Judge Orders FDIC To Pay $72 Million ToCover Legal Costs
WASHINGTON - (08/26/05) In a strongly worded ruling, a federaljudge in Texas has called the Federal Deposit Insurance Corp.(FDIC) a "corrupt agency with corrupt influences on it, andhas awarded Houston financier Charles E. Hurwitz $72 million indamages. The money is to reimburse Hurwitzs legal fees in a10-year lawsuit against FDIC and what the judge ruled were effortsto gain control of more than 3,500 acres of forest land in NorthernCalifornia. At issue was the failure of United Savings Associationof Texas, a Texas thrift that became insolvent in 1988 and whichHurwitz controlled. The FDIC filed suit against Hurwitz in 1995,seeking more than $800 million to reimburse the insurance fund. Ina 131-page ruling, Judge Lynn N. Hughes said FDIC never should havebrought suit at all, and claimed FDIC was acting in concert withenvironmental groups, members of Congress and the Clintonadministration, in an attempt to get Hurwitz, whose Pacific LumberCo. owned the large parcel of endangered redwoods in NorthernCalifornia, to give up title to the land in exchange for the moneyFDIC was seeking. The FDIC said it plans to appeal.