Neil Bush hardly knew Michael R. Wise, the engaging head of fast-growing Silverado Banking, Savings and Loan Association, when the two men sat down for a working breakfast at a Denver pancake restaurant one morning in 1985. They had only chatted once at a dinner party, so Bush was a little surprised when Wise invited him to join Silverado's board of directors.

Bush, then 30, did not know a thing about the thrift industry, and did not pretend to. His only banking experience was a summer job filling out forms in the trust office of a Dallas bank. He had trouble understanding a thrift's financial statement. His own oil business was in the red: In two years of drilling, he had hit mostly dry holes.

The most obvious reason for Wise's interest in him was inescapable, if distasteful to George and Barbara Bush's third son. "I would be naive to think that the Bush name didn't have something to do with it," Neil Bush said in a recent interview.

Wise was not the first Denver businessman to gravitate toward Bush; two of the city's wealthiest developers had given him the money to start his drilling company at age 28. But if ever there was a time to look a gift horse in the mouth, that morning was it.

Five years later, Bush stands amid the wreckage of reputations and fortunes from one of the 10 biggest thrift failures in the country, battling efforts to transform him into a symbol of the entire savings and loan scandal. He faces administrative charges that he violated banking regulations in the way he handled Silverado's transactions with his business partners. The Federal Deposit Insurance Corp. (FDIC) is threatening to file suit against him and other Silverado directors to recover some of the estimated $1 billion cost of liquidating the thrift.

Even if Bush wins his case with the regulators, as he insists he will, the consequences of his Silverado days are still steep: a major political embarrassment for President Bush and the Republican Party, a cloud of uncertainty over whatever political future he himself might have had, a year of his life lost to the controversy.

That Neil Bush would venture into such a thicket so seemingly unprepared does not surprise some who know the Bush children well. "Of the five, he is the most naive, the most genuine, a classic babe in the woods," a senior White House official said. "Watching politicians virtually all his life, you would think he would know about playing all the angles and watching for the pits. He just never has."

When Bush signed on in August 1985, Silverado was a troubled $1.5 billion institution in a shaky industry. Major thrifts in at least six states had failed.

Reports by federal bank examiners, which Bush said he did not read, had documented the risky lending practices that powered Silverado's explosive growth. The thrift's dealings with Bush's business partners raised serious conflict-of-interest questions that Bush later told regulators "didn't enter my mind."

One of the ironies of his current situation is that Neil Bush, now a standard topic at the president's news conferences, has made a point for years of not worrying his father with his business affairs. "I have never fallen back on Dad. Never," he said once. "I don't feel like imposing on my Dad in any way. I think I can add security to him. . . . I don't want to burden him."

In 1988, the year before he abandoned his drilling company, his father asked, "How's business?" "And I said, 'Great, Dad.' Just to keep his mind off me. . . . "

In the shorthand of families, "Doro" -- Dorothy -- was the shy one, Marvin the courageous one, Jeb the serious one, George W. the feisty one and Neil the nice one, the good kid. "He drove us all crazy, growing up, because he made us look just horrible," said younger brother Marvin Bush, an investment adviser.

In part, that was Neil Bush's way of making up for his poor grades while he struggled with dyslexia. "I always found ways to compensate," Bush said in a lengthy, largely unpublished interview with The Washington Post in 1988. "I was nicer. I volunteered to rake the yard when the others were bailing out."

All three of his brothers went to Phillips Academy, the Massachusetts prep school. George W. retraced his father's footsteps to Yale University, then went to Harvard Business School. But Neil Bush would be lucky to graduate from St. Albans School for Boys and would not get into college, his school counselor told his parents.A Perfect Town for an Optimist

St. Albans, a prestigious Washington private school where Bush enrolled in 1966 after his father was elected to Congress, was "the biggest shock for me as a boy," he recalled in the interview. After having only taken Spanish, he found himself in second-year French, "totally lost." His English teacher sent his papers back circled "with what seemed like hundreds of misspellings and grammatical corrections" and "made me come in on weekends to write these words over and over," Bush recalled.

