Maryland Gov. Harry Hughes today mounted an aggressive defense of his administration's handling of the state's savings and loan crisis, assigning most of the blame to industry "high rollers" and "self-dealers," and absolving himself of the responsibility for any regulatory failures in state government.
Opening a hastily called news conference with a lengthy report card on his efforts to deal with the thrift industry crisis since it erupted in May, Hughes appeared to be testing out themes he will use in his expected race for the U.S. Senate in 1986.
Hughes promised that "these self-dealers who started it will be brought to justice," and defended his administration's record in "protecting depositors and balancing that against protecting the taxpayers of this state."
Asked later how much responsibility he should assume for the regulatory failures that permitted some savings and loan owners to invest widely in highly speculative real estate ventures in violation of state regulations, Hughes said in essence that he should not be held accountable for the inaction of bureaucrats.
"I am the governor of this state and if something goes wrong within the administration . . . there are those who feel the governor is the person responsible." Asked whether he shared that view, Hughes said, "No. I feel I am responsible to do the best job I can in seeing those things don't occur, but even a governor is human . . . . I don't think anybody can point the full blame on any one person, including the governor."
Hughes' handling of the thrift crisis -- including the question of whether his own regulators were lax in failing to foresee or prevent it -- is expected to be an issue in the Senate race where the governor will likely face three other Democrats in the September 1986 primary.
The governor's statements today expanded on an orchestrated effort within his administration to use tough language in talking about the need to prosecute industry executives who contributed to the crisis. Hughes first adopted that theme at his last regularly scheduled news conference a month ago when he talked of the "unbounded greed" of some in the thrift industry. And it continued on Tuesday when his aides briefed legislators on a prospective deal under which Chase Manhattan Corp. is expected to acquire three Maryland thrifts.
But today was the first time Hughes had publicly assessed his own responsibility for the crisis, and rather than shoulder the blame himself, he deflected it onto the industry and an atmosphere of "deregulation" he said has been "emanating out of Washington" since the early 1980s.