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Address to United States Attorneys 6/22/90[OA 5375] [2]
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6
SENSITIVE
Document No. 151767SS
WHITE HOUSE STAFFING MEMORANDUM
90 JUN 21 P2: 16
DATE: 6/21/90
ACTION/CONCURRENCE/COMMENT DUE BY: 6/21/90 3:00 PM
SUBJECT: PRESIDENTIAL REMARKS: U.S. ATTORNEYS, GREAT HALL, JUSTICE
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
ROGICH
CARD
UNTERMEYER
CICCONI
ROGERS
DEMAREST
WINSTON
FITZWATER
PINKERTON
GRAY
BOSKIN
HAGIN
HOLIDAY
REMARKS:
Please forward any comments directly to Chriss Winston, Rm. 122,
x2930, no later than 3:00 PM TODAY, Thursday, June 21, with a
copy to my office. Thank you.
RESPONSE: See comments SENSITIVE from tanet Hale X 3/20
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
09/21/90
10:10
40001M
004
JANEV M9 community Cent
Davis/Dlynire
June 20, 2990
Title: Justice
90.JUN21 AS: 56
Draft: Three
White Colum coreon color
&
PRESIDENTIAL ADDRESS: U.G. ATTORNEYS, GREAT HALL, JUSTICE
FIfred
FF
from
11:20 6.2., Friday, June 82
oftengused
((Acknewledgements))
((You know what? When I told my grandkids that I'd be
spending time with some of America's finest crime-fighters, one
of them asked me if I would be sure and bring them back an
autograph 11
from Dick Tracy. " 111
Notear
Well, true villains are drawn from life, not from primary
colors. And where financial fraud is concerned, it takes a
discerning mind and an open heart to distinguish the incompetent
from the fraudulent, the unlucky from the unlawful. This nation
is very fortunate to be able to look to you -- the U.S. Attorneys
of America -- to make these tough calls. We depend on you to
sift through piles upon voluminous piles of documents, and
understand that in the cold numbers of a ledger can be found the
tragedy of an embezzled pension, the heartache of a stolen home.
White-collar crime is not as dramatic as violent crime. But
white-collar crime still ruins lives. It murders the fondest
poor
dreams of whole families. It takes & snake, a cold-blooded
word
choice
snake, to betray the trust and innocence of hard-working people.
And so if we have to look under rocks to find white-collar
criminals, then ve will leave no stone unturned. 111
remarking deposits
instructs got
I wer
Sale
2,20
2
This Administration, from our first days in office, has
worked with Congress to crack down on white-collar criminals. To
crack down on pinstriped bankers who launder the smell of blood
out of drug money, and white-collar crooks who cheat the elderly
out of their life's hard work. To bring to justice government
contractors who steal by the numbers.
You already know of the ((number)) of convictions from the
Hall
+3/20
Ill-Wind probe of federal defense contractors. You already know
that ((example of crackdown on drug financiers)) You already
know that among cases involving abuse of HUD contracts, the
Department of Justice has already obtained ((number)) of
convictions in Oklahoma alone, while courts have ordered almost
two and one-half million dollars in restitution in that state --
more than half of which will come from a bank president who has a
five-year reservation in prison. In all, the government has won
10,000 financial fraud convictions since 1985. And just last
year alone, the Department of Justice aggressively won almost 800
convictions in major financial fraud cases -- cases involving
more than $100,000.
When I took office, we also knew that something terribly
wrong had happened in the Savings and Loan industry. And 50, on
the ((xxth)) day of my Administration, I directed Attorney-
General Thornburgh to give these cases the highest priority. And
he did. When it comes to civil action, we have sought
lotnect
restitution for depositors and taxpayers alike through tens of
thousands of civil suite leveled against S&L executives, owners
you
Hall
3
and borrowers. And when it comes to criminal action, VO ain for
a simple, uncompremising position work threw the creeks in jail.
This aggressive attitude is paying off. In three years,
we've won 3, 299 S&L convictions $100 million ordered in
restitution -- more than four centuries in prisen terms meted
out. and, X promise you this -- there will in more. such nora.
Consider all that is happening: An S&L Chairman gets 30
years in a celebrated case in Dallas. An B&L CEO in Santa Rosa
is sentenced to prison, and the courts order almost 07 million in
fines and restitution. In Illinois, top officers of an S&L go to
prison, and are ordered to repay $17 million. These cheats have
cost us billions. They will pay us back in billions,
and they
dollar
will pay us back in years.
unlikelled Billions
These are the results of a determined effort - an effort
Hole
which we are boosting with 153 FBI agents, 100 FBI accounting
technicians and 118 Assistant U.S. Attorneys. The Dallas Task
Force has been particularly successful, obtaining 52 convictions;
so successful, in fact, that Attorney-General Thornburgh is
expanding the task force concept to 37 other U.S. Attorney's
offices around the country.
And because of Secretary Brady's leadership, the IRS is
Ade
aggressively pursuing individuals suspected of tax fraud in
connection with failed savings and loan institutions, while the
Resolution Trust Corporation is adding about 300 members to its
investigative staff this year, to become part of a new national
investigative network. Treasury's office of Thrift Supervision
SENT BY:OMB
; 6-21-90 ; 1:09PM ;
C&J Branch
4639;# 4
06/21/90
10:17
007
4
has also required 664 institutions to agree to terminate unsafe
and unsound practices, removed more than 150 senior thrift
officers and directors, and issued 111 cease and desist orders to
stop unsafe and unsound practices.
Throughout it all, our men and women in the federal agencies
are doing a great job, from the halls of Justice and Treasury, to
the passport clerk who recovered $3 million in cash, jewelry and
gold by keeping a former savings and loan owner from skipping the
country.
We are learning a lot from our successes, including how much
more there is to do. So I am here, today, to back new
legislative and Administration action -- further ways we can
simple
'
crack down on white-collar crime.
First, let me declare my support of an legislation amendment to the
crime
bill to enhance and enforce the civil and criminal
penalties for fraud against financial institutions. n This
This what aboat Hale House
legislation, sponsored by Minority Republican Leaders Bob Dole and Bob
Michel, and Senators Heinz and Garn, will intensify the resources
yhe shength one
up
of the United States government in the service of justice. And will
investration to proseculoual offerts
provide additional protection to the victems of creme,
These leaders of Congress and I want to authorise $25
million increase for the IRS and Department of Justice so we can
intensify broader their already vigorous investigations. 111 We want to
allow the use of wiretaps in investigating bank fraud. III We
also want Congress to authorize federal regulatory agencies to
ask the courts to freeze the corporate and personal assets of
defendants in civil cases -- so that they will not leave the
$
taxpayers high and dry. And we want to prohibit the use of
bankruptcy as 4 strategy to avoid paying damages to the rightful
recipients to the depositers. And us want to protect texpayers bx provided printly ? )
Federal sovernment claim over ocher creditions where fraud LA alleged.
fale
These are some of the legislative steps we can and must
take. We can also build on our recent successes by taking
further administrative action. The Attorney-General will
establish, within the Department of Justice, a new unit to direct
and sharpen the Department's actions even further, while helping
to coordinate actions with other agencies. And where new
problems emerge in SaLe, we will need to get involved fast.
That's why Attorney-General Thornburgh and Secretary Brady have
created a new approach -- a strike force against fraud -- teams
of razor-sharp prosecutors and auditors recruited from their
departments and other agencies -- striking city by city -- teams
that will jump right into the paper chase, teams that will hit
the trail while it's still not.
polanes
I have seen for myself that the men and women of these two
departments are working together because you share a tenacious
spirit, born of a thirst for justice. of course, we always
quantify the importance of our work together in terms of billions
of dollars lost. But, perhaps it is more appropriate to qualify
it in terms of lives ruined -- in terms of savers whose hard work
and honest trust has been treated like a joke; in terms or
elderly people whose faith in the future has been repaid with
bitter poverty at life's end.
0
It is your duty, your sacred duty, to right these wrengs, to
stand up for the vulnerable against the unscrupulous, the
guilaless against the conniving, We will not rest until the
sheats, the chiselers and the charlatens spend a large shunk of
their lives behind the bare of a federal compound. III
You do a difficult job in a spirit of professionalism. M
can only thank you, on behalf of all Americans, for your
dedication -- your dedication to justice.
