3. THE CIA ROLE IN THE SAVINGS AND LOAN CRISIS
It is now estimated that some 500 billion to 1.4 trillion taxpayer
dollars will be needed to bail out the savings and loan crisis. One very obvious
question, which has not been asked by the major news media, is what happened to
so much money?
At least one investigative journalist, Pete Brewton, of the
Houston Post, believes he has the answer. On February 4, 1990, Brewton wrote "During
an eight-month investigation into the role of fraud in the nation's savings and
loan crisis, The Post has found evidence suggesting a possible link between the
Central Intelligence Agency and organized crime in the failure of at least 22
thrifts, including 16 in Texas."
It was the first in a series of S&L
articles by Brewton that found links between S&L's, organized crime figures,
and CIA operatives, including some involved in gun running, drug smuggling, money
laundering and covert aid to Nicaraguan contras. If S&L funds went to the
contras or other covert operations it would help explain where some of the money
In his March 11, 1990, article, Brewton even suggested links between
President Bush's son Neil and the CIA/organized crime figures: "A failed
Colorado savings and loan whose board of directors included a son of President
Bush was part of an intricate web of federally insured financial institutions
that had business links to organized crime figures and CIA operatives, The Houston
Post has learned."
Despite the blockbuster nature of Brewton's exposes,
the major news media have not been quick to follow-up. As Robert Sherrill points
out in his extraordinary analysis of the S&L crisis in an unusual single subject
issue of The Nation (11/19/90), "Brewton's stories have not exactly stirred
the national press to action."
The strange silence on the part of the
press led Steve Weinberg, former executive director of Investigative Reporters
& Editors, to investigate the accuracy of Brewton's charges. Weinberg raises
two key questions: if Brewton's information is wrong, what should other journalists
be doing to set the record straight, and if he is right, why have most news organizations
failed to assign their own reporters to the scandal?
C. David Burgin, The
Post's executive editor, explained why The Post has devoted so much space to such
a controversial issue apparently without conclusive proof. "At this juncture,
at least, the `smoking gun' probably will have to be found by Congress or the
Justice Department, which have subpoena power. ... Meanwhile, taxpayers somehow
will have to foot the bill for these enormous losses. The Post will continue its
investigation and hopes at the same time the national press, in the public's interest,
will take a harder look."
After reviewing Brewton's documentation and
interviewing a number of journalists, some of whom reject Brewton's thesis totally,
and others, mostly alternative journalists, who support it, Weinberg concludes
that the national press should take a harder look at his charges. Project Censored
also agrees that this undercovered aspect of the S&L issue deserves the national
media's critical attention.
SSU STUDENT RESEARCHER: DYLAN BENNETT
SOURCE: THE HOUSTON POST, 4747 Southwest Freeway, Houston, TX 77001,
DATE: Series started 2/4/90
AUTHOR: Pete Brewton
SOURCE: THE NATION, 72 Fifth Ave., New York, NY 10011,
TITLE: "The Looting Decade"
AUTHOR: Robert Sherrill
SOURCE: COLUMBIA JOURNALISM REVIEW, 700 Journalism Building, Columbia
University, New York, NY 10027,
DATE: November/December 1990
TITLE: "The Mob, The CIA, and the S&L Scandal"
AUTHOR: Steve Weinberg
COMMENTS: Pete Brewton, the investigative journalist, whose
series of articles in The Houston Post were the first to systematically
expose the CIA's role in the S&L scandal, said that his articles
received no exposure on network TV or in major daily newspapers and
only passing mention in the newsweeklies. He added that wider exposure
of this story would let the public know that "operatives of an
agency of the executive branch of the government, the CIA, were involved
in owning and obtaining loans from savings and loans that later failed."
Robert Sherrill, whose article appeared in The Nation, said it was not
so much a matter of censorship but only insufficient and delayed exposure,
but added "Generally speaking, the press has done a very poor job
of covering the savings and loan (and bank) scandal for the past three
years, not just in 1990. As early as 1988, there was plenty of evidence
of the emerging mess, but the press allowed the cand-idates to dodge
the subject completely. The mass media's failure in 1989 and 1990 was
that it reported the scandal in dribs and drabs, and rarely tried to
put it all together so that the public could understand it in total,
could understand the causes and could firmly fix the blame." Sherrill
charged that network TV and the newsweeklies have been particularly
reluctant to take on the subject while the New York Times abused the
public by relegating most of its S&L coverage to the financial pages.
Among newspapers he had seen, Sherrill felt the Washington Post had
provided the best coverage of the issue. Steve Weinberg, former executive
director of Investigative Reporters & Editors examined Brewton's
evidence in-depth and said he "came down squarely on the fence."