KF27 .G634 19851 COMMITTEE ON GOVERNMENT OPERATIONS DON FUQUA, Florida JACK BROOKS, Texas, Chairman JOHN CONYERS, JR., Michigan STEPHEN L. NEAL, North Carolina ROBERT E. WISE, JR., West Virginia JOHN M. SPRATT, JR., South Carolina GERALD D. KLECZKA, Wisconsin FRANK HORTON, New York THOMAS N. KINDNESS, Ohio WILLIAM F. CLINGER, JR., Pennsylvania ALFRED A. (AL) MCCANDLESS, California HOWARD C. NIELSON, Utah PATRICK L. SWINDALL, Georgia JOHN R. MILLER, Washington MATTHEW G. MARTINEZ, California WILLIAM M. JONES, General Counsel STEPHEN M. Daniels, Minority Staff Director and Counsel 12m CONTENTS Baker, Linda, Schreiber-, finance director, city of Pompano Beach, FL Barnard, Hon. Doug, Jr., a Representative in Congress from the State of Georgia, and chairman, Commerce, Consumer, and Monetary Affairs Beason, Donald R., president and chief executive officer, Financial Insti- tutions Assurance Corp. of North Carolina... Bulman, Paul E., commissioner of banks, Commonwealth of Massachu- Burns, James L., Jr., executive vice president, the Co-operative Central Celeste, Richard F., Governor, State of Ohio. Gray, Edwin J., Chairman, Federal Home Loan Bank Board.... Hathaway, Pamela A., executive vice president, Pennsylvania Savings Hogg, Charles C., II, president, Maryland Savings-Share Insurance Corp Horn, Karen N., president, Federal Reserve Bank of Cleveland.. Hunsche, Donald, executive vice president, Ohio Deposit Guarantee Fund. King, George C., administrator, savings and loan division, North Carolina Lapidus, Leonard, executive vice president, Mutual Savings Central Fund Luken, Hon. Thomas, a Representative in Congress from the State of Shad, John S.R., Chairman, Securities and Exchange Commission, accom- panied by Charles Harper, associate regional administrator, Miami Tew, Thomas, attorney, Finley, Kumble, Wagner, Heine, Underberg, Manley & Casey, equity receiver over ESM companies, accompanied by 660-672 Beason, Donald R., president and chief executive officer, Financial Insti- tutions Assurance Corp. of North Carolina: Prepared statement.. 334-346 Brown, Charles H., Jr., director, Division of Savings and Loan, State of 379-382 G a $ ? G Page Letters, statements, etc., submitted for the record by-Continued Bulman, Paul E., commissioner of banks, Commonwealth of Massachu- 424-428 Burns, James L., Jr., executive vice president, the Co-operative Central 360-367 Celeste, Richard F., Governor, State of Ohio: Attachments to prepared 10-17 Gray, Edwin J., Chairman, Federal Home Loan Bank Board: 297 Prepared statement.. 202-230 Hathaway, Pamela A., executive vice president, Pennsylvania Savings 317-331 Hogg, Charles C., II, president, Maryland Savings-Share Insurance Corp.: 307-312 Horn, Karen N., president, Federal Reserve Bank of Cleveland: Prepared 243-257 Hunsche, Donald, executive vice president, Ohio Deposit Guarantee Fund: 60-173 King, George C., administrator, savings and loan division, North Carolina 385-402 Kolter, Hon. Joe, a Representative in Congress from the State of Pennsyl- 6 Lapidus, Leonard, executive vice president, Mutual Savings Central 349-356 McEnteer, Ben, secretary, department of banking, Commonwealth of Martin, Preston, Vice Chairman, Board of Governors, Federal Reserve 406-421 233-239 Neild, William E., mayor, city of Beaumont, TX: Prepared statement..... 677–687 Article from the Wall Street Journal entitled "Bank Board Chair- 53 March 18, 1985, letter to Chairman Gray, Federal Home Loan Bank 52 261-282 Selby, H. Joe, Senior Deputy Comptroller for Bank Supervision, Office of 443-470 498-652 Tew, Thomas, attorney, Finley, Kumble, Wagner, Heine, Underberg, Wylie, Hon. Chalmers P., a Representative in Congress from the State of APPENDIXES 35-42 Appendix 1.