Savings & Loan Scandal

Who Robbed America? A Citizen's Guide to the Savings & Loan Scandal, by Michael Waldman and the staff of the Public Citizen's Congress Watch, gives the reader both a full portrait of that scandal as well as a number of specific steps which can be taken by individuals and groups in order to prevent such a scandal from ever occurring again.

As Joan Claybrook writes in the Preface to Waldman's book, the work "is about crime in the suites, the consequences of deregulation, and why the American taxpayer is being stuck with a $500 billion bailout of bankrupt savings and loans" (p. ix). What makes this particular economic crisis and scandal so special is that it resulted from attitudes and policies flowing from the highest echelons of government. As Ralph Nader writes in his Introduction, "This book is a call to action about the S&L scandal --- the most outrageous example of banking corruption and governmental deregulatory complicity in American history. In my time observing Washington, I have not seen such arrogant disregard from the White House, Congress and corporate world for the interests and rights of the American people" (p. xiii).

This scandal, the book says, is not the result of a single individual's greed, nor is it a matter of the system breaking down and passively allowing such corruption. What has happened in the Savings & Loan scandal is that the call to corruption, the call to greed, the call to, finally, ripping off the American people, came from the highest

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individuals responsible for the scandal: "A platoon of riverboat gamblers took over many of America's savings and loans and threw the money away---or worse. There was the Beverly Hills thrift that hired nineteen Uzi-toting bodyguards to protect its chief executive officer" (p. 5). But these crooks in the savings and loans themselves would never have been able to do what they did without the active and passive collusion of the President and the Congress. President Reagan institutionalized a philosophy of greed which declared that "anything goes" as far as trying to make gargantuan profits on investments: "When one official begged the white House for more enforcement personnel to combat the pervasive fraud, he was told, 'The policy of the administration is to have fewer, not more, (bank] examiners'" (p. 5). And the scandal could not have happened without Congress, at the very least, turning its back and pretending that it was not happening, or was not the responsibility of Congress. Why would Congress abdicate such responsibility?: "Politicians of both parties took millions of dollars in campaign contributions and speech fees from the financial industry, and then voted to deregulate the S&Ls. Shills for the S&Ls included som

Category: Business - S