Federal thrift officials said today they are seeking a cease and desist order against Neil Bush, one day after the president's son rejected a settlement over his role as a director of a collapsed savings and loan. Neil Bush's actions as a director of Silverado Banking, Savings and Loan Association of Denver amounted to conflicts of interest, said the Enforcement Review Committee of the Office of Thrift Supervision in Washington, D.C. The case will be heard by an administrative law judge. If the order is granted, the younger Bush would be barred from practices that could constitute a conflict of interest if he ever serves again with a federally insured financial institution. Bush said Thursday the Office of Thrift and Supervision had proposed the cease and desist order, but he had rejected it because it would imply that he had acted improperly. ``In my view, a settlement agreement would leave an implication that I misbehaved as a director of Silverado,'' Bush said in a statement. ``As I have said in the past, I have nothing to hide and I have done nothing wrong,'' he said. ``Therefore, I have refused to consent to any agreement with the Office of Thrift Supervision and if they choose to bring action against me, I will fight the matter in court.'' Bush, 34, served as a director of Silverado from 1985 to August 1988, resigning two weeks after his father got the GOP presidential nomination. The collapse of Silverado, now operating as part of Columbia Savings, the largest thrift in Colorado, is expected to cost taxpayers up to $1 billion. Karl Hoyle, senior deputy director of the Office of Thrift Supervision, said in Washington late Thursday that Bush's lawyers had told the agency Bush intends to contest the allegations of conflict of interest made by thrift regulators. Hoyle said the agency wouldn't seek a more severe penalty, which would ban Bush from ever working for a federally insured financial institution, because the office didn't believe it had grounds to seek it. That penalty has been imposed on five former Silverado officers. In a related matter, the Federal Deposit Insurance Corporation is considering whether to sue Silverado officers and directors, including Bush, for damages for losses to the taxpayers in the bailout. The Office of Thrift Supervision said examiners had expressed ``grave concern'' about Silverado's operations, particularly its heavy investment in Colorado's ailing commercial real estate market. They also have focused their investigation on what they said was ``an exceptionally large number of problem transactions'' between Silverado insiders and borrowers. Bush, who was a partner in an oil exploration firm, JNB Exploration, had business deals with two of Silverado's major borrowers, developers Bill L. Walters and Ken Good. ``Bill Walters had a passive 6.25 percent limited partnership interest in JNB Exploration,'' Bush said. ``Because I did not benefit directly or indirectly from any loan or transaction between Silverado and businesses controlled by Bill Walters, as an outside director I voted in 1986 with the other directors in unanimously approving the Walters loans and transactions brought to us by management. ``I voted because there was no conflict of interest under the federal banking laws and regulations or under the laws of Colorado,'' Bush said. Good, according to Bush, had a more active interest in the financing and management of JNB Exploration, and ``as a result, I abstained on all votes concerning Good. The other board members unanimously approved the transactions with Good,'' Bush said. He said both Walters' and Good's relationships with Silverado, as borrowers and preferred shareholders, were established before he became a director. ``Their relationships with my company, which began in 1983, also preceded my Silverado board appointment,'' Bush said. A former federal S&L examiner, James Moroney, has alleged that regulators dragged their feet on Silverado because of Bush's presence on the institution's board and other political connections. But regulators in Washington have said they investigated Moroney's allegations and found them invalid. Bush has said he never sought to use his political connections and wouldn't have if asked.