Thank you for coming to Washington. May God bless each and
every one of you, and may God bless America.
#
#
action: Beeky Bland
SENSITIVE
CC: RS
Document No. 151767SS
WHITE HOUSE STAFFING MEMORANDUM
DATE: 6/21/90
ACTION/CONCURRENCE/COMMENT DUE BY:
6/21/90 3:00 PM
SUBJECT:
PRESIDENTIAL REMARKS: U.S. ATTORNEYS, GREAT HALL, JUSTICE
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
ROGICH
CARD
UNTERMEYER
CICCONI
ROGERS
DEMAREST
WINSTON
FITZWATER
PINKERTON
GRAY
BOSKIN
HAGIN
HOLIDAY
REMARKS:
Please forward any comments directly to Chriss Winston, Rm. 122,
x2930, no later than 3:00 PM TODAY, Thursday, June 21, with a
copy to my office. Thank you.
Coninants RESPONSE: pp 4-5-
Mahe sure that SENSITIVE
:2d 12 NNC 06
scope It and Assistant Deputy James Ext. to W. the the 2702
Cicconi
President
to Chief of Staff
Davis/Blymire
June 20, 1990
Title: Justice
90 JUN 21 A9: 56
Draft: Three
PRESIDENTIAL ADDRESS: U.S. ATTORNEYS, GREAT HALL, JUSTICE
11:20 a.m., Friday, June 22
((Acknowledgements))
((You know what? When I told my grandkids that I'd be
spending time with some of America's finest crime-fighters, one
of them asked me if I would be sure and bring them back an
autograph 11
...
from Dick Tracy. )) III
Well, true villains are drawn from life, not from primary
colors. And where financial fraud is concerned, it takes a
discerning mind and an open heart to distinguish the incompetent
from the fraudulent, the unlucky from the unlawful. This nation
is very fortunate to be able to look to you -- the U.S. Attorneys
of America -- to make these tough calls. We depend on you to
sift through piles upon voluminous piles of documents, and
understand that in the cold numbers of a ledger can be found the
tragedy of an embezzled pension, the heartache of a stolen home.
White-collar crime is not as dramatic as violent crime. But
white-collar crime still ruins lives. It murders the fondest
dreams of whole families. It takes a snake, a cold-blooded
snake, to betray the trust and innocence of hard-working people.
And so if we have to look under rocks to find white-collar
criminals, then we will leave no stone unturned. III
2
This Administration, from our first days in office, has
worked with Congress to crack down on white-collar criminals. To
crack down on pinstriped bankers who launder the smell of blood
out of drug money, and white-collar crooks who cheat the elderly
out of their life's hard work. To bring to justice government
contractors who steal by the numbers.
You already know of the ((number)) of convictions from the
Ill-Wind probe of federal defense contractors. You already know
that ((example of crackdown on drug financiers) You already
know that among cases involving abuse of HUD contracts, the
Department of Justice has already obtained ((number) ) of
convictions in Oklahoma alone, while courts have ordered almost
two and one-half million dollars in restitution in that state --
more than half of which will come from a bank president who has a
five-year reservation in prison. In all, the government has won
10,000 financial fraud convictions since 1985. And just last
year alone, the Department of Justice aggressively won almost 800
convictions in major financial fraud cases -- cases involving
more than $100,000.
When I took office, we also knew that something terribly
wrong had happened in the Savings and Loan industry. And so, on
the ((xxth)) day of my Administration, I directed Attorney-
General Thornburgh to give these cases the highest priority. And
he did. When it comes to civil action, we have sought
restitution for depositors and taxpayers alike through tens of
thousands of civil suits leveled against S&L executives, owners
3
and borrowers. And when it comes to criminal action, we aim for
a simple, uncompromising position -- throw the crooks in jail.
This aggressive attitude is paying off. In three years,
we've won 3,299 S&L convictions -- $100 million ordered in
restitution -- more than four centuries in prison terms meted
out. And, I promise you this -- there will be more, much more.
Consider all that is happening: An S&L Chairman gets 30
years in a celebrated case in Dallas. An S&L CEO in Santa Rosa
is sentenced to prison, and the courts order almost $7 million in
fines and restitution. In Illinois, top officers of an S&L go to
prison, and are ordered to repay $17 million. These cheats have
cost us billions. They will pay us back in billions, and they
will pay us back in years.
These are the results of a determined effort -- an effort
which we are boosting with 153 FBI agents, 100 FBI accounting
technicians and 118 Assistant U.S. Attorneys. The Dallas Task
Force has been particularly successful, obtaining 52 convictions;
so successful, in fact, that Attorney-General Thornburgh is
expanding the task force concept to 37 other U.S. Attorney's
offices around the country.
And because of Secretary Brady's leadership, the IRS is
aggressively pursuing individuals suspected of tax fraud in
connection with failed savings and loan institutions; while the
Resolution Trust Corporation is adding about 300 members to its
investigative staff this year, to become part of a new national
investigative network. Treasury's Office of Thrift Supervision
4
has also required 664 institutions to agree to terminate unsafe
and unsound practices, removed more than 150 senior thrift
officers and directors, and issued 111 cease and desist orders to
stop unsafe and unsound practices.
Throughout it all, our men and women in the federal agencies
are doing a great job, from the halls of Justice and Treasury, to
the passport clerk who recovered $3 million in cash, jewelry and
gold by keeping a former savings and loan owner from skipping the
country.
We are learning a lot from our successes, including how much
more there is to do. So I am here, today, to back new
legislative and Administration action -- further ways we can
crack down on white-collar crime.
First, let me declare my support of an amendment to the
crime bill to enhance and enforce the civil and criminal
penalties for fraud against financial institutions. This
legislation, sponsored by Minority Leaders Bob Dole and Bob
Michel, and Senators Heinz and Garn, will intensify the resources
of the United States government in the service of justice.
These leaders of Congress and I want to authorize $25
million increase for the IRS and Department of Justice so we can
intensify their already vigorous investigations. III We want to
allow the use of wiretaps in investigating bank fraud. III We
also want Congress to authorize federal regulatory agencies to
ask the courts to freeze the corporate and personal assets of
defendants in civil cases so that they will not leave the
involvey bank froud
in
these
cose
taxpayers high and dry. And we want to prohibit the use of
bankruptcy as a strategy to avoid paying damages to the rightful
recipients -- the depositors.
These are some of the legislative steps we can and must
take. We can also build on our recent successes by taking
further administrative action. The Attorney-General will
establish, within the Department of Justice, a new unit to direct
and sharpen the Department's actions even further, while helping
to coordinate actions with other agencies. And where new
problems emerge in S&Ls, we will need to get involved fast.
That's why Attorney-General Thornburgh and Secretary Brady have
created a new approach -- a strike force against fraud -- teams
of razor-sharp prosecutors and auditors recruited from their
departments and other agencies -- striking city by city -- teams
that will jump right into the paper chase, teams that will hit
the trail while it's still hot.
I have seen for myself that the men and women of these two
departments are working together because you share a tenacious
spirit, born of a thirst for justice. Of course, we always
quantify the importance of our work together in terms of billions
of dollars lost. But, perhaps it is more appropriate to qualify
it in terms of lives ruined -- in terms of savers whose hard work
and honest trust has been treated like a joke; in terms of
elderly people whose faith in the future has been repaid with
bitter poverty at life's end.
6
It is your duty, your sacred duty, to right these wrongs, to
stand up for the vulnerable against the unscrupulous, the
guileless against the conniving. We will not rest until the
cheats, the chiselers and the charlatans spend a large chunk of
their lives behind the bars of a federal compound.
You do a difficult job in a spirit of professionalism. I
can only thank you, on behalf of all Americans, for your
dedication -- your dedication to justice.
Thank you for coming to Washington. May God bless each and
every one of you, and may God bless America.
