Whitewater Pro-Con William Safire And Molly Ivins Wage A Debate Over Whitewater

One of the cliches of the savings and loan scandal is that it is so big, there’s enough blame to go around for everyone who ever touched it: Congress, Presidents Reagan and Bush, the regulators. But I’ve always considered it a media failure in particular. We blew it.

Some watchdog. And I’m not even talking about The Wall Street Journal’s immortal prediction about S&L deregulation: “The beauty of these solutions is that they will be so cheap.” With the exception of two newspapers in Dallas and a little watchdog group in North Carolina, the media just sat there doing nothing while the whole thing raged out of control. By the time the Establishment media looked up and said, “What ho, is that smoke we see?” there was nothing left but some cold briquettes.

Because the mess couldn’t be blamed on one party or the other, there was no partisan percentage in doing anything with it as an issue except burying it. And to the enduring disgrace of the media, we let George Bush do just that in 1988. I don’t think the media even did a decent job of explaining how it happened after it was over. For that, you have to go to some of the excellent books that have been written on the subject.

Somewhere in the groves of academic journalism there is doubtlessly someone counting the column inches and hours of air time the media have devoted to the travails of Madison Guaranty Savings and Loan as compared to the inches and hours devoted to the S&L scandal as a whole. My guess is it’s at least 4-to-1 by now. We still don’t get it.

Madison Guaranty has always been a singularly unimpressive specimen of an S&L failure (cost to the taxpayers $69 million, and the Clintons’ 1978 investment had nothing to do with the 1989 failure).

If the only way to get the press to report on an S&L scandal is by having some prominent political figure involved, then Mother Jones magazine has done significant public service in its current issue by pointing out some other interesting cases. MoJo observes that “four years of relentless investigation, 41 hearings by two separate congressional committees and the expenditure of $30 million of taxpayer funds” have been spent on Whitewater. All that’s been proven is that Whitewater was (A) typical and (B) piddly.

Sen. Phil Gramm of Texas had questionable dealings with a questionable S&L owner who is now serving a 55-year sentence for conspiracy and fraud; that one cost the taxpayers $200 million. Gov. Fife Symington of Arizona was on the board of directors of a Phoenix S&L where he got an insider loan and walked off with $8 million; the S&L bellied up for a taxpayer hit of $941 million.

Rep. Henry Hyde of Illinois, hero of the anti-abortion movement, was on the board of directors of a Chicago thrift that failed at a cost of $67 million; Hyde and the other directors are being sued by the federal government on grounds of gross negligence. The fact that Hyde is now chairman of the Judiciary Committee has somehow failed to stir Sen. Alfonse D’Amato’s investigative instincts.

If you want the one-family record for costing the taxpayers money, try the Bush clan. Neil Bush was on the board of directors of Silverado Savings when it closed at a cost to the taxpayers of $1 billion. Jeb Bush of Florida was involved with the late Broward Savings, dead at a cost of $221.8 million, and Big George indirectly cost the taxpayers $5 billion when BNL of Iraqgate fame went under.

After Silverado, Neil got a $2 million loan from the Small Business Administration and walked on it. Our own Gov. Shrub Bush was accused of violating securities laws governing insider stock sales when he sold his shares of Harken Oil on the eve of the Gulf War. (Nothing ever came of the allegations.)

So why all the attention to a piker like Madison Guaranty? Is the Washington press corps still so besotted with Woodward and Bernstein that a mere Judiciary Committee chairman, governor or senator is beneath their notice? I don’t think so.

I think the media still know so little about how S&Ls operated in the 1980s that they actually think Madison Guaranty is a story. They missed The Big One, and now they’re trying to convince us all that this dud actually mattered.

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For opposing view, see William Safire’s column under same headline.