Except for the blazing sunshine that promised an unseasonably hot day, May 9, 1985, dawned bright and trouble-free for Lester Singer, Joseph H.H. Kaplan and Harry Hughes.
Singer, a Baltimore County retiree, had just put down a $50 deposit on a camper for a long-awaited cross-country trip with his wife of 43 years. Kaplan, toiling in relative obscurity as a Baltimore Circuit Court judge, was set to hear routine cases on hospital rates, the removal of a child's legal guardian and a criminal's guilty plea.
And Hughes, Maryland's popular governor who was considered a shoo-in for a U.S. Senate seat the next year, was touring Israel in the afterglow of a successful session with the General Assembly.
The lives of those three Marylanders were changed dramatically that Thursday when scores of depositors, including Singer, panicked at news of bad management practices at Old Court Savings & Loan Association and lined up at the Randallstown branch to withdraw $15 million in savings. Nothing has been quite the same for them -- or for thousands of other people across the United States -- since that first day of a crisis that rattled the underpinnings of state government and several national financial industries.
"I have cooled off to the point to realize other people were less fortunate than me," said Singer, recalling the 11 hours he stood in line at the Old Court branch seven blocks from his home.
"But I still get steamed up," added the man who had to cancel his camper purchase and tour of the country. "When I think how the warnings of the crisis were pooh-poohed, the contempt that people had for depositors, I feel let down."
Kaplan, catapulted to folk-hero status for his adroit handling of the enormously complex legal issues in Maryland's S&L crisis, complains today about feeling like a "semi-zombie" and longs for a respite on the Eastern Shore where, he said, "I can stare at the water and there's no mail and no telephone."
Hughes, a Democrat whose standing among voters has plummeted in the past year, is crisscrossing the state to recite his administration's considerable accomplishments, lest they be overshadowed by a full year of bad news. "We have come a long way and we haven't got much further to go," the governor said last month.
Twelve months ago, when the runs at Old Court threatened to spill over to more than 100 other state-chartered savings and loans, Hughes sharply restricted withdrawals at the thrifts and rushed to insure their deposits. At the time, the taxpayers of Maryland were staring at a potential $7.2 billion debt -- the total liability at those institutions. So it is with some justifiable pride -- and a large measure of relief -- that the governor now points to his administration's success in reducing that liability to about $1.5 billion in 150,000 accounts at 59 thrift associations.
But Maryland is by no means out of the woods. The events of the past 12 months -- a mixed bag of false starts, dashed hopes, stunning political successes and achingly slow negotiations -- have left a legacy that will be felt for years to come:
*Although thousands of S&L customers have regained access to their funds, more than 78,000 people still cannot get to the bulk of their money. Depositors at Old Court await the start of a pay-back plan that is to give them each $5,000 this month and the rest of their funds, up to $100,000, by 1990.
Customers of Community Savings & Loan of Bethesda wait for the sale of their association to the Mellon Bank Corp. of Pittsburgh, a transaction that was challenged in court two days ago by another savings and loan. And to depositors of First Maryland Savings & Loan of Silver Spring, Hughes has offered little beyond the vague assurances that it will be sold and its deposits released.
"We're a political football," said Singer, 66, who was able to withdraw most of his life savings a year ago but still has $17,000 frozen in Old Court. "They tell us we have to wait four years to get it all, but a lot of people will not live that long."
*The yearlong crisis has accelerated the revolution in interstate banking, making Maryland the prized catch of some of the world's largest banks, while delivering a simultaneous blow to the U.S. savings and loan and mortgage insurance industries.
Mellon and Chase Manhattan, of New York, have used the crisis to their competitive advantage, snatching up a total of four large distressed thrifts to convert them into full-service branches in the lucrative Baltimore-Washington market area.
Meanwhile, the crisis, which crippled Ticor Mortgage Insurance Co., the nation's third-largest insurer of residential mortgages, is still sending tremors through the once-staid S&L industry. "The crisis unnecessarily raised questions in the mind of the public about the safety of their funds," said Philip Gasteyer, chief Washington lobbyist for the 3,400-member U.S. League of Savings Institutions.