#
#
#
Davis/Blymire
June 20, 1990
Title: Justice
Draft: Three
PRESIDENTIAL ADDRESS: U.S. ATTORNEYS, GREAT HALL, JUSTICE
11:20 a.m., Friday, June 22
((Acknowledgements))
((You know what? When I told my grandkids that I'd be
spending time with some of America's finest crime-fighters, one
of them asked me if I would be sure and bring them back an
autograph 11
from Dick Tracy. )) III
Well, true villains are drawn from life, not from primary
colors. And where financial fraud is concerned, it takes a
discerning mind and an open heart to distinguish the incompetent
from the fraudulent, the unlucky from the unlawful. This nation
is very fortunate to be able to look to you -- the U.S. Attorneys
of America -- to make these tough calls. We depend on you to
sift through piles upon voluminous piles of documents, and
understand that in the cold numbers of a ledger can be found the
tragedy of an embezzled pension, the heartache of a stolen home.
White-collar crime is not as dramatic as violent crime. But
white-collar crime still ruins lives. It murders the fondest
dreams of whole families. It takes a snake, a cold-blooded
snake, to betray the trust and innocence of hard-working people.
And so if we have to look under rocks to find white-collar
criminals, then we will leave no stone unturned.
2
This Administration, from our first days in office, has
worked with Congress to crack down on white-collar criminals. To
crack down on pinstriped bankers who launder the smell of blood
out of drug money, and white-collar crooks who cheat the elderly
out of their life's hard work. To bring to justice government
contractors who steal by the numbers.
You already know of the ((number)) of convictions from the
Ill-Wind probe of federal defense contractors. You already know
that ((example of crackdown on drug financiers) ) You already
know that among cases involving abuse of HUD contracts, the
Department of Justice has already obtained ((number) ) of
convictions in Oklahoma alone, while courts have ordered almost
two and one-half million dollars in restitution in that state --
more than half of which will come from a bank president who has a
five-year reservation in prison. In all, the government has won
10,000 financial fraud convictions since 1985. And just last
year alone, the Department of Justice aggressively won almost 800
convictions in major financial fraud cases -- cases involving
more than $100,000.
When I took office, we also knew that something terribly
wrong had happened in the Savings and Loan industry. And so, on
the ( (xxth) ) day of my Administration, I directed Attorney-
General Thornburgh to give these cases the highest priority. And
he did. When it comes to civil action, we have sought
restitution for depositors and taxpayers alike through tens of
thousands of civil suits leveled against S&L executives, owners
3
and borrowers. And when it comes to criminal action, we aim for
a simple, uncompromising position -- throw the crooks in jail.\\
This aggressive attitude is paying off. In three years,
we've won 3,299 S&L convictions -- $100 million ordered in
restitution -- more than four centuries in prison terms meted
out. And, I promise you this -- there will be more, much more.
Consider all that is happening: An S&L Chairman gets 30
years in a celebrated case in Dallas. An S&L CEO in Santa Rosa
is sentenced to prison, and the courts order almost $7 million in
fines and restitution. In Illinois, top officers of an S&L go to
prison, and are ordered to repay $17 million. These cheats have
cost us billions. They will pay us back in billions, and they
will pay us back in years.
These are the results of a determined effort -- an effort
which we are boosting with 153 FBI agents, 100 FBI accounting
technicians and 118 Assistant U.S. Attorneys. The Dallas Task
Force has been particularly successful, obtaining 52 convictions;
so successful, in fact, that Attorney-General Thornburgh is
expanding the task force concept to 37 other U.S. Attorney's
offices around the country.
And because of Secretary Brady's leadership, the IRS is
aggressively pursuing individuals suspected of tax fraud in
connection with failed savings and loan institutions; while the
Resolution Trust Corporation is adding about 300 members to its
investigative staff this year, to become part of a new national
investigative network. Treasury's Office of Thrift Supervision
4
has also required 664 institutions to agree to terminate unsafe
and unsound practices, removed more than 150 senior thrift
officers and directors, and issued 111 cease and desist orders to
stop unsafe and unsound practices.
Throughout it all, our men and women in the federal agencies
are doing a great job, from the halls of Justice and Treasury, to
the passport clerk who recovered $3 million in cash, jewelry and
gold by keeping a former savings and loan owner from skipping the
country.
We are learning a lot from our successes, including how much
more there is to do. So I am here, today, to back new
legislative and Administration action -- further ways we can
crack down on white-collar crime.
First, let me declare my support of an amendment to the
crime bill to enhance and enforce the civil and criminal
penalties for fraud against financial institutions. This
legislation, sponsored by Minority Leaders Bob Dole and Bob
Michel, and Senators Heinz and Garn, will intensify the resources
of the United States government in the service of justice.
These leaders of Congress and I want to authorize $25
million increase for the IRS and Department of Justice so we can
intensify their already vigorous investigations. We want to
allow the use of wiretaps in investigating bank fraud. We
also want Congress to authorize federal regulatory agencies to
ask the courts to freeze the corporate and personal assets of
defendants in civil cases -- so that they will not leave the
5
taxpayers high and dry. And we want to prohibit the use of
bankruptcy as a strategy to avoid paying damages to the rightful
recipients -- the depositors.
These are some of the legislative steps we can and must
take. We can also build on our recent successes by taking
further administrative action. The Attorney-General will
establish, within the Department of Justice, a new unit to direct
and sharpen the Department's actions even further, while helping
to coordinate actions with other agencies. And where new
problems emerge in S&Ls, we will need to get involved fast.
That's why Attorney-General Thornburgh and Secretary Brady have
created a new approach -- a strike force against fraud -- teams
of razor-sharp prosecutors and auditors recruited from their
departments and other agencies -- striking city by city -- teams
that will jump right into the paper chase, teams that will hit
the trail while it's still hot.
I have seen for myself that the men and women of these two
departments are working together because you share a tenacious
spirit, born of a thirst for justice. of course, we always
quantify the importance of our work together in terms of billions
of dollars lost. But, perhaps it is more appropriate to qualify
it in terms of lives ruined -- in terms of savers whose hard work
and honest trust has been treated like a joke; in terms of
elderly people whose faith in the future has been repaid with
bitter poverty at life's end.
6
It is your duty, your sacred duty, to right these wrongs, to
stand up for the vulnerable against the unscrupulous, the
guileless against the conniving. We will not rest until the
cheats, the chiselers and the charlatans spend a large chunk of
their lives behind the bars of a federal compound. 111
You do a difficult job in a spirit of professionalism. I
can only thank you, on behalf of all Americans, for your
dedication -- your dedication to justice.
Thank you for coming to Washington. May God bless each and
every one of you, and may God bless America.
#
#
#
THE WHITE HOUSE
WASHINGTON
June 21, 1990
MEMORANDUM FOR CHRISS WINSTON
FROM:
AUSTEN FURSE A7
SUBJECT:
U.S. Attorneys, Great Hall, Justice
There is some excellent writing in this draft. Three
particular instances are noted below:
pg. 1, para. 3, line 5
"It takes a snake to betray
the trust and innocence of hard-working people. And so if
we have to look under rocks to find white-collar
criminals
"
A terrific and surprising play on this image.
2,1,3
"
who launder the smell of blood out of drug
money "
This is especially vivid and worth using again.
6,1,2
"
for the vulnerable against the unscrupulous,
the guileless against the conniving."
A particularly deft use of the language in the way each
pair of nouns shares a similar sound.
###
EE 2/d 12 NO as
Davis/Blymire
June 20, 1990
Title: Justice
Draft: Two
PRESIDENTIAL ADDRESS: U.S. ATTORNEYS, GREAT HALL, JUSTICE
11:20 a.m., Friday, June 22
((Acknowledgements))
((You know what? When I told my grandkids that I'd be
spending time with some of America's finest crime-fighters, one
of them asked me if I would be sure and bring them back an
autograph 11
from Dick Tracy.)
Well, true villains are drawn from life, not from primary
colors. And where financial fraud is concerned, it takes a
discerning mind and an open heart to distinguish the incompetent
from the fraudulent, the unlucky from the unlawful. This nation
is very fortunate to be able to look to you -- the U.S. Attorneys
of America -- to make these tough calls. We depend on you to
sift through piles upon voluminous piles of documents, and
understand that in the cold numbers of a ledger can be found the
tragedy of an embezzled pension, the heartache of a stolen home.
as asviolent crame,
White-collar crime is not dramatic. But white-collar crime
still ruins lives. It murders the fondest dreams of whole
families. It also takes a very strange type of creature to
hard
betray the trust and innocence of working, people. And so if we
have to look under rocks to find white-collar criminals, then we
will leave no stone unturned. III
2
This Administration, from our first days in office, has
white collar creme,
worked with Congress to crack down on Savings and Loan swindlers
To crack down on pinstriped bankers who launder the smell of
blood out of drug money, and white-collar crooks who cheat the
elderly out of their life's hard work. To bring to justice
government contractors who steal by the numbers.
