Subject THE CIA ROLE IN THE S+L CRISIS Written 416 pm Feb 25, 1991 by christic in cdpchris

Master Index Current Directory Index Go to SkepticTank Go to Human Rights activist Keith Henson Go to Scientology cult

Skeptic Tank!

Subject: THE CIA ROLE IN THE S&L CRISIS ----------------------------------------------------------------------------- Written 4:16 pm Feb 25, 1991 by christic in THE CIA ROLE IN THE SAVINGS AND LOAN CRISIS Project Censored: Nomination for the "Ten Best Censored Stories of 1990" It is now estimated that some 500 billion to 1.4 trillion taxpayer dollars will be needed to bail out the savings and loan crisis. One very obvious question, which has not been asked by the major news media, is what happened to so much money? At least one investigative journalist, Pete Brewton, of the Houston Post, believes he has the answer. On February 4, 1990, Brewton wrote "During an eight-month investigation into the role of fraud in the nation's savings and loan crisis, The Post has found evidence suggesting a possible link between the Central Intelligence Agency and organized crime in the failure of at least 22 thrifts, including 16 in Texas." It was the first in a series of S&L articles by Brewton that found links beween S&L's, organized crime figures, and CIA operatives, including some involved in gun running, drug smuggling, money laundering and covert aid to Nicaraguan contras. If S&L funds went to the contras or other covert operations it would help explain where some of the money went. In his March 11, 1990, article, Brewton even suggested links between President Bush's son Neil and the CIA/organized crime figures: "A failed Colorado savings and loan whose board of directors included a son of President Bush was part of an intricate web of federally insured financial institutions that had business links to organzied crime figures and CIA operatives, The Houston Post has learned." Despite the blockbuster nature of Brewton's exposes, the major news media have not been quick to follow-up. As Robert Sherrill points out in his extraordinary analysis of the S&L crisis in an unusual single subject issue of The Nation (11/19/90), "Brewton's stories have not exactly stirred the national press to action." The strange silence on the part of the press led Steve Weinberg, former executive director of Investigative Reporters & Editors, to investigate the accuracy of Brewton's charges. Weinberg raises two key questions: if Brewton's information is wrong, what should other journalists be doing to set the record straight, and if he is right, why have most news organizations failed to assign their own reporters to the scandal? C. David Burgin, The Post's executive editor, explained why The Post has devoted so much space to such a controversial issue aparently without conclusive proof. "At this juncture, at least, the 'smoking gun' probably will have to be found by Congress or the Justice Department, which have subpoena power....Meanwhile, taxpayers somehow will have to foot the bill for these enormous losses. The Post will continue its investigation and hopes at the same time the national press, in the public's interest, will take a harder look." After reviewing Brewton's documentation and interviewing a number of journalists, some of whom reject Brewton's thesis totally, and others, mostly alternative journalists, who support it, Weinberg concludes that the national press should take a harder look at his charges. Project Censored also agrees that this undercovered aspect of the S&L issue deserves the national media's critical attention. SOURCES: THE HOUSTON POST, 2/4/90+, series of articles by Pete Brewton; THE NATION, 11/19/90, "The Looting Decade," by Robert Sherrill, pp 589-623; COLUMBIA JOURNALISM REVIEW, Nov/Dec 1990, "The Mob, The CIA, and the S&L Scandal," by Steven Weinberg, pp 28-35. End of text from ----------------------------------------------------------------------------- Written 4:14 pm Feb 25, 1991 by christic in THE S&L CRISIS: THE SOLUTION IS WORSE THAN THE CRIME Project Censored: Nomination for the "Ten Best Censored Stories of 1990" An early estimate of the cost to taxpayers to bail out the savings and loan industry was $155 billion. More recently, a Wall Street Journal correspondent suggested a $1.4 trillion figure. But the most "acceptable" figure for the bailout appears to be $500 billion. To put that $500 billion in perspective, it helps to realize that the entire cost of World War II, in current dollars and including service-connected veterans' benefits, is about $460 billion--or $40 billion less than the S&L bailout. The cost of the Vietnam war, including benefits, was $172 billion; Korea was $70 billion; World War I was $63 billion. The Civil War was $7 billion. The combined assets of Prudential, Metropolitan Life, Equitable Life, Aetna, Teachers Insurance, New York Life, Connecticut General, Travelers, John Hancock and Northwestern Mutual don't add up to $500 billion. The combined 1988 profits of all the companies on the Fortune 500 list added up to just $115 billion. And the combined 1987 budgets of all 50 states didn't add up to $500 billion. In fact, the total federal expenditures on one of the nation's most widespread and tragic problems--the homeless--is little more than one-tenth of one percent of the amount we'll spend to bailout the savings and loan industry. This bailout was engineered by the Resolution Trust Corporation (RTC)--the government's misnamed S&L caretaker which is engaged in a massive giveaway that will make Teapot Dome look like a demitasse cup. The RTC is the nation's largest operator of financial institutions and, according to The New York Times, "quickly becoming the biggest financial institution in the world, the largest single owner of real estate, the largest liquidation company and the largest auction firm." The RTC solution includes a little known $500 million in outside legal fees and $37 million in administrative costs. And the RTC was established without any meaningful public debate nor with any serious consideration of alternatives. Here's just one example of the RTC solution: an Arizona insurance executive with a history of legal and regulatory problems was allowed to buy 15 involvent Texas savings and loan associations with $1000 of his own money and $70 million of borrowed money and in turn was promised $1.85 billion of taxpayers' money in federal subsidies. Commenting on this revelation, Senator Howard Metzenbaum said "In all my years in public office, I have never seen such an abandonment of public responsibility ...". Remember, this case was not part of the S&L crisis, but part of the so-called solution. One can't expect Congress to be seriously concerned about any solution considering that S&Ls gave $45 million to congressional candidates during the past three elections, including more than $1 million to members of current congressional banking committees. What has taken place involves fraud, malfeasance, misfeasance, and nonfeasance of a scope never seen before. No war, no defense program, no social program, no other scandal has ever cost what this will cost. And yet the media, absorbed in human interest aspects of the crisis at best, relegate important S&L stories to the business pages despite their enormous effect on every American. SOURCES: THE PROGRESSIVE REVIEW, "No-Fault Capitalism Meets Lemon Socialism," August 1990, by Sam Smith; WALL STREET JOURNAL, 8/9/90, "Viewpoint: Biggest Robbery in History--You're the Victim," by Michael Gartner, p A11. End of text from Source: Peacenet Via New York Transfer News 718-448-2358, 718-448-2683 --- [ This file has travelled through the Socialism OnLine! BBS at +1-719-392-7781, 24 hours, 300-9600 bps HST/MNP/V42bis, on its way to you, the reader of this file. Please share any information you have about "big brother." Venceremos! ]


E-Mail Fredric L. Rice / The Skeptic Tank