With constant tutoring, Bush graduated from St. Albans and went on to Tulane University, where he had a 3.2 grade point average and earned a master's degree in business. That success cemented his positive outlook, family members said. "He is the most optimistic guy I've ever met in my life," Marvin Bush said in an interview two years ago.

"It may be weird, but I'm always happy," Neil Bush told the interviewer in 1988. "I always found the bright side."

His siblings toasted "Mr. Perfect" at his wedding to Sharon Smith, whom he met while knocking on doors in New Hampshire for his father's 1980 presidential campaign. After his father was elected vice president, the couple moved to Denver.

It was a perfect town for an optimist. The worldwide rise in oil prices set off a boom in exploration in the energy-rich Rocky Mountain states, with Denver at the center. People of every description -- car salesmen, dentists, geologists -- had left behind their old selves and moved in, hoping for a killing. Sleepy Denver had turned suddenly bold, as if it had been transplanted to Texas. "Those were the days when nobody could do anything wrong," said Steven Schuck, a Republican former Colorado gubernatorial candidate and a developer in Colorado Springs.

Bush, a reedy tennis player with patrician good looks, found immediate social acceptance among Denver's elite. Everyone knew his connections, but he did not flaunt them. "He's very self-effacing," said David E. Greenberg, a well-known Democrat who served with Bush on the board of the Denver Children's Museum.

Like almost everyone else, Neil Bush was "looking for the gusher." He spent three years learning the ropes at Amoco Production Co., then made his big move, forming JNB Exploration Co. in 1983. By then, prosperity was fading fast. Still, "I thought we were going to clean up unbelievably," said Evans Nash, one of Bush's partners.

One big reason Bush hoped for oil was his desire to move on to politics or public service. He had a vision that the Bush family would be to the Republicans what the Kennedys were to the Democrats. But he had an infant daughter, soon to be followed by two other children, and he needed "to figure out how to make a living," Bush said.

"You might find this hard to believe, but there isn't a big huge chest of gold there at the end of the rainbow -- I have to make it myself," Bush told one reporter. His father, he said, offered no financial assistance. "He would if I were desperate, but like any dad he doesn't want to see that." 'His Dad Might Be President One Day'

Bush impressed others in the Denver oil business as "hard-working" and "not pretentious," said Russell Spencer, president of Magnolia Oil Co. "He acted just like an average person."

But unlike the average 28-year-old oil man, when he hustled his proposal for investors in his company, Denver's business leaders listened. "It allowed him to get in to talk to a lot of people," Nash said.

His first taker was Bill L. Walters, whom he had met once at a lunch. Walters was a prominent Denver developer who had started as an architect with an office in his basement and amassed a reported net worth of $200 million before he was 40. In 1987, he told reporters he owned 24 million square feet of undeveloped land in the Denver area, the equivalent of the city's downtown area.

Walters was affable, athletic and seemingly as solid as they come, the owner of a bank and chairman of the Denver Chamber of Commerce in 1987. "His name was kind of magic," said Bruce Benson, owner of Benson Mineral Group, a Denver oil firm.

Walters agreed to give JNB $150,000 in 1983 in return for a 6.25 interest in the firm. "Here was a young man fresh out of business school, and these guys decide to put a lot of money into him," a prominent Denver business leader explained. "Maybe they'll make some money with him, maybe no, but it will help their political portfolio. His dad might be president one day."

Walters helped JNB Exploration get off the ground, but to actually drill oil wells, Bush needed Kenneth M. Good.

Like Walters, Good was a self-made man who fashioned a fortune from Denver real estate deals. But while Walters essentially was a private man, Good seemed to crave attention. He drove a Maserati, flew to Monte Carlo on a six-seat private jet and alternated silk suits with jogging outfits for business meetings.