You already know of the ((number)) of convictions from the
Ill-Wind probe of federal defense contractors. You already know
that ((example of crackdown on drug financiers) You already
know that among cases involving abuse of HUD contracts, the
Department of Justice has already obtained ( (number) ) of
convictions in Oklahoma alone, while courts have ordered almost
two and one-half million dollars in restitution in that state --
more than half of which will come from a bank president who has a
five-year reservation in prison. In all, the government has won
10,000 financial fraud convictions since 1985. And just last
year alone, the Department of Justice aggressively won almost 800
convictions in major financial fraud cases -- cases involving
more than $100,000.
When I took office, we also knew that something terribly
wrong had happened in the Savings and Loan industry. And so, on
the ((xxth) ) day of my Administration, I directed Attorney-
General Thornburgh to give these cases the highest priority. And
he did. When it comes to civil action, we have sought
restitution for depositors and taxpayers alike through tens of
thousands of civil suits leveled against S&L executives, owners
3
and borrowers. And when it comes to criminal action, we aim for
crooks
a simple, uncompromising position -- throw the scoundrels in
jail.
This aggressive attitude is paying off. In three years,
we've won 3,299 S&L convictions -- $100 million ordered in
restitution -- more than four centuries in prison terms meted
out. And, I promise you this -- there will be more, much more.
Consider all that is happening: An S&L Chairman gets 30
years in a celebrated case in Dallas. An S&L CEO in Santa Rosa
is sentenced to prison, and the courts order almost $7 million in
fines and restitution. In Illinois, top officers of an S&L go to
prison, and are ordered to repay $17 million. These cheats have
cost us billions. They will pay us back in billions, and they
will pay us back in years.
These are the results of a determined effort -- an effort
which we are boosting with 153 FBI agents, 100 FBI accounting
technicians and 118 Assistant U.S. Attorneys. The Dallas Task
Force has been particularly successful, obtaining 52 convictions;
so successful, in fact, that Attorney-General Thornburgh is
expanding the task force concept to 37 other U.S. Attorney's
offices around the country.
And because of Secretary Brady's leadership, the IRS
will
aggressively pursug/individuals suspected of tax fraud in
connection with failed savings and loan institutions; while the
Resolution Trust Corporation is adding about 300 members to its
investigative staff this year, to become part of a new national
4
investigative network. Treasury's Office of Thrift Supervision
has also required 664 institutions to agree to terminate unsafe
and unsound practices, removed more than 150 senior thrift
officers and directors, and issued 111 cease and desist orders to
stop unsafe and unsound practices.
Throughout it all, our men and women in the federal agencies
are doing a great job, from the highest levels of Justice and
Treasury, right down to the passport clerk who recovered $3
million in cash, jewelry and gold by keeping a former savings and
loan owner from skipping the country.
We are learning a lot from our successes, including how much
more there is to do. So I am here today to back new legislative
and administration action -- further ways we can crack down on
white-collar crime.
First, let me declare my support of an amendment to the
crime bill to enhance and enforce the civil and criminal
penalties for fraud against financial institutions. This
legislation, sponsored by Minority Leaders Bob Dole and Bob
Michel, and Senators Heinz and Garn, will intensify the resources
of the United States government in the service of justice.
These leaders of Congress and I want to authorize $25
increase
million for the IRS and Department of Justice so we can intensify
their already vigorous investigations. III We want to allow the
use of wiretaps in investigating bank fraud. We also want
Congress to authorize federal regulatory agencies to ask the
courts to freeze the corporate and personal assets of defendants
5
in civil cases -- so that they will not leave the taxpayers high
and dry. And we want to prohibit the use of bankruptcy as a
strategy to avoid paying damages to the rightful recipients --
the depositors.
These are some of the legislative steps we can and must
take. We can also build on our recent successes by taking
further administrative action. The Attorney-General will
establish, within the Department of Justice, a new unit to direct
and sharpen the Department's actions even further, while helping
to coordinate actions with other agencies. And where new
problems emerge in S&Ls, we will need to get involved fast.
have
That's why Attorney-General Thornburgh and Secretary Brady are
Created new approved - astribetore against fraud
vetting teams of razor-sharp prosecutors and auditors from their
departments and other agencies teams that will travel striling from
city by to city -- teams that will jump right into the paper chase,
teams that will hit the trail while it's still hot.
I have seen for myself that the men and women of these two
departments are working together because you share a tenacious
spirit, born of a thirst for justice. Of course, we always
quantify the importance of our work together in terms of billions
of dollars lost. But, perhaps it is more appropriate to qualify
it in terms of lives ruined -- in terms of savers whose hard work
and honest trust has been treated like a joke; in terms of
elderly people whose faith in the future has been repaid with
bitter poverty at life's end.
6
It is your duty, your sacred duty, to right these wrongs, to
stand up for the vulnerable against the unscrupulous, the
guileless against the conniving. We will not rest until the
cheats, the chiselers and the charlatans spend a large chunk of
their lives behind the bars of a federal compound. 111
You do a difficult job in a spirit of professionalism. I I
wish T could offer you a reward equal to the hard and necessary
service you render to the nation. I can only thank you, on
behalf of all Americans, for your dedication -- your dedication
to justice.
Thank you for coming to Washington. May God bless each and
every one of you, and may God bless America.
#
#
#
Davis/Blymire
June 20, 1990
Title: Justice
Draft: Four
PRESIDENTIAL ADDRESS: U.S. ATTORNEYS, GREAT HALL, JUSTICE
11:20 a.m., Friday, June 22
((Acknowledgements))
((You know what? When I told my grandkids that I'd be
spending time with some of America's finest crime-fighters, one
of them asked me if I would be sure and bring them back an
autograph 11
from Dick Tracy.) ) 111
Well, true villains are drawn from life, not from primary
colors. And where financial fraud is concerned, it takes a
discerning mind and a determined spirit to distinguish the
incompetent from the fraudulent, the unlucky from the unlawful.
This nation is very fortunate to be able to look to you -- the
U.S. Attorneys of America -- to make these tough calls. We
depend on you, as you work with the FBI and other investigative
and regulatory agencies, to sift through piles upon piles of
documents, and understand that in the cold numbers of a ledger
can be found the tragedy of an embezzled pension, the heartache
of stolen savings.
White-collar crime is not as dramatic as violent crime. But
white-collar crime still ruins lives. It murders the fondest
dreams of whole families. It takes a snake, a cold-blooded
snake, to betray the trust and innocence of hard-working people.
2
And so if we have to look under rocks to find white-collar
criminals, then we will leave no stone unturned. 111
This Administration, from our first days in office, has
worked with Congress to crack down on white-collar criminals. To
crack down on fat cat financiers who launder the smell of blood
out of drug money, and white-collar crooks who cheat the elderly
out of their life's hard work. To bring to justice government
contractors who steal by the numbers.
You already know of the 37 convictions from the Ill-Wind
probe of federal defense contractors. You already know of the
127 people rounded up in Operation Polar Cap's crackdown on drug
today also
financiers. (And let me say, I wanted you here to ₄thank you --
because there are signs that we are starting, at long last, to
make progress in the war on drugs.) You already know that among
cases involving abuse of HUD contracts, the Department of Justice
has already obtained 65 convictions this fiscal year, including
21 convictions in Oklahoma alone, while courts have ordered
almost two and one-half million dollars in restitution in that
state --more than half of which will come from a bank president
who has a five-year reservation in prison. In all, the
government has won 10,000 financial fraud convictions since 1985.
And just last year alone, the Department of Justice aggressively
won almost 800 convictions in major financial institution fraud
cases -- cases involving more than $100,000 each.
