Mention the words "savings and loan failure," and most people think about the Charles Keatings of the world, the crooks and highfliers who knowingly bilked the poor depositors and left the federal government with an estimated $500 billion tab. But for every out-and-out thief, there were perhaps nine or ten less-witting accomplices--the S&L officers, directors, attorneys, appraisers and accountants whose negligence allowed the institutions to go under.

Some of these former "fiduciaries," or persons in positions of trust, knew what they were doing when they authorized loans for reckless or dubious real estate schemes. Others were simply in over their heads. Either way, under the law, they were all responsible for the decisions they made.

But as the result of a far-reaching shakeup at the Resolution Trust Corporation--the agency that was supposed to investigate the former fiduciaries of failed thrifts--many are escaping accountability for their actions.

Critics charge that the reorganization, hastily planned and poorly executed, was a political move by the floundering Bush administration to take the heat off Republicans involved in S&L failures.

As part of the reorganization, the RTC last month all but pulled out of Arizona, saying that its work here is mostly done.

That has outraged the attorney who once oversaw the RTC's efforts to sue former thrift professionals in Arizona. "It's your tax dollars going down the rat hole," says RTC lawyer Bruce Pederson. "And mine, too."

Although the RTC ultimately wound up with the financial remains of ten failed Arizona thrifts, civil lawsuits have been filed against officers, directors and other players of five of them--Western Savings and Loan, MeraBank Federal Savings, Southwest Savings and Loan, Lincoln Savings and Loan, and Sentinel Federal Savings and Loan.

Five others have escaped civil action so far, including heavyweights like Pima Federal Savings and Loan, which claimed $2.5 billion in assets when it was closed, and Sun State Savings and Loan, which claimed $1.1 billion in assets.

No suits have been filed against individuals involved with three smaller failed thrifts--First American, Security and Universal.

RTC spokespersons will not comment on the likelihood of any future civil actions involving the remaining S&Ls. "We investigate every failed thrift and we investigate all the professionals involved in each of those failures as a matter of policy mandated by law," says Felisa Neuringer, an RTC spokesperson in Washington, D.C. "We can't discuss individuals."

But in late January, the RTC attorneys assigned to handle professional liability cases in Arizona were transferred out of state, and their responsibilities were moved to the Denver office as part of the agency reorganization.

About 30 investigators were left behind to continue pursuing information for cases that have already been filed and to check out possible new leads.

Agency officials, including RTC chief Albert Casey, touted the reorganization as an indication that the agency's work is nearing completion.

"Why do [half of the Arizona S&Ls] have no suits, and Mr. Casey is telling the public that the RTC has finished its job and is scaling down, closing the Phoenix office?" Pederson asks. "In Arizona, most of the [failures] were rather large, and you would expect suits in every one of them . . . with the rough-and-tumble lending practices that were pretty pervasive throughout Phoenix in the mid-1980s."
Pederson says RTC attorneys used to characterize investigations for negligence or fraud at failed Arizona S&Ls as "shooting fish in a barrel."

But Pederson no longer has any say in the pursuit of civil cases.
Instead, he is one of the two RTC attorneys who were demoted and then branded whistle-blowers for testifying before Congress about the agency's anemic efforts to pursue former thrift fiduciaries.

@body:In March 1991, the RTC hired Pederson--a seasoned "professional liability" attorney with the Federal Deposit Insurance Corporation in Washington, D.C.--as part of a new program to aggressively pursue negligence claims against the former fiduciaries of failed S&Ls.

"I was very excited," says Pederson, a native Easterner who came to view his job in Wild West terms. "Here was probably the greatest financial scandal in our nation's history, and this was a chance to put on my white hat and see what I could do to clean up Dodge."
It was Pederson's job to set up the new Professional Liability Section in the legal division of RTC's Western regional office in Denver. He would oversee field offices in Phoenix, Denver and Costa Mesa, California, and hire nine attorneys to staff them. Their mission would be to investigate the failed thrifts, determine whether there was, indeed, negligence and judge whether it was cost-effective for the RTC to file lawsuits.

They would not be investigating the most notorious institutions--Colorado's Silverado Banking Savings and Loan and California's Lincoln Savings and Loan had already been handled by other federal agencies. The PLS attorneys would be taking a hard look at the second wave of thrift failures, among them Arizona S&Ls such as Pima Federal, Sun State and Security.

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Mike McGrath