Neil Bush Fights to Clear His Famous Name
Which makes it all the more surprising that Neil Bush, 35, should suddenly find himself the cause of a crisis within the First Family. At issue is his conduct while serving as a director from 1985 to 1988 at Silverado Banking, Savings and Loan, a Denver thrift institution that went bust in 1988. Earlier this month, federal investigators accused Bush of instances of conflict of interest during his tenure. The political elbowing immediately got ugly. "Neil Bush is the Billy Carter of 1990," sniped Rep. Robert G. Torricelli (D—N.J.). Fairly or not, Bush emerged as another name to put on the country's savings-and-loan mess, a scandal that could cost taxpayers $500 billion in cleanup costs over the next 40 years. Meeting the allegations head-on, Neil insisted that he had done nothing wrong and that he was only being hounded because he is the President's son. "I've always prided myself on being the lowest-profile member of the Bush family," says Neil, "and suddenly this thing has exploded."
Amid the cascade of newspaper and television reports, the Bush clan has banded together. His siblings, says Neil, "are all in a kind of feisty mood and want to fight back and protect my integrity because they know I've been attacked from every angle." And like any parent defending his child, the President expressed total faith in his son's integrity. Yet clearly the episode is taking a toll. Questioned about the scandal by reporters aboard Air Force One, Barbara Bush couldn't bring herself to speak of it. "You don't want to see a grown woman cry, do you?" she asked.
Although a child of more than ordinary privilege, Neil has known disadvantage as well. Raised in Midland, Texas, he felt painfully out of place when, at the age of 12, he moved to Washington, D.C., with his family after his father's election to Congress and was enrolled at the tony St. Albans prep school. "There I was with a heavy Texas accent, white socks and a crew cut," he says. He also struggled with his schoolwork. His teachers finally discovered that he was dyslexic; one instructor told Barbara Bush that because of his reading disorder, Neil might never graduate from high school. Instead of accepting that prognosis, Mrs. Bush worked with her son on a rigorous remedial program. The effort paid off: In his senior year in high school. Neil received a special award in recognition of his achievement.
At Tulane University in New Orleans, Neil majored in international relations, then went on to get his M.B.A. in 1979. The following year he signed on with his father's campaign for the Republican presidential nomination, stumping in Iowa and New Hampshire. Though the campaign failed, it wasn't a complete loss for Neil; while working in New Hampshire, he was introduced to a schoolteacher named Sharon Smith, and within months they were married. His close ties with his family notwithstanding, Neil says that he and Sharon were determined "to be independent and not travel on anyone's coattails."
Still, Neil had obviously profited from his father's example. Just as George had migrated to Texas some 32 years before to seek his fortune in the oil patch, Neil and his new bride headed for Colorado in 1980. After a brief stint at Amoco Production Co., Neil left with two partners to form a new company, JNB Exploration. For its financial backing, the firm relied, in part, on the deep pockets of two Denver real estate developers, Kenneth Good and Bill Walters.
At the same time, Neil and Sharon were starting to put down roots. They bought a $360,000 house in downtown Denver and had three children, Lauren, now 6, Pierce, 4, and Ashley, 17 months. Neil was asked to join the board of the exclusive Denver Club, as well as the local Boy's Club and the Children's Museum.
Professionally, though, Neil wasn't striking it rich. When oil prices started to tumble in 1985, so did JNB's profits. At the time, Neil was making about $75,000 a year, not an enormous sum for a young oilman in a hurry. Then he met Michael Wise, chairman of Silverado Savings and Loan, at a dinner party. Wise soon invited Neil, just 30 years old and without any banking experience, to join the board of directors at Silverado. Bush denies that the offer had anything to do with his being George Bush's son. Still, when federal regulators began probing his involvement in the thrift late last year, he acknowledged that he was so inexperienced he never even looked at Silverado's financial statements before agreeing to join the board. 'To be totally honest with you," he told the feds, "I'm not sure I could have formed an opinion."
In fact, by the time Bush came aboard, Silverado was already in deep trouble as the result of imprudent investments. Neil says now that he soon recognized warning signs but decided against resigning. "I'm the kind of guy that when I get married, I get married for life," he recently said. "When I join the board of directors, I'm there in good times and bad."
As officials at the government's Office of Thrift Supervision tell it, however, Bush may have helped make the bad times even worse. Backed by 1.000 pages of documents released earlier this month, the OTS alleges that Neil's tenure as a director was marked by the "worst kinds of conflict of interest." Specifically, investigators maintain that Bush failed to disclose fully his connections with his old associates Good and Walters, who were doing business with Silverado. (Bush says everyone was generally aware of his ties to the two men.) In one instance, the OTS says, Good came to Silverado asking to restructure $14 million in loans on the grounds that some of his real estate ventures were in serious financial straits. Bush kept silent, even though the supposedly beleaguered Good had recently signed a deal with JNB that could have resulted in a $3 million cash infusion. Bush maintains that other board members were aware of Good's financial condition. On another occasion Bush voted to approve Silverado loans to Walters, which ultimately resulted in losses of $45 million. (Bush contends that he was under no obligation to refrain from voting.)
Earlier this year Neil turned down the chance to settle the OTS case quietly. Officials offered to drop all charges if he would sign, without admitting guilt, a formal agreement not to violate any thrift regulations in the future. Bush refused, choosing instead to launch a high-profile effort to clear his name. "The principle is overriding here," he says. "If you didn't do anything wrong, don't sign anything that would imply that you did." An administrative court judge in Denver is scheduled to hear the case this September. Even if Bush is found responsible for violations, the potential penalties would not be severe. Far more threatening is the $200 million suit that the Federal Deposit Insurance Corp. is considering bringing against him and other officers of Silverado for violation of their fiduciary trust. If found negligent, Bush and the others would have to pay the judgment out of their own pockets.
Throughout his ordeal, Neil has stayed in close touch with his mother. "I think she worries more about it than I do," he says. "She hates it when people beat up on her kids." He says that he has spoken less frequently with his father, and that they have not discussed details of his case. "My father has never given me advice," says Neil. "When we talk he says, 'Neil, how are you doing? How's Sharon holding up? How are the kids?' " All the same, Neil has adopted the same tough-talking manner that the President has been known to favor when under siege. "I'm not going to be bullied by an overzealous agency of the United States government," he says. "Those guys have singled me out, and I'm going to fight them."
—Bill Hewitt, Garry Clifford in Denver