((When I took office, we also knew that something terribly
wrong had happened in the Savings and Loan industry. And perhaps
3
better than most, knew why In 1984, I headed a task force
that came forward with recommendations to reform the regulation
of financial services with more Executive control over the
regulators -- higher capital requirements, an end to phony
accounting standards, and steps to reform deposit insurance to
stop the forced subsidy of high risk operators by prudently
managed thrifts. Unfortunately, Congress ignored our proposals -
- in fact, moved in the opposite direction -- until last year. ))
( (Early in my Administration working closely with Congress,
we succeeded in obtaining many critical regulatory reforms. But
a great deal of wrong-doing had already occurred.) ) And so, -in-
also
the third week of my Administration, I directed Attorney-General
of 5# Fraud
Thornburgh to give these cases the highest priority. And he did.
When it comes to civil action, we have sought restitution to
protect taxpayers through tens of thousands of civil suits
leveled against S&L executives, owners and borrowers. And when
it comes to criminal action, we aim for a simple, uncompromising
position -- throw the crooks in jail.
This aggressive attitude is paying off. In three years,
over 3,000
we've won 3,299 S&L convictions -- $100 million ordered in
hundred years
restitution -- more than four centuries in prison terms meted
out. And, I know this -- because of you and your firm support,
there will be more, much more.
Consider all that is happening: An S&L Chairman gets 30
years in a celebrated case in Dallas. An S&L CEO in Santa Rosa
is sentenced to prison, and the courts order almost $7 million in
4
fines and restitution. In Illinois, top officers of an S&L go to
prison, and are ordered to repay $17 million. These dollas cheats have
cost us billions. They will pay us back with their billions, and
they will pay us back with years of their lives.
These are the result of a determined effort -- an effort
which we are boosting with 202 FBI agents, 100 more FBI
accounting technicians and 118 more United States Attorneys. The
Dallas Task Force has been particularly successful, obtaining 52
convictions; so successful, in fact, that Attorney-General
Thornburgh is expanding the task force concept to 37 cities.
[we
could have been moving even faster if Congress had not voted down
my request for $36.8 million in additional investigative and
prosecutive resources of for 1989, and had not delayed approval until this
November, to approve my request for $50 million for the current
fiscal year
And under Secretary Brady's leadership, the IRS is
aggressively pursuing individuals suspected of tax fraud in
connection with failed savings and loan institutions; while the
Resolution Trust Corporation is adding about 300 members to its
investigative staff this year, to become part of a new national
investigative network. The FDIC is pursuing more than 1,200
cases of fraud and negligence against thrift officials, attorneys
has
and accountants, and collected more than $120 million in damages
this year. Treasury's Office of Thrift Supervision has also
required 664 institutions to agree to terminate unsafe and
unsound practices, removed more than 150 senior thrift officers
5
and directors, and issued 111 cease and desist orders to stop
unsafe and unsound practices.
Throughout it all, our men and women in the federal agencies
are doing a great job, from the halls of Justice and Treasury, to
the passport clerk who recovered $3 million in cash, jewelry and
gold by keeping a former savings and loan owner from skipping the
country.
We are learning a lot from our successes, including how much
more there is to do. So I am here, today, to back new
legislative and Administration action -- further ways we can
crack down on white-collar crime.
First, let me declare my support for a proposed amendment to
the omnibus crime bill to enhance and enforce the civil and
criminal penalties for fraud against financial institutions.
This legislation, sponsored by Republican Leaders Bob Dole and
Bob Michel, and Senators Heinz and Garn, as well as Congressman
Wylie, will strengthen the resources our investigative and
prosecutorial tools in the service of justice. And it will
provide added protection to the victims of crime.
courtapproved
We want to allow the use of wiretaps in investigating bank
fraud. We also want Congress to authorize federal regulatory
agencies to ask the courts to freeze the corporate and personal
assets of defendants in civil cases involving financial
institution fraud -- so that they will not leave the taxpayers
high and dry. And we want to prevent rip-off artists from using
bankruptcy as a strategy to avoid paying damages.
6
These are some of the legislative steps we can and must
take. But we must also build on our recent successes by taking
further administrative action. The Attorney-General will
establish, within the Department of Justice, a new unit to direct
and sharpen the Department's actions even further, while helping
to coordinate actions with other agencies.
where
new
problems emerge in S&Ls, we will need to get involved fast.
That's why Attorney-General Thornburgh and Secretary Brady have
created a new approach -- Rapid Response Teams against fraud --
teams of razor-sharp prosecutors and auditors recruited from
their departments and other agencies -- striking city by city --
0
teams that will jump right into the paper chase, teams that will
the troils
the
hit the trail while it's still hot.
These teams will be deployed to help you -- the U.S.
Attorneys. And I am confident they will work well with you. I
have already seen the men and women of these two departments
working together, sharing a tenacious spirit, born of a thirst
for justice. of course, we always quantify the importance of our
work together in terms of billions of dollars lost. But, perhaps
it is more appropriate to remember why this mission is so
important to so many people -- a thought that will sustain you in
the months to come, as you sip cold coffee long after everyone
else has gone home. You will be working late because you will
not let those people be forgotten -- savers whose hard work and
honest trust has been treated like a joke; elderly people whose
faith in the future has been repaid with bitter poverty.
7
It is your duty, your sacred duty, to right these wrongs, to
stand up for the vulnerable against the unscrupulous, the
guileless against the conniving. We will not rest until the
cheats, the chiselers and the charlatans spend a large chunk of
their lives behind the bars of a federal prison. III
You do a difficult job in a spirit of professionalism. I
can only thank you, on behalf of all Americans, for your
dedication -- your dedication to justice.
Thank you for coming to Washington. May God bless each and
every one of you, and may God bless America.
#
#
#
-JUN-22-1990 09:48 FROM JCC WASH DC 202 514 4699 TO
94562223
P.02
FOR IMMEDIATE RELEASE
THORNBURGH AND BRADY HIGHLIGHT SAVINGS AND LOAN PROSECUTIONS
WASHINGTON, D.C. -- Attorney General Dick Thornburgh and
Secretary of the Treasury Nicholas F. Brady today detailed the
Administration's plans to intensify their fight against savings
and loan fraud.
Additional steps announced today include:
--Seeking additional legislation, in cooperation with
Senators Robert Dole, Jake Garn and John Heinz and Reps. Robert
H. Michel and Chalmers Wylie to enhance investigation and
prosecution of savings and loan cases.
--Establishing a senior interagency group to assist in
targeting of the most significant cases for investigation and
prosecution.
--Establishing a "rapid response team" of federal agents to
move immediately in joint enforcement efforts.
--Appointment, by Thornburgh, of James G. Richmond, U.S.
Attorney for the Northern District of Indiana, to fill a new
position of Special Counsel for Financial Institutions. In this
role, Richmond will coordinate the Department of Justice's
savings and loan investigative and prosecutive efforts.
"The United States government made a promise to millions of
Americans," Secretary Brady said. "We promised to protect their
savings deposited in a federally-insured savings and loan. Now
we are making good on that promise.
JUN-22-1990 09:48 FROM JCC WASH DC 202 514 4699 TO
94562223
P.03
"Those of us who are working on implementation of the
savings and loan legislation are guided by three principles:
First, we will make sure that the millions of men and
women who put their life savings in savings and loan
institutions are protected to the full extent of their
federal deposit insurance.
Second, we will do all within our power to do the job
at the least cost to the taxpayer.
--
Third, we will aggressively pursue and prosecute the
crooks and fraudulent operators who helped create the
S&L problem."
In his remarks to a meeting of the nation's top federal
prosecutors, Thornburgh praised the work of the Department's
white-collar crime investigators and prosecutors, while urging
them to move forward expeditiously on savings and loan cases.
"Despite Congressional delays and funding shortfalls, I am
satisfied that our investigators and prosecutors are focusing a
maximum effort on these complicated cases," Thornburgh said.
"Shortly after taking office, I instituted a review of our
entire white-collar crime effort. This lead, among other things,
to a request, within three weeks of the inauguration of President
Bush, for additional resources for our savings and loan
investigative and prosecutive efforts.
"While we eventually received an additional $49 million from
the Congress for these efforts late last year, the Congress
failed to provide the $36.8 million in start-up money we sought a
year ago. As a result, strengthening of our efforts to go after
the savings and loan rip-off artists was delayed by nine months,"
Thornburgh said.
