back to the judge in the next few days on the outcome of negotiations aimed at settling the last legal hurdle Mr. Bush faces in the long-playing case of Silverado Banking, Savings and Loan.

Magistrate Donald Abram was ordered to negotiate a settlement of a Federal Deposit Insurance Corp. lawsuit demanding that Mr. Bush and 12 other board members and officers of the defunct Silverado repay the U.S. Treasury $200 million. The FDIC says "gross negligence" by the board contributed to Silverado's failure.

On April 18, the Office of Thrift Supervision in Washington ruled that Mr. Bush had engaged in "unsafe and unsound" banking practices and had violated federal conflict-of-interest rules while serving on the board of Silverado.

The Denver-based thrift collapsed in 1988, and it is estimated that the bailout will cost taxpayers $1 billion.

After a 14-month investigation, federal regulators found that Mr. Bush had improperly voted to approve more than $100 million in loans and other deals for two men who were paying his salary at JNB Explorations Inc., an oil company Mr. Bush headed before starting Apex in 1989.

The regulators directed Mr. Bush to refrain from such conduct in the future, one of the mildest penalties that could have been imposed.

The departure of the handsome and exceedingly well-connected oil speculator and his civic-minded wife, Sharon, will leave a noticeable hole in Denver society.

The Bushes had moved to Colorado, according to an October article in Vanity Fair, in hopes that Mr. Bush could make the same killing in Denver's booming 1980s oil market that his father had made in the oil-boom days in West Texas a generation earlier. But Mr. Bush's last two business ventures ended without showing a profit, leading to speculation that he has little in assets.

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