Did Reagan Team Order Cover-Up Of S&L Crisis?
WASHINGTON - A television documentary airing tonight asserts that the Reagan administration ordered financial regulators to lie about the dimensions of the savings and loan debacle until after George Bush was elected President.
The Public Broadcasting Service's "Frontline" program identifies George Gould, the former deputy secretary of the Treasury for finance, as giving the order to obfuscate. Mr. Gould on Monday termed the report "ludicrous."
In the documentary, Roger Martin, a former member of the Federal Home Loan Bank Board, and his assistant, Elise Paylan, say they were told in 1988 that Mr. Gould had instructed Bank Board Chairman M. Danny Wall "to lie about the numbers."
Seidman Cited as Source
Their informant, they said, was L. William Seidman, until last week the chairman of the Federal Deposit Insurance Corp. Mr. Seidman, Ms. Paylan contends, was also asked by Mr. Gould to cover up the numbers, and he refused.
Mr. Wall's overly optimistic reports delayed the bailout and thereby doubled its cost, according to the documentary.
Mr. Seidman tells Frontline reporter Robert Krulwich that he does not recall the conversation with Mr. Martin, nor any such request from Mr. Gould, who was working under Treasury Secretary James Baker. Mr. Baker was Mr. Bush's campaign chairman.
"The only pressure Treasury exerted was to have Mr. Wall share more information with us," Mr. Gould told the American Banker.
There are no heroes in the S&L bailout depicted by Mr. Krulwich - not even Mr. Seidman, who laments at one point that the RTC's inventory of repossessed assets includes a library of pornography.
Asked by an incredulous Mr. Krulwich what he will do with the library, Mr. Seidman responds, "Sell it!"
RTC employees are shown in three cases selling buildings for less than they were originally offered.
In one instance, the RTC sells an apartment building to a partnership controlled by the man who purchased the yacht Sequoia for President Ronald Reagan, even though the Dallas Housing Authority offered $300,000 more. In another case, a man who initially bid $4 million for a building gets it several months later for just $2.5 million.