JUN-22-1990 09:49 FROM JCC WASH DC 202 514 4699 TO
94562223
P.04
"Our task forces are now in place and moving forward. The
Federal Bureau of Investigation (FBI) is currently investigating
the circumstances surrounding the failure of 530 financial
institutions. Some 220 experienced FBI agents are being
transferred to these cases and an additional 148 prosecutors are
being hired.
"We will use the full reach of the law to go after those who
manipulated other people's money by fraud, bribery and corruption
and whose actions contributed to the failure of too many of our
savings and loan institutions, requiring the taxpayers to pick up
the bill.
"These malefactors of great fraud must be extricated, like
financial fugitives, from the ruin they have made of the savings
and loan industry," Thornburgh said. "We must clear away the webs
of deceit built by these scheming predators upon the American
people's individual dreams and financial faith. We must undo the
large harm done our country's legitimate wealth--as well as the
public trust--by these wrongdoers.
"This is the charge we have received from President Bush and
as the nation's federal prosecutors it is our responsibility to
vigorously and faithfully enforce the laws against this new breed
of white collar criminals," Thornburgh told the U.S. Attorneys.
"Regulators, federal law enforcement officials, and the U.S.
Attorneys are working as a team in this commitment to clean up
the fraud and maintain the confidence of the American people in
thrift institutions," Secretary Brady said.
JUN-22-1990 09:49 FROM JCC WASH DC 202 514 4699 TO
94562223
P.05
"TO assist the Department of Justice in its efforts to put
fraudulent operators behind bars, OTS is prioritizing criminal
referrals. This will focus resources and expertise on the most
egregious cases of fraud and abuse of the public trust," Brady
concluded.
Attached are three fact sheets:
--
New Legislative Proposals
---
New Administrative Actions
---
Update on Federal Actions
U.S. ATTORNEYS, GREAT HALL DEPARTMENT OF JUSTICE
11:20 A.M. / FRIDAY, JUNE 22
(THANK YOU, SECRETARY BRADY -- NICK -- AND
ATTORNEY-GENERAL THORNBURGH -- DICK.))
((YOU KNOW WHAT? WHEN I TOLD MY GRANDKIDS THAT
I'D BE SPENDING TIME WITH SOME OF AMERICA'S FINEST
CRIME-FIGHTERS, ONE OF THEM ASKED ME IF I WOULD BE SURE
AND BRING THEM BACK AN AUTOGRAPH 11 ...
FROM DICK
TRACY.)) III
WELL, TRUE VILLAINS ARE DRAWN FROM LIFE, NOT FROM
PRIMARY COLORS. AND WHERE FINANCIAL FRAUD IS
CONCERNED, IT TAKES A DISCERNING MIND AND A DETERMINED
SPIRIT TO DISTINGUISH THE INCOMPETENT FROM THE
FRAUDULENT, THE UNLUCKY FROM THE UNLAWFUL. THIS NATION
IS VERY FORTUNATE TO BE ABLE TO LOOK TO YOU -- THE U.S.
ATTORNEYS OF AMERICA -- TO MAKE THESE TOUGH CALLS. WE
DEPEND ON YOU, AS YOU WORK WITH THE FBI AND OTHER
INVESTIGATIVE AND REGULATORY AGENCIES, TO SIFT THROUGH
PILES UPON PILES OF DOCUMENTS, AND UNDERSTAND THAT IN
THE COLD NUMBERS OF A LEDGER CAN BE FOUND THE TRAGEDY
OF AN EMBEZZLED PENSION, THE HEARTACHE OF STOLEN
SAVINGS.
- 2 -
WHITE-COLLAR CRIME IS NOT AS DRAMATIC AS VIOLENT
CRIME. BUT WHITE-COLLAR CRIME STILL RUINS LIVES. IT
MURDERS THE FONDEST DREAMS OF WHOLE FAMILIES. IT TAKES
A SNAKE, A COLD-BLOODED SNAKE, TO BETRAY THE TRUST AND
INNOCENCE OF HARD-WORKING PEOPLE. AND so IF WE HAVE TO
LOOK UNDER ROCKS TO FIND WHITE-COLLAR CRIMINALS, THEN
WE WILL LEAVE NO STONE UNTURNED. III
THIS ADMINISTRATION, FROM OUR FIRST DAYS IN
OFFICE, HAS WORKED WITH CONGRESS TO CRACK DOWN ON
WHITE-COLLAR CRIMINALS. TO CRACK DOWN ON FAT CAT
FINANCIERS WHO LAUNDER THE SMELL OF BLOOD OUT OF DRUG
MONEY, AND WHITE-COLLAR CROOKS WHO CHEAT THE ELDERLY
OUT OF THEIR LIFE'S HARD WORK. TO BRING TO JUSTICE
GOVERNMENT CONTRACTORS WHO STEAL BY THE NUMBERS.
- 3 -
YOU ALREADY KNOW OF THE 37 CONVICTIONS FROM THE
ILL-WIND PROBE OF FEDERAL DEFENSE CONTRACTORS. YOU
ALREADY KNOW OF THE 127 PEOPLE ROUNDED UP IN OPERATION
POLAR CAP'S CRACKDOWN ON DRUG FINANCIERS. (AND LET ME
SAY, I WANTED YOU HERE TODAY TO ALSO THANK YOU --
BECAUSE THERE ARE SIGNS THAT WE ARE STARTING, AT LONG
LAST, TO MAKE PROGRESS IN THE WAR ON DRUGS.) YOU
ALREADY KNOW THAT AMONG CASES INVOLVING ABUSE OF HUD
CONTRACTS, THE DEPARTMENT OF JUSTICE HAS ALREADY
OBTAINED 65 CONVICTIONS THIS FISCAL YEAR, INCLUDING 21
CONVICTIONS IN OKLAHOMA ALONE, WHILE COURTS HAVE
ORDERED ALMOST TWO AND ONE-HALF MILLION DOLLARS IN
RESTITUTION IN THAT STATE -- MORE THAN HALF OF WHICH
WILL COME FROM AN EXECUTIVE WHO HAS A FIVE-YEAR
RESERVATION IN PRISON. IN ALL, THE GOVERNMENT HAS WON
10,000 FINANCIAL FRAUD CONVICTIONS SINCE 1985. AND
JUST LAST YEAR ALONE, THE DEPARTMENT OF JUSTICE
AGGRESSIVELY WON ALMOST 800 CONVICTIONS IN MAJOR
FINANCIAL INSTITUTION FRAUD CASES -- CASES INVOLVING
MORE THAN $100,000 EACH.
- 4 -
BUT THE MOST CRITICAL FINANCIAL FRAUD PROBLEM WE
FACED WAS THE SAVINGS AND LOAN CRISIS. WORKING CLOSELY
WITH CONGRESS, WE SUCCEEDED IN OBTAINING MANY CRITICAL
REGULATORY REFORMS. BUT A GREAT DEAL OF WRONG-DOING
HAD ALREADY OCCURRED. AND so, IN THE THIRD WEEK OF MY
ADMINISTRATION, I DIRECTED ATTORNEY-GENERAL THORNBURGH
TO GIVE CASES OF S&L FRAUD THE HIGHEST PRIORITY. AND
HE DID. WHEN IT COMES TO CIVIL ACTION, WE HAVE SOUGHT
RESTITUTION TO PROTECT TAXPAYERS THROUGH TENS OF
THOUSANDS OF CIVIL SUITS LEVELED AGAINST S&L
EXECUTIVES, OWNERS AND BORROWERS. AND WHEN IT COMES TO
CRIMINAL ACTION, WE AIM FOR A SIMPLE, UNCOMPROMISING
POSITION -- THROW THE CROOKS IN JAIL. III
THIS AGGRESSIVE ATTITUDE IS PAYING OFF. IN THREE
YEARS, WE'VE WON MORE THAN 150 S&L CONVICTIONS -- $100
MILLION ORDERED
IN RESTITUTION -- MORE THAN FOUR HUNDRED YEARS IN
PRISON TERMS METED OUT. AND, I KNOW THIS -- BECAUSE OF
YOU AND YOUR FIRM SUPPORT, THERE WILL BE MORE, MUCH
MORE,
- 5 -
CONSIDER ALL THAT IS HAPPENING: AN S&L CHAIRMAN
GETS 30 YEARS IN A CELEBRATED CASE IN DALLAS. AN S&L
CEO IN SANTA ROSA IS SENTENCED TO PRISON, AND THE
COURTS ORDER ALMOST $7 MILLION IN FINES AND
RESTITUTION. IN ILLINOIS, TOP OFFICERS OF AN S&L GO TO
PRISON, AND ARE ORDERED TO REPAY $17 MILLION. THESE
CHEATS HAVE COST US BILLIONS. THEY WILL PAY US BACK
WITH THEIR DOLLARS, AND THEY WILL PAY US BACK WITH
YEARS OF THEIR LIVES.
