Opposition research teams for both parties are working overtime to come up with dirt. White House Press Secretary Marlin Fitzwater urged reporters to examine Democratic Sen. Bob Kerrey’s “Nebraska accounts,” an apparent reference to a Nebraska thrift that failed in 1983 while Kerrey was governor. Kerrey called Fitzwater’s statement an “arrogant, sneaky maneuver.” On the Democratic side, Illinois Rep. Frank Annunzio sought to pre-empt questions about his close relationship with the S&L industry by leading the charge against Neil Bush, the president’s son who has been caught up in the S&L scandal. According to a document released by the House Banking Committee, federal regulators considered banning Bush from the banking business, they then backed off. Neil Bush remains the subject of a disciplinary action by federal regulators for alleged conflict of interest as a director of a failed Denver S&L. “Can any agency of the United States fairly and impartially investigate the son of the president?” Annunzio demanded. (Neil Bush denies any wrongdoing.)
The Democrats took advantage of Neil Bush’s predicament. Stung, the president shot back through his spokesman. Fitzwater launched an unusually personal attack on Democrats, warning that if they tried to stick the GOP with the S&L mess, “We’re ready to play.” On NBC’s “Today” show, GOP consultant Roger Ailes insinuated that New York Gov. Mario Cuomo’s son, Andrew, may have a problem. “There are a lot of people on both sides that are tap dancing in a minefield on this one,” said Ailes. (Aires offered no evidence of wrongdoing by Andrew, and there were reports that he admitted it was a cheap shot.)
The Democrats are hardly without blame. The Democratic Congress supported the Reagan-era deregulation that led to the S&L debacle. Four of the “Keating Five” senators accused of intervening with regulators on behalf of a campaign contributor are Democrats (all five deny any wrongdoing). Former House speaker Jim Wright and majority whip Tony Coelho left office last year in part because of questionable deals involving S&Ls. Democrats are counting on short voter memories.
Fire sale: Democrats see fresh scandal in the bungled bailout–what Schumer calls “the second S&L crisis. " The federal rescue program is already showing signs of abuse as the government tries to unload billions of dollars of seized assets at fire-sale prices. Two days after a survey by Public Citizen’s Congress Watch revealed that the government’s efforts to prosecute S&L fraud have recovered less than 2 percent of the cash lost, Bush asked Congress for an additional $25 million to step up enforcement. In a campaign-style rally, Bush vowed to send ’teams of razor-sharp prosecutors and auditors” to investigate the scandal.
The skirmishing over the S&Ls has helped awaken the Democrats’ populist instincts The S&L crisis “is a rich metaphor for the fact that somebody ran away with the money” during the Reagan era, says Democratic spokesman Michael McCurry. An article decrying the “capitalist blowout” of the ’80s and heralding a middle-class uprising is circulating among Democrats like a new manifesto. The article, adapted from a new book, has special weight because it was written by conservative Republican Kevin Phillips, who forecast the emerging GOP majority in 1969. Phillips believes there is political gold for the Democrats if they return to their roots and frame “money politics” as a class war. Led by Cuomo and Kerrey, the Democrats are picking up this theme, hammering at the unfairness of having taxpayers foot the bill while S&L executives go unpunished. “It’s a sure-fire applause line to say, ‘We’re going to put the S&L crooks in jail, and we’re not going to make you pay for their crimes’,” says a House Democratic aide.
That may be an appealing line, but it is also dishonest: the government is obligated to pay for money lost by the S&Ls because the federal government insures depositors. The only question is how high the price will be. As voters realize that they have to pay for the bailout, they are likely to blame not one party, but both.
