Neil Bush engaged in "one of the worst kinds" of conflict of interest when he served as director of a Colorado savings and loan that failed in 1988, according to charges by thrift regulators in documents released by the Office of Thrift Supervision.

The conflict involved Bush's dual roles as a director of Silverado Banking, Savings & Loan and as a business partner with two of Silverado's major customers who borrowed millions of dollars from the Denver institution, the OTS said in a Feb. 5 brief supporting its administrative charges against President Bush's son.

This and other documents in the case, which have been sealed until now, provide the most complete public view thus far of the government's charges against Neil Bush.

Regulators allege that in three instances, Bush violated his responsibility as a Silverado director to see that the institution was run in a safe manner and in the best interests of shareholders and of depositors.

At first, earlier this year, regulators sought to bar Bush from the banking industry. But after Bush protested, they sought a milder sanction, asking him to agree to a "cease and desist" order that would bar him from violating banking laws.

Bush, who has repeatedly denied the OTS charges, refused to sign the order, saying that to do so would imply he had acted improperly. "I know I haven't done anything wrong," he said in an interview Monday with The Washington Post.

President Bush has expressed confidence in his son's "integrity and honor" and in the ability of the regulatory system to handle Neil's case without being influenced by his father's position.

As the documents on the Bush case were made public, the Federal Deposit Insurance Corp. said yesterday that it is considering suing Bush and the other officers and directors of Silverado.

FDIC spokesman Alan Whitney denied press reports that the FDIC had decided to bring a $200 million suit against the Silverado directors. "We are still investigating the circumstances to decide if there is a basis for a civil suit against the directors, officers, accountants and lawyers and everybody else involved" with Silverado, Whitney said.

The FDIC and its sister agency, the Resolution Trust Corp., have legal power to bring civil lawsuits against anyone they believe is responsible for the failure of a bank or thrift.

Democrats in Congress have made the Silverado case a political issue, questioning whether its closing on Dec. 9, 1988, was delayed by regulators until after the Nov. 8 national election to avoid embarrassing George Bush and asking whether Neil Bush received special treatment from regulators because he is the president's son.

Losses from loans and real estate bankrupted Silverado, forcing regulators to close it at a cost to taxpayers of about $1 billion.

Other OTS documents released this week say that two years before the thrift was closed, it was being used by developers, including a partner of Neil Bush, and apparently with the knowledge of key Silverado management, to take troubled real estate projects off the developers' hands. The documents were first published Tuesday in the Denver Post and the Rocky Mountain News and were made available to The Post yesterday.

The charges against Bush by enforcement officials at OTS, a regulatory arm of the Treasury Department, are being heard by an administrative law judge and will the subject of a public hearing Sept. 25 in Denver.

One charge brought by OTS involves Bush's request to Silverado in 1986 to provide a $900,000 line of credit to a company owned by his friend and financial backer Kenneth Good, a Colorado businessman, for an oil and gas exploration venture in Argentina.

Although Bush informed other Silverado directors that he and Good had a business relationship and abstained from voting on the request, the OTS charges that Bush concealed the fact that he and Good -- through separate companies they each controlled -- were partners in the Argentina venture and that Bush stood to benefit from its success.

Regulators said he "did everything in his power to bring about a regulatory violation" of rules governing how thrifts make loans to their own directors and officials, according to the documents.

In an interview yesterday, Bush said, "This is typical of the case that's being brought against me that they have no basis in fact and the facts that they have they disregard and hide." He cited a Nov. 12, 1986, memo to the board of directors from Russell Murray, former chief lending officer at Silverado, about the request on Good's behalf.

The memo disclosed that the request "has come through and involved a board member {Neil Bush}" and that Good's company was seeking the line of credit "in conjunction with its business activities ... with JNB Exploration Co.," which was Bush's primary company.

Two former Silverado directors, who had told regulators this spring that Bush had not informed the board of his financial stake in the Argentine venture, later changed their statements to say they did recall being told of Bush's involvement with Good in the Argentine bid.

Bush and his lawyer have pointed out that the request for the line of credit was never "consummated," meaning it was never signed or drawn on even though Silverado's board had approved it on Nov. 24, 1986.

"There was never any intent to have the loan consummated. There was never any intent for the deal to be funded. It was basically a letter of reference," Bush said.

Good gave a personal guarantee instead to win the Argentine exploration contract, according to Bush's lawyer James Nesland.

OTS officials reply that as soon as the board approved it, the line of credit was available to Good to satisfy Argentine authorities.

In a letter Bush wrote on Nov. 5, 1986, to a Silverado executive, he said that Good had already presented the $900,000 line of credit to the Argentine government.

A second charge alleges that Bush failed to disclose that Good had agreed to pay him $3.1 million to buy an 80 percent stake in Bush's company at the same time that Good was telling Silverado he could not repay $8 million of $11 million in loans from Silverado.

In a third charge, OTS alleges that Bush acted "in a manner likely to cause abnormal risk to Silverado" when he voted to approve loans to a major Denver developer who was Bush's business partner for two years and owned a bank that extended $1.7 million in credit to Bush's company.

The developer, Bill L. Walters, ultimately defaulted on about $91 million in Silverado loans. The documents portray Walters as a key figure in Silverado's demise, a man who was one of the thrift's biggest borrowers at the same time he was acquiring "conclusive control" over the holding company that owned it.

With the Denver real estate market falling, Walters and another major stockholder sold their property interest to the thrift, shifting "the carrying of real estate to Silverado," OTS examiners said in a 1986 report on the thrift.

"Should the Denver market recover, they will reacquire their assets upon payment of a return. Silverado, however, bears most, if not all, of the downside risk," the examiners said.

Through one complicated transaction with Walters, W. James Metz and Michael R. Wise, principal stockholders and officers of Silverado, obtained nearly $4 million in unsecured, interest-only loans. Both men eventually defaulted on the loans. The transaction was circular in nature, the OTS documents show: A Silverado affiliate purchased interests in real estate partnerships controlled by Walters. Walters used some of the funds he received to buy stock in Silverado's holding company. With the funds from Walters, the holding company then granted a $2.5 million loan to Metz and a $1.45 million loan to Wise. OTS called these loans "among the most egregious of the abusive insider transactions."

Staff writers Jerry Knight and Spencer Hsu and staff researcher Bruce Brown contributed to this report.