THESE PROSECUTIONS ARE THE RESULT OF A DETERMINED
EFFORT -- AN EFFORT WHICH WE ARE BOOSTING WITH 202 FBI
AGENTS, 100 MORE FBI ACCOUNTING TECHNICIANS AND 118
MORE UNITED STATES ATTORNEYS. THE DALLAS TASK FORCE
HAS BEEN PARTICULARLY SUCCESSFUL, OBTAINING 52
CONVICTIONS; so SUCCESSFUL, IN FACT, THAT
ATTORNEY-GENERAL THORNBURGH IS EXPANDING THE TASK FORCE
CONCEPT TO 27 CITIES. WE COULD HAVE BEEN MOVING EVEN
FASTER BUT CONGRESS DID NOT ACT ON MY REQUEST FOR $36.8
MILLION IN ADDITIONAL INVESTIGATIVE AND PROSECUTORIAL
RESOURCES FOR 1989. FURTHER, APPROVAL OF MY REQUEST
FOR $50 MILLION FOR THE CURRENT FISCAL YEAR WAS
DELAYED.
- 6 -
UNDER SECRETARY BRADY'S LEADERSHIP, THE IRS IS
AGGRESSIVELY PURSUING INDIVIDUALS SUSPECTED OF TAX
FRAUD IN CONNECTION WITH FAILED SAVINGS AND LOAN
INSTITUTIONS; WHILE THE RESOLUTION TRUST CORPORATION IS
ADDING ABOUT 300 MEMBERS TO ITS INVESTIGATIVE STAFF
THIS YEAR, TO BECOME PART OF A NEW NATIONAL
INVESTIGATIVE NETWORK. THE FDIC IS PURSUING MORE THAN
1,200 CASES OF FRAUD AND NEGLIGENCE AGAINST THRIFT
OFFICIALS, ATTORNEYS AND ACCOUNTANTS, AND HAS COLLECTED
MORE THAN $120 MILLION IN DAMAGES THIS YEAR.
TREASURY'S OFFICE OF THRIFT SUPERVISION HAS ALSO
REQUIRED 664 INSTITUTIONS TO AGREE TO TERMINATE UNSAFE
AND UNSOUND PRACTICES, REMOVED MORE THAN 150 SENIOR
THRIFT OFFICERS AND DIRECTORS, AND ISSUED 111 CEASE AND
DESIST ORDERS TO STOP UNSAFE AND UNSOUND PRACTICES.
THROUGHOUT IT ALL, OUR MEN AND WOMEN IN THE
FEDERAL AGENCIES ARE DOING A GREAT JOB, FROM THE HALLS
OF JUSTICE AND TREASURY, TO THE PASSPORT CLERK WHO
RECOVERED $3 MILLION IN CASH, JEWELRY AND GOLD BY
KEEPING A FORMER SAVINGS AND LOAN OWNER FROM SKIPPING
THE COUNTRY.
- 7 -
WE ARE LEARNING A LOT FROM OUR SUCCESSES,
INCLUDING HOW MUCH MORE THERE IS TO DO. so I AM HERE,
TODAY, TO BACK NEW LEGISLATIVE AND ADMINISTRATION
ACTION -- FURTHER WAYS WE CAN CRACK DOWN ON
WHITE-COLLAR CRIME.
FIRST, LET ME DECLARE MY SUPPORT FOR A PROPOSED
AMENDMENT TO THE OMNIBUS CRIME BILL TO ENHANCE AND
ENFORCE THE CIVIL AND CRIMINAL PENALTIES FOR FRAUD
AGAINST FINANCIAL INSTITUTIONS. THIS LEGISLATION,
SPONSORED BY REPUBLICAN LEADERS BOB DOLE AND BOB
MICHEL, AND SENATORS HEINZ AND GARN, AS WELL AS
CONGRESSMEN HILER AND WYLIE, WILL STRENGTHEN OUR
INVESTIGATIVE AND PROSECUTORIAL TOOLS IN THE SERVICE OF
JUSTICE. AND IT WILL PROVIDE ADDED PROTECTION TO THE
VICTIMS OF CRIME.
- 8 -
WE WANT TO ALLOW THE USE OF COURT-APPROVED
WIRETAPS IN INVESTIGATING BANK FRAUD. WE ALSO WANT
CONGRESS TO AUTHORIZE FEDERAL REGULATORY AGENCIES TO
ASK THE COURTS TO FREEZE THE CORPORATE AND PERSONAL
ASSETS OF DEFENDANTS IN CIVIL CASES INVOLVING FINANCIAL
INSTITUTION FRAUD -- SO THAT THEY WILL NOT LEAVE THE
TAXPAYERS HIGH AND DRY. AND WE WANT TO PREVENT RIP-
OFF ARTISTS FROM USING BANKRUPTCY AS A STRATEGY TO
AVOID PAYING DAMAGES.
THESE ARE SOME OF THE LEGISLATIVE STEPS WE CAN AND
MUST TAKE. BUT WE MUST ALSO BUILD ON OUR RECENT
SUCCESSES BY TAKING FURTHER ADMINISTRATIVE ACTION. THE
ATTORNEY-GENERAL WILL ESTABLISH, WITHIN THE DEPARTMENT
OF JUSTICE, A NEW UNIT TO DIRECT AND SHARPEN THE
DEPARTMENT'S ACTIONS EVEN FURTHER, WHILE HELPING TO
COORDINATE ACTIONS WITH OTHER AGENCIES.
- 9 -
WHERE NEW PROBLEMS EMERGE IN S&LS, WE WILL NEED TO
GET INVOLVED FAST. THAT'S WHY ATTORNEY-GENERAL
THORNBURGH AND SECRETARY BRADY HAVE CREATED A NEW
APPROACH -- RAPID RESPONSE TEAMS AGAINST FRAUD -- TEAMS
OF RAZOR-SHARP PROSECUTORS AND AUDITORS RECRUITED FROM
THEIR DEPARTMENTS AND OTHER AGENCIES -- STRIKING CITY
BY CITY -- TEAMS THAT WILL JUMP RIGHT INTO THE PAPER
CHASE, TEAMS THAT WILL HIT THE TRAIL WHILE THE TRAIL'S
STILL HOT.
- 10 -
THESE TEAMS WILL BE DEPLOYED TO HELP YOU -- THE
U.S. ATTORNEYS. AND I AM CONFIDENT THEY WILL WORK WELL
WITH YOU. I HAVE ALREADY SEEN THE MEN AND WOMEN OF
THESE TWO DEPARTMENTS WORKING TOGETHER, SHARING A
TENACIOUS SPIRIT, BORN OF A THIRST FOR JUSTICE. OF
COURSE, WE ALWAYS QUANTIFY THE IMPORTANCE OF OUR WORK
TOGETHER IN TERMS OF BILLIONS OF DOLLARS LOST. BUT,
PERHAPS IT IS MORE APPROPRIATE TO REMEMBER WHY THIS
MISSION IS so IMPORTANT TO SO MANY PEOPLE -- A THOUGHT
THAT WILL SUSTAIN YOU IN THE MONTHS TO COME, AS YOU SIP
COLD COFFEE LONG AFTER EVERYONE ELSE HAS GONE HOME.
YOU WILL BE WORKING LATE BECAUSE YOU WILL NOT LET THOSE
PEOPLE BE FORGOTTEN -- SAVERS WHOSE HARD WORK AND
HONEST TRUST MUST BE PROTECTED; ELDERLY PEOPLE WHOSE
FAITH IN THE FUTURE MUST BE PRESERVED.