-Private deposit insurance systems 691 A. Summary chart, characteristics of State/private insurance funds as 691 B. Survey of State/private insurance funds. 696 1. March 20, 1985, questionnaire to State/private deposit insurance 696 706 2. Questionnaire responses. C. June 12, 1985, letter to Subcommittee Chairman Barnard from Fed- Appendix 2.-National Association of Securities Dealers (NASD) documents 1047 1049 1049 B. ESM's broker-dealer application to NASD (excerpts), dated November 19, 1975.. 1066 A. NASD board of governors decision in re: District Business Conduct Appendix 3.-The SEC investigation of ESM Government Securities, Inc., A. Amended SEC order of investigation, dated January 10, 1978.. Page 1076 1076 1079 Appendix 4.-The SEC investigation of American Bancshares, Inc., 1978-81..... 1088 B. SEC internal memo, "Telephone conversation with Louis Frank, A. Letter from Steven W. Arky to Gary Lynch, Assistant Director of B. Lynch's response letter, dated October 20, 1981. A. SEC internal memo, "Chronology of Staff Inquiries Concerning Re- B. Letter from John F. Murphy, Branch Chief, Division of Corporation 1088 1091 1092 1095 1095 1100 1101 1101 1104 C. HSFS internal memo from David J. Schiebel to Marvin L. Warner D. Followup letter from Murphy to HSFS, dated August 7, 1984.. 1118 1119 E. HSFS internal memo concerning meeting between SEC officials and 1125 F. Followup letter from Murphy to HSFS, dated August 24, 1983. 1128 1133 H. Followup letter from Murphy to Home State dated December 12, 1143 I. Letter from Home State to SEC, dated December 18, 1984. A. Letter from H. Terry Smith, vice president, Federal Reserve Bank of B. Comments of First Marine Bank, Inc., in opposition to ComBanks' 1146 1147 1148 1151 1151 1155 Appendix 8.-Federal Home Loan Bank Board documents.. 1247 A. Documents relating to the FHLBB's supervision of Unity Savings 1247 1. Interim examination report, dated October 10, 1980. 1247 2. Unity response to FHLBB, dated November 20, 1980 1251 3. Examination report, dated January 6, 1981. 1259 4. Cease-and-desist order, dated February 27, 1981 1271 5. Special limited examination report, dated March 23, 1981 1277 B. Internal FHLBB memo regarding proper accounting treatment of 1287 D. Memo from American Savings & Loan official to FHLBB concerning 1289 1292 F. Letter from Ronnie R. Ewton to FHLBB regarding exam of Ameri- 1296 Appendix 9.-FDIC documents... A. Letter and attachments from William M. Isaac, Chairman, FDIC, to B. Letter and attachments from Robert V. Shumway, Director, Division Appendix 10.-Miscellaneous documents... Page 1299 1299 1305 1332 A. Letter from Hon. Doug Barnard, Jr., to Steven J. Arky, dated March 1332 B. Letter from Danny O. Crew, assistant city manager, city of Pompano 1333 1334 D. Documents relating to ComBanks' investments with ESM, 1981 1338 1347 Appendix 11.-Press materials...... 1350 A. "Miami Bank Indicted on Charges of Laundering Illicit Drug 1350 B. "Marvin Warner: Horse Trader in Florida Banks," Florida Trend, 1351 C. "Behind the ESM Collapse," the New York Times, March 14, 1985.. 1358 1361 1362 1364 F. "Closing of Ohio S&L's After Run on Deposits Is One for the Books," G. "Regulatory Failure on ESM," the New York Times, March 30, 1985.. J. "Warner, Pals Undid Life's Work, Angry Miami S&L Founder Says,' K. "State Can't Keep Up With Securities," Miami Herald, April 28, 1985 M. "How Many Hats Can Steve Arky Wear?", the American Lawyer, N. "The Rise and Fall of Marvin Warner," Business Week, May 6, 1985.. 1368 1370 1372 1373 1375 1378 1380 1387 1985... 1391 |