The state government board with oversight responsibility for Maryland's savings and loans was kept in the dark about risky practices at the Old Court Savings and Loan Association for a year after the industry's principal regulators began uncovering serious problems at the Baltimore thrift, according to minutes of the board's executive sessions.

It was not until April 1985, one month before depositor runs at Old Court sparked an industry-wide crisis, that the Board of Savings and Loan Commissioners learned of widespread irregularities at the thrift from the industry's private insurer, the Maryland Savings-Share Insurance Corp. (MSSIC) and the state Division of Savings and Loan, which the board governs, the minutes reveal.

The board of commissioners, a part-time group of nine appointed by the governor, has rule-making authority and the ultimate power to force shaky thrifts into state conservatorship. The minutes of the board's executive sessions shed new light on the question of who shares responsibility for Maryland's seven-month savings and loan crisis.

The crisis, prompted by reports of management problems and alleged wrongdoing at Old Court, resulted in withdrawal restrictions at 102 state-chartered thrifts and the conservatorship of four associations. More than $1.2 billion in deposits held by approximately 110,000 account holders are still frozen.

The board minutes, released yesterday by the attorney general's office in response to a public information act inquiry by The Washington Post, show that top officials of both MSSIC and the savings and loan division shared with the board almost none of their mounting private concerns about Old Court.

Minutes of MSSIC meetings, obtained previously by The Post, reveal that members of the insurer's board were alarmed about "weak operational standards" at Old Court as early as April 1984 and that the corporation initiated "cease and desist" orders against Old Court and other thrifts for repeated violations of lending rules that August.

Also in the summer of 1984, the savings and loan division completed an examination of Old Court that uncovered $7 million in NOW account overdrafts, many of them by the thrift's then-president, Jeffrey A. Levitt.

That discovery was not presented to the board of commissioners until the following April, according to the executive session minutes.

"We were all shocked in April," said W. Thomas Gisriel, a savings and loan executive who chairs the board of commissioners. "We were madder than hell that we weren't told earlier. We asked specific questions and no one would volunteer any information to us."

The minutes of the commissioners' October 1984 meeting show, for example, that Gisriel himself asked MSSIC President Charles C. Hogg II whether Old Court's many real estate joint ventures involved any self-dealing, a practice generally prohibited by state law. "Mr. Hogg stated that no self-dealing was evident . . . . " the minutes say.

Yet a $200 million civil suit filed by the state against Levitt and other Old Court principals this summer alleges that the thrift's officers and owners engaged in widespread "insider loans" throughout 1984. Those deals involved properties as diverse as Florida real estate and a fleet of airplanes.

Also at the October meeting, Hogg assured the board of commissioners that MSSIC "had actually done site inspections of various Old Court projects and has been very pleased with the product and its apparent viability." The state's suit alleges that Old Court's owners repeatedly inflated the value of their properties by selling and reselling them to partnerships they controlled.

Hogg's assurances to the board of commissioners were in sharp contrast to the internal concerns of MSSIC's own officers and board of directors throughout much of 1984, the MSSIC minutes show.

For example, at a May 9 MSSIC board meeting, Hogg said Old Court management was partially responsible for the financial problems at First Progressive Savings and Loan, a Westminster thrift where Levitt served as an officer and director starting in 1975. Levitt had resigned as a director of First Progressive in 1982, and his wife took his place.

A month after Hogg attributed some of First Progressive's problems to Old Court's management, the board of commissioners was told by both MSSIC and the savings and loan division that the "only way" to resolve First Progressive's difficulties was to merge that smaller thrift into Old Court. "Old Court is the natural candidate as the management of the two institutions are already affiliated," the minutes say. The two were merged in November 1984.

Also, the MSSIC minutes show that in July 1984 several members were "very disturbed" by Old Court's persistent violation of the insurer's regulations limiting certain categories of lending. Yet the first mention of lending rule violations does not appear until the December 1984 board of commissioners' minutes.

Division Director Charles H. Brown Jr. assured the board then that his agency would "evaluate" Old Court operations when the thrift responded later that month to the division's summer examination.

The board of commissioners' minutes appear to bolster the belief held by many state officials that the origins of the Maryland's savings and loan crisis are rooted in part in the failure of MSSIC and the division of savings and loan to share with more senior state officials their knowledge of looming problems.

The commissioners' minutes indicate they also failed that test on the eve of the crisis. At their April 4 meeting, the commissioners were given copies of a March 22 MSSIC letter to Levitt that spelled out in considerable detail the management irregularities at Old Court.

Though every commissioner was appointed by Gov. Harry Hughes, not a single one of them shared the letter with the governor, who first saw the March 22 letter almost a month later on May 1.