His $10 million, custom-built house covered an astonishing 33,000 square feet and featured an indoor handball court and indoor and outdoor tennis courts. "The house went on for days," Schuck said. "It had nothing to do with living. It was a statement."

Good's development deals were similarly grand. "He was a risk-taker," Schuck said.

When Bush approached him, Good had just weathered a spell of nasty publicity. A competitor alleged in a civil suit that Good had gained inside information through a romance with a Colorado state official. State legislators claimed he won special treatment by lavishly entertaining other state officials. The allegations died, but Good was stuck with the image of a man who might cross a few lines to get ahead.

To JNB's partners, though, he was precisely the man they were looking for. "He was kind of free with his money," Bush said. "He went for high-risk ventures, which is probably why he was interested in my oil business."

Good put up $10,000 and obtained a line of credit from Walters's bank that eventually totaled $1.7 million. In exchange, he took 25 percent of the partnership. He also lent Bush $100,000 to invest for himself. When the investment did not pay off, Good forgave the loan.

Just as the money for JNB came in, though, time appeared to have run out. Oil prices plummeted, and the Denver economy began to unravel. The Petroleum Club adopted the motto: "Stay Alive in 85." Bush revised his schedule for success.

"I keep moving the deadline back. By the time I'm 40 I'll be able to do anything I want to," Bush told a reporter several years later. Then, mimicking another voice: "Well, you told me by the time you're 30."

Like Walters and Good, Wise was not bothered by Bush's lack of business triumphs when he sought him out for Silverado's board. "Neil Bush was on the board because of Mike Wise's ego, nothing else," one former Silverado executive has said. "He was the son of the vice president. It looked good."

"I think it was purely prestige and ego that drove Mr. Wise. He wanted to associate with the right circles," said Larry Martin, a well-known banking consultant in Golden, Colo.

Wise, who started as a suit salesman in Kansas, had a knack for making the right contacts. After he became the president of Silverado in 1979, he made friends with Kermit Mobray, the chief federal regulator for the region that included Colorado. "People wanted to believe in Mike Wise," Mobray said. "He had the aura of being unflappable, like he knew exactly what he was doing."

His peers in the industry voted Wise onto the board of their main lobbying group, the U.S. League of Savings Institutions, in 1985 and considered him for the position of president in 1988.

"He was the fair-haired boy of the league, the real comer," said Edwin J. Gray, former chairman of the Federal Home Loan Bank Board. "He sort of looked like the future, he talked like a man of the future. Of course, all those people who talked like the future would in a very short time be relics of the past."

Bush said Wise "presented himself very professionally." He saw Wise's offer of an $8,000-a-year board position as a chance to gain experience, "establish friendships and business relationships." "People who are participating members of the community join boards," Bush said.

Silverado, however, was not the Denver Children's Museum or Boys Club. In the view of Silverado's chief operating officer, Richard K. Vandapool, Bush and the other "outside directors" had no concept of the exposure they faced from their monthly board meetings around the polished oblong table in the airy "sky deck" of Silverado's white skyscrapers at the edge of Denver.

"I don't think any of them understands the risks . . . the magnitude of the potential liability inherent in their rubber-stamping directorships," Vandapool wrote to Wise not long after Bush joined the board.

Silverado was one of the fastest-growing thrifts in Colorado, in the front of a pack that revolutionized the industry. Like others, Wise had left behind single-family home mortgages, once the heart of the thrift business, and charged pell-mell into hotels, condos, office complexes and shopping centers. The thrift doubled and redoubled in size, joining in the frenzy of real estate speculation spawned by the oil boom.

Federal regulators had expressed increasing anxiety about Silverado's high-risk loans. A month after Bush joined the board, they lowered Silverado's rating to 4, the second-lowest rating on a scale of 1 to 5. But they did not sound the alarm until 14 months later, when Silverado's growing loan losses and apparent attempts to hide them provoked a full-scale examination of the thrift's books.

"There certainly were problems when Neil Bush came," said David Paul, Colorado's commissioner of financial services. But until the December 1986 inquiry, "they appeared to be correctable."

