Citicorp is negotiating to pay oil billionaire Gordon Getty millions of dollars to settle a dispute over ownership of the District's second-largest savings and loan, according to banking sources.
Last summer, Citicorp won the former National Permanent Bank, a financially ailing S&L, in an auction by federal S&L regulators. Getty, who lost in the auction, later filed and won a suit contending that the bidding was improper.
The proposed settlement would ensure that New York-based Citicorp can retain ownership of the District S&L, which has been renamed Citicorp Savings.
A settlement would spare Citicorp the possible embarrassment of losing control of the S&L and having to find an alternative way to open a full-service financial institution in the District.
The settlement would have to be accepted by Getty and by the federal government, which has been ordered by a federal judge to solicit new bids for the S&L. The government put National Permanent up for sale 18 months ago to find a buyer that could restore the S&L to health.
After Getty sued over the bidding process, a federal appeals court ordered the Federal Savings and Loan Insurance Corp., the federal agency that oversees the sale of ailing institutions, to accept new bids from Citicorp and Getty.
The order allowed Citicorp to continue to run the S&L until the bidding dispute was settled.
Lawyers for Gordon Getty did not return telephone calls yesterday. Neither FSLIC nor Citicorp officials would comment.
The federal government paid Citicorp $51.8 million to take over the ailing S&L, whose liabilities exceeded its assets by at least $80 million when it was put up for sale. The S&L has $1.1 billion in assets and 14 offices.
In addition, the federal government agreed to reimburse Citicorp for any losses incurred, such as those that could result if Getty eventually won control of the S&L.