Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, June 15, 1990 TAG: 9006150340
SECTION: NATIONAL/INTERNATIONAL PAGE: A-11 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
A torrent of criticism greeted Treasury Secretary Nicholas F. Brady after he warned the House Banking Committee that the thrift cleanup likely would run out of money before the end of the year.
Brady, testifying three weeks after the administration doubled its estimate of S&L cleanup costs to a range of $89 billion to $132 billion, said the administration would need from "about $30 billion to slightly over $50 billion" more in the next fiscal year alone.
Panel members, clearly worried about a backlash from angry constituents, attacked the administration for delays in prosecuting the growing backlog of fraud cases and selling the mountain of sour loans and problem real estate inherited from failed thrifts.
"I think we're sitting on a volcano of public opinion on this issue," said Rep. Richard E. Neal, D-Mass. "I hear continuously at the corner store and the supermarket and at the gas station, `When are you guys going to do something about putting the crooks in jail?' "
Neal's criticism spurred Housing Secretary Jack Kemp, along with Brady a member of an administration board overseeing the bailout, to warn Democrats not to make S&Ls a partisan issue.
"I think there's enough blame to go around and I just hope this is not going to erupt into the kind of political attack . . . on either side," he said.
Rep. Charles Schumer, D-N.Y., said President Bush has paid scant attention to the S&L cleanup and has allowed it to founder.
"The first one . . . there was plenty of blame to go around. . . . In this second S&L crisis . . . We've heard more from the president about broccoli than we've heard about this crisis," he said.
Even Republicans, including Rep. Chalmers Wylie of Ohio, the senior GOP member on the panel, joined in the assault.
"The Department of Justice's efforts to prosecute thrift fraud are well intentioned but fall way short of the mark," Wylie said.
Brady defended the administration's performance, pointing to Wednesday's 38-count indictment in Texas of Don Dixon, former owner of the collapsed Vernon Savings and Loan Association.
He said it took four years of work before Dixon could be charged and said 17,000 suspected cases of fraud have been referred to the Justice Department.
"It isn't like a bank robbery where a guy comes in with a gun . . . and there's cameras taking pictures of him. When you're talking about bringing one of these [white collar] people to justice, you're talking about an enormous amount of time with accountants, lawyers and files," he said.
by CNB