What the examiners found then was depressingly typical for sick thrifts: inflated appraisals, not enough cash down from borrowers, too much concentration in commercial real estate, too little capital. In particular, they criticized practices by the thrift that served to camouflage its weak capital base, including buying soured real estate from developers in exchange for their purchase of Silverado stock.

Wise and Walters, in particular, appeared to be using such deals to keep each other afloat while the real estate market went into a free fall, the regulators found.

The regulators also took issue with decisions approved by the board's audit and compensation committees, on which Bush served. Silverado engaged in "opinion shopping" when it switched audit firms and awarded "excessive" bonuses that boosted Wise's salary to $1.3 million in 1986, the regulators said.

At the request of the bank examiners, the U.S. attorney's office and the FBI in Denver began looking at the thrift's records. Any theory of criminal conduct, however, has been hampered by the regulators' own prior approval of some of the thrift's most questionable practices, according to sources familiar with the inquiry.

The exam was the first regulatory step in a halting process that led to Silverado's seizure in December 1988 because of "massive amounts of poorly underwritten loans with excessive credit risk," according to an FDIC summary.

Federal officials from the Topeka, Kan., office recommended the institution be shut down in September that year, but their supervisors in Washington took no action for two weeks. The Treasury Department is now investigating whether the closure was purposely put off until after November, when George Bush was elected president.

Silverado's failure, the biggest in Colorado history, sent a shock wave through Denver's already traumatized economy. Walters defaulted on about $91 million in loans, leaving behind a paper Galleria, an unbuilt gun club next to a toxic dump and acres of half-developed land. Good defaulted on $31 million in loans.

The Office of Thrift Supervision (OTS) banned five Silverado executives from the industry, then, in February, filed three charges against Bush, who had resigned from the board in August. A hearing is scheduled for September on a proposed "cease and desist" order, one of its mildest sanctions.

Bush's misdeeds arose from the fact he "accepted a position for which he was unqualified or untrained," OTS alleged in a highly critical brief filed in support of its charges. But "inexperience does not excuse Neil Bush," the regulators said.The Silverado Players Have Vanished

OTS charged that Bush should have abstained from voting on $106 million in Silverado loans or purchases involving Walters while Walters was Bush's partner or creditor. Bush told regulators he voted because "I didn't stand to benefit from any of the transactions." Bush's attorney, James E. Nesland, argues that the law did not prohibit Bush from voting.

OTS also said Bush should have told Silverado officials that Good had pledged to infuse $3 million into JNB at a time when the developer persuaded Silverado to forgive $8 million in loans on the grounds that he could not pay. Bush argues that he avoided any conflict of interest by not voting on the issue. "The management of Silverado . . . knew better than I, I suspect, the financial condition of Ken Good," Bush told regulators.

A third charge involves Bush's efforts in 1986 to obtain a $900,000 line of credit for Good from Silverado. Good needed the line of credit to be eligible to bid with Bush's firm on Argentine oil and gas projects.

Bush contends he complied with regulations because he disclosed the partnership with Good to Silverado officials, abstained when the board voted on the proposed line of credit, and never intended that the line of credit be drawn upon. OTS argued in its brief that Bush "did everything in his power to obtain the line of credit but vote."

From the 20th floor office of his new firm, Apex Energy Co., Bush brands the criticism as "self-serving hype" by regulators "trying to cover their posteriors."

It's a lonely stand. All the other key Silverado players have vanished. Wise, thrown out of the industry, works for a hotel magnate in Wichita, Kan. Good moved to New York, supposedly to consider the commodities business, after his Denver house was sold at public auction.

Walters lives in a $1.9 million residence in California, one of three homes listed in his wife's name.

JNB is defunct. Silverado does not exist.

Only Neil Bush is left, telling reporters, "First of all, I didn't know that much about financial institutions. . . . "

Staff writers Ann Devroy, T.R. Reid and Kathleen Day contributed to this report.