Mother Jones
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While the political world speculates on whether Jeb Bush will endorse his onetime protege Marco Rubio ahead of the Florida primary, another Bush brother has thrown his support to Rubio’s rival, Ted Cruz. According to the Cruz campaign, Neil Bush, Jeb and George W.’s younger brother, has signed on as member of its national finance team.
Neil has a colorful business background, dating back to his role in the spectacular collapse of the Silverado Savings and Loan in 1988. Bush, who served on the bank’s board of directors, was singled out by regulators for engaging “in unsafe and unsound practices involving multiple conflicts of interest,” according to an administrative law judge (who nonetheless recommended mild disciplinary action against the Bush brother). Neil, who denied any wrongdoing, allegedly failed to mention to other board members that two of the bank’s biggest borrowers were also his business associates. Bush’s partners ultimately defaulted on more than $100 million in loans, helping to sink the bank, whose implosion cost taxpayers more than $1.3 billion. Bush and the other directors of the bank were later personally sued for “gross negligence” by the Federal Deposit Insurance Corporation; he settled his portion of the case for $50,000.
Here’s a quick summary of Bush’s alleged involvement:
At the center of the allegations against Bush were his relationships with two Colorado developers, Bill L. Walters and Kenneth M. Good. The two developers ultimately defaulted on more than $100 million in loans from Silverado, which helped bring about its collapse, according to regulators.
The regulators charged that Neil Bush failed to disclose adequately to his fellow directors that he had extensive business dealings with the developers at a time that they were receiving loans from Silverado.
According to the charges, Neil Bush violated his duties by voting to approve loans to Walters without disclosing the extent of his business deals with Walters and he personally arranged for Walters to receive a $900,000 line of credit from Silverado.
The regulators also accused Bush of failing to tell his fellow directors that Good was preparing to invest $3 million in Bush’s oil drilling firm at a time Good told Silverado he was broke and could not make his loan payments. Good also loaned Bush $100,000 that was never repaid.
While Cruz has won Neil Bush’s backing, his brother George, whose 2000 campaign Cruz worked for, doesn’t seem likely to throw his support to the Texas senator. “I just don’t like that guy,” he told donors last year.
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