The chairman of a Senate Judiciary subcommittee vowed yesterday to subpoena a lobbyist with strong Republican Party ties who helped an Arizona insurance executive secure $1.8 billion in federal assistance to acquire 15 insolvent Texas savings and loan institutions in 1988.
The lobbyist, Robert J. Thompson, earlier had served as aide to then-Vice President Bush.
Sen. Howard M. Metzenbaum (D-Ohio), who alleges that the Arizona insurance executive, James M. Fail, did not meet capital and ethical standards for acquiring insolvent thrifts, said that "one wonders why this person got special treatment."
But a lawyer for the savings institution run by Fail sharply criticized Metzenbaum, saying in a statement that the senator had "exceeded his subcommittee's jurisdiction" to "further a partisan agenda."
Metzenbaum said that in pressing the examination of the 1988 thrift deal the government made with Fail, his subcommittee would focus on the lobbyist.
"Thompson's name is obviously front and center," Metzenbaum said.
According to a document released yesterday by Metzenbaum's subcommittee on antitrust, monopolies and business, Thompson failed to pay any interest or principal on a $150,000 loan that had been guaranteed by Fail's Arizona insurance company.
Moreover, according to the document, the insurance company was unable to collect any collateral for the loan.
Lance Morgan, a spokesman for Thompson, asserted that Thompson is paying market rates on two loans and that both loans are current.
Morgan, who works for the public relations firm Robinson, Lake, Lerer & Montgomery, would not comment on the document produced by Metzenbaum's subcommittee.
Arizona insurance regulators also said in a telephone interview that a week ago they installed a supervisor at Fail's insurance company after raising questions about the company's financial health.
The regulators said that the company was $15 million "financially impaired." That would give the insurance company a negative net worth.
Because the examination is still in progress, Fail still has an opportunity to show that the insurance company has adequate assets.
Gay Ann Williams, a spokesperson for the Arizona department of insurance, said yesterday that investigators also were looking into the loan to Thompson.
Thompson, who served as congressional liaison for Bush when Bush was vice president, lobbied with the Federal Home Loan Bank Board to win government assistance for Fail.
Previously, a subsidiary of a company owned by Fail had entered a guilty plea in a 1976 Alabama fraud case.
Fail's lawyers say that information was fully disclosed to the bank board, but in testimony yesterday, Wayne Frena, an official with the Federal Home Loan Bank in Dallas, said that Fail had not disclosed the guilty plea.
Ten days after Fail acquired the insolvent thrifts, now consolidated into a firm called Bluebonnet, an insurance company he owned called Harvest Life guaranteed a loan to Thompson by a Tulsa bank.
In addition, the subcommittee produced a document indicating Fail borrowed $10 million from a Mississippi thrift to meet payments for his acquisition of the Texas thrifts.
But the document indicated that Fail had not paid a $200,000 fee to the Mississippi institution, which has since been found insolvent and seized by the government.
Morgan, who is also Fail's spokesman, declined to comment on that loan and a lawyer for Fail did not return calls yesterday.