The nation's top thrift regulator yesterday asked the Treasury Department to formally investigate claims that in 1988 Washington officials delayed by several weeks -- until after Election Day -- the closing of a failing Denver thrift where President Bush's son Neil had been a director.
The Treasury Department announcement of an impending investigating came only hours after the president, at a press conference, defended his son's integrity and said he believes that the government will be able to fairly investigate Neil Bush's role in the demise of Silverado Banking, Savings and Loan Association, where he was a director from mid-1985 until mid-1988.
"The system is going to work," the president said, "whether it's the president's son or somebody else, and to suggest that it doesn't undermines the basic integrity of the American process, the American system."
The request for the investigation by T. Timothy Ryan, director of the Office of Thrift Supervision, comes nearly two weeks after a former field supervisor testified under oath that officials in Washington ordered him to wait to close Silverado.
Kermit Mowbray, the former top regional supervisor for thrifts in a four-state region that included Colorado, said he complied, waiting until the day after the Nov. 8 election to issue the order to close Silverado.
Silverado, whose failure is expected to cost taxpayers an estimated $1 billion, was seized by the government on Dec. 9, 1988.
Since Mowbray's sworn testimony before the House Banking Committee 11 days ago, Ryan has been unable to verify that a delay order was issued, much less who issued it or why. A Treasury spokesman said that the agency's inspector general, a political appointee named by President Bush in recent months, will investigate the matter and report his findings to Ryan unless there is evidence of criminal activity, in which case a report would be made to the Justice Department.
In the absence of criminal wrongdoing, Ryan, also a Bush appointee, would determine what the next step, if any, should be, according to a Treasury spokesman.
Thrift regulators have charged that Neil Bush violated his fiduciary duty at Silverado by allowing his outside business interests to interfere or pose the appearance of interfering with his responsibilities to ensure the safety of the thrift.
The president said he has discussed Silverado with Neil Bush only "in that broad parental way," adding that his son "would be the last to ask me in any way to get involved in any side or the other.
"I have ... full confidence in the integrity and honor of my son," the president said. "And I will stay out of anything to do with the investigation, but this is a fine young man. ... Yet, the system's got to go forward. And I am convinced ... if he has done something wrong, the system will so state. And if it hasn't, I hope it's fair enough to say, 'Hey, the boy did nothing wrong.' "