A single statistic reveals the damage done nationwide by the Maryland crisis and the earlier, but less severe, collapse of Ohio's private S&L insurance: U.S. League members suffered a massive drain on deposits for seven straight months in 1985, according to Gasteyer.
*The Maryland crisis started a dizzying merry-go-round of legal proceedings, bankruptcy hearings, far-flung property evaluations and even the charting of new corporate conservatorship law. Experts say there is enough work to employ hundreds of lawyers, title examiners and real estate appraisers well into the 21st century. Kaplan, who is presiding over the disposition of three large defunct thrifts, estimates that just under $5 million of the S&Ls' estates has been paid to lawyers working on those cases.
The machinery of state government also lurched into overdrive. The General Assembly met twice in special sessions, setting up a brand new agency, the Maryland Deposit Insurance Fund, to protect customers' accounts. Attorney General Stephen H. Sachs filed civil suits seeking staggering amounts of money from former thrift owners and mounted costly criminal investigations against many of those same officers. At the state's request, Baltimore lawyer Wilbur D. Preston Jr. investigated the origins of the crisis and early this year issued a 457-page report that catalogued in rich detail what he called "a history without heroes."
*Bits and pieces of that history came out prior to the Preston report, and with each new revelation it seemed the crisis would destroy the career or tarnish the professional reputation of someone who was powerful in government or the S&L industry.
The victims ranged from Jack Cooper, a mild-mannered assistant attorney general who was assigned to the regulatory Division of Savings and Loan Associations and resigned after Preston issued his scathing report, to the top two officials of that agency who were forced out of their jobs.
Others endured the modern-day version of a public flogging. Jeffrey A. Levitt, the owner of Old Court whose conspicuous consumption of food and luxury items came to symbolize the crisis itself, was the butt of countless jokes, as was his wife Karol. The couple courted trouble, breaking a $1,000-a-week spending limit imposed by Kaplan until the judge sentenced them to jail.
Jeffrey Levitt remains in a medium-security facility in Jessup; Karol Levitt served 12 weekends in jail and is now free.
Gary Huddles, a Baltimore County Council member who was considered a rising star in local politics, saw his aspirations fizzle after publicity about a $60,000 loan he had received from Levitt. Huddles, who had never made a single payment on the loan, has since repaid it.
Michael Yerman, who had sold half of his Baltimore area real estate business to Levitt 10 months before the runs at Old Court, says he became a victim of "guilt by association."
"There were so many rumors flying around last year," said Yerman. "The future programs, an expansion we wanted to do -- all of that ended very abruptly. The whole year was pathetic from beginning to end."
*The crisis had other effects that were more subtle but equally profound. Depositors who had trusted their neighborhood savings and loans reacted with bitterness when they learned that some thrift officers had engaged in a spree of risky and improper lending practices.
Depositors attacked other visible targets, reserving special scorn for Hughes and to a lesser extent Sachs. When The Washington Post published a story about a warning regarding "high-flying" savings and loans that Hughes had received in October 1984, one spokesman for a depositors' group demanded the governor's impeachment. Since then, members of the same group have dogged Hughes on the campaign trail.
"People who have been stung have a bitterness that is very, very deep," said George H. Callcott, a history professor at the University of Maryland who has written extensively on state politics. "The anger is perhaps not very rational, but it's very deep against Hughes in particular and government in general."
For someone like Singer, a retired antiques restorer who has vivid memories of hardships in the Depression, the crisis has meant far more than a canceled vacation. With the lessons of that earlier time and the past year still fresh in his mind, Singer now keeps his money in three different Baltimore banks.
"I'm always a very optimistic person," he said this week. "But when you put your trust in people and they betray the trust -- well, that's something you don't forget." CAPTION: Picture 1, Joseph H. H. Kaplan . . . weary of complex legal issues; Picture 2, Lester Singer, customer of Old Court Savings & Loan, holds one of his still-unredeemable $5,000 certificates of deposit. By James A. Parcell -- The Washington Post