Sen. Hatch Asks Democrats To Probe CenTrust Failure
WASHINGTON - Sen. Orrin Hatch is calling on Judiciary Committee Democrats to conduct hearings on the 1990 failure of CenTrust Savings Bank, Miami.
Sen. Hatch, a Utah Republican, said facts uncovered in a three-month probe of CenTrust by his staff warrant extensive hearings similar to the House Banking Committee hearings conducted in 1989 by Rep. Henry Gonzalez, D-Tex.
Sen. Hatch said he wants the Judiciary panel's subcommittee on antitrust, monopolies, and business rights to take the lead. Subcommittee Chairman Howard Metzenbaum, D-Ohio, who ruffled Republican feathers this year with hearings on the 1988 sale of Bluebonnet Savings to investor James Fail, had no immediate reaction.
A 57-page report cited by Sen. Hatch detailed dozens of contacts between CenTrust owner David Paul and lawmakers, primarily Democrats. Mr. Paul was a Democratic Party fund-raiser.
"There is no evidence of pressure on regulators by elected officials in behalf of CenTrust, except for a Dec. 17, 1987, letter to [Federal Home Loan] Bank Board Chairman [M. Danny] Wall by Sen. [Bob] Graham, and Reps. Bill Nelson and Bill McCollum on Sen. Graham's office stationery," the report said.
Sen. Graham and Rep. Nelson are Florida Democrats; Rep. McCollum, a Florida Republican.
Danny Wall's Sangfroid
The letter did not complain about CenTrust in particular, just regulation of Florida savings and loans by federal officials in general.
Mr. Wall said Tuesday that he did not feel pressured by the letter and had told investigators so. Sen. Graham and the two congressmen repeatedly have denied interfering with regulators.
The report included a charge that Bank of Credit and Commerce International helped CenTrust dupe regulators during a 1988 examination. The Justice Department has been investigating allegations that BCCI let CenTrust "park" $25 million in bonds in the bank for two months so that it could inflate its capital position, according to Sen. Hatch.