IT IS YOUR DUTY, YOUR SACRED DUTY, TO RIGHT THESE
WRONGS, TO STAND UP FOR THE VULNERABLE AGAINST THE
UNSCRUPULOUS, THE GUILELESS AGAINST THE CONNIVING. WE
WILL NOT REST UNTIL THE CHEATS, THE CHISELERS AND THE
CHARLATANS SPEND A LARGE CHUNK OF THEIR LIVES BEHIND
THE BARS OF A FEDERAL PRISON.
- 11 -
YOU DO A DIFFICULT JOB IN A SPIRIT OF
PROFESSIONALISM. I CAN ONLY THANK YOU, ON BEHALF OF
ALL AMERICANS, FOR YOUR DEDICATION -- YOUR DEDICATION
TO JUSTICE.
THANK YOU FOR COMING TO WASHINGTON. MAY GOD BLESS
EACH AND EVERY ONE OF YOU, AND MAY GOD BLESS AMERICA.
#
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To
stephanie L.
Date 6-21
Time 2:25p.
WHILE YOU WERE OUT
M Nolly W.
of
Phone
Area Code
Number
Extension
TELEPHONED
PLEASE CALL
2
CALLED TO SEE YOU
WILL CALL AGAIN
WANTS TO SEE YOU
URGENT
RETURNED YOUR CALL
Message going tobe
late comments w/ 3:00 p.m.
Operator
AMPAD
EFFICIENCY®
23-021 CARBONLESS
- 4 -
BUT THE MOST CRITICAL FINANCIAL FRAUD PROBLEM WE 'ie
FACED WAS THE SAVINGS AND LOAN CRISIS. WORKING CLOSELY
WITH CONGRESS, WE SUCCEEDED IN OBTAINING MANY CRITICAL
REGULATORY REFORMS. BUT A GREAT DEAL OF WRONG-DOING
HAD ALREADY OCCURRED. AND so, IN THE THIRD WEEK OF MY
ADMINISTRATION, I DIRECTED ATTORNEY-GENERAL THORNBURGH
TO GIVE CASES OF S&L FRAUD THE HIGHEST PRIORITY. AND
HE DID. WHEN IT COMES TO CIVIL ACTION, WE HAVE SOUGHT
RESTITUTION TO PROTECT TAXPAYERS THROUGH TENS OF
THOUSANDS OF CIVIL SUITS LEVELED AGAINST S&L
EXECUTIVES, OWNERS AND BORROWERS. AND WHEN IT COMES TO
CRIMINAL ACTION, WE AIM FOR A SIMPLE, UNCOMPROMISING
POSITION -- THROW THE CROOKS IN JAIL. III
THIS AGGRESSIVE ATTITUDE IS PAYING OFF. IN THREE
YEARS, WE'VE WON MORE THAN 150 S&L CONVICTIONS - -- $100
MILLION ORDERED
IN RESTITUTION - MORE THAN FOUR HUNDRED YEARS IN
PRISON TERMS METED OUT. AND, I KNOW THIS -- BECAUSE OF
YOU AND YOUR FIRM SUPPORT, THERE WILL BE MORE, MUCH
MORE, III
90
JUN21
THE WHITE HOUSE
WASHINGTON
P8:18
June 21, 1990
MEMORANDUM FOR THE PRESIDENT
THROUGH:
CHRISS WINSTON
cw
FROM:
MARK DAVIS MD
SUBJECT:
U.S. Attorneys
I.
SUMMARY
You will speak to about 200 people, including about 90 of the 93
U.S. Attorneys, with senior FBI and Treasury staff, at the Great
Hall at the Department of Justice at 11:20 a.m. Friday morning.
Your speech is about fourteen minutes long, and will be on
teleprompter.
II. DISCUSSION
This speech addresses all the Administration is doing to combat
many kinds of white-collar crime, including the prosecution of
S&L fraud. Please take special note of the section in double
brackets.
Davis/Blymire
June 20, 1990
90 JUN21 ₱8:51
Title: Justice
Draft: Four
PRESIDENTIAL ADDRESS: U.S. ATTORNEYS, GREAT HALL, JUSTICE
11:20 a.m., Friday, June 22
((Acknowledgements))
((You know what? When I told my grandkids that I'd be
spending time with some of America's finest crime-fighters, one
of them asked me if I would be sure and bring them back an
autograph 11
...
from Dick Tracy. ))
Well, true villains are drawn from life, not from primary
colors. And where financial fraud is concerned, it takes a
discerning mind and a determined spirit to distinguish the
AJ is
All cleared
except DOJ:
H
They preferred
incompetent from the fraudulent, the unlucky from the unlawful.
"bad indgment"
This nation is very fortunate to be able to look to you -- the
U.S. Attorneys of America -- to make these tough calls. We
depend on you, as you work with the FBI and other investigative
and regulatory agencies, to sift through piles upon piles of
documents, and understand that in the cold numbers of a ledger
can be found the tragedy of an embezzled pension, the heartache
of stolen savings.
White-collar crime is not as dramatic as violent crime. But
white-collar crime still ruins lives. It murders the fondest
All cleared
except DOJ;
dreams of whole families. It takes a snake, a cold-blooded
They wanted
AS is
to delete.
snake, to betray the trust and innocence of hard-working people.
2
And so if we have to look under rocks to find white-collar
criminals, then we will leave no stone unturned. III
This Administration, from our first days in office, has
worked with Congress to crack down on white-collar criminals. To
original
said
As
striped
crack down on fat cat financiers who launder the smell of blood
bankers'
IS
out of drug money, and white-collar crooks who cheat the elderly
out of their life's hard work. To bring to justice government
contractors who steal by the numbers.
You already know of the 37 convictions from the Ill-Wind
probe of federal defense contractors. You already know of the
127 people rounded up in Operation Polar Cap's crackdown on drug
financiers. (And let me say, I wanted you here today to also
thank you -- because there are signs that we are starting, at
long last, to make progress in the war on drugs.) You already
know that among cases involving abuse of HUD contracts, the
Department of Justice has already obtained 65 convictions this
fiscal year, including 21 convictions in Oklahoma alone, while
courts have ordered almost two and one-half million dollars in
restitution in that state -- more than half of which will come
from a bank president who has a five-year reservation in prison.
In all, the government has won 10,000 financial fraud convictions
since 1985. And just last year alone, the Department of Justice
aggressively won almost 800 convictions in major financial
institution fraud cases -- cases involving more than $100,000
each.
3
Boyden wanted
(When I took office, we also knew that something terribly
This inserted.
OMB opposes
wrong had happened in the Savings and Loan industry. In 1984, I
as does Legis.
Affairs. They
headed a task force that came forward with recommendations to
point out that
Hill feels
deregulation helped
reform the regulation of financial services with more Executive
cause problem,
and this
control over the regulators -- higher capital requirements, an
identifies you
with it. (Also
higher capital
end to phony accounting standards, and steps to reform deposit
requirement was
to be phased m
insurance to stop the forced subsidy of high risk operators by
over 7 years.)
Legislative and
prudently managed thrifts. Unfortunately, Congress ignored our
Rogers oppose
last sentence
blaming Congress.
proposals -- in fact, moved in the opposite direction until
last year. ) )
((Working closely with Congress, we succeeded in obtaining
many critical regulatory reforms. But a great deal of wrong-
doing had already occurred.) And so, in the third week of my
Administration, I also directed Attorney-General Thornburgh to
give cases of S&L fraud the highest priority. And he did. When
it comes to civil action, we have sought restitution to protect
taxpayers through tens of thousands of civil suits leveled
against S&L executives, owners and borrowers. And when it comes
to criminal action, we aim for a simple, uncompromising position
-- throw the crooks in jail.
This aggressive attitude is paying off. In three years,
we've won more than 3,000 S&L convictions -- $100 million ordered
in restitution -- more than four hundred years in prison terms
meted out. And, I know this -- because of you and your firm
support, there will be more, much more.
BUT THE MUST CRITICAL FINANCIAC
RRAUD problemce found was
the SAVINGS HOANDRISTS
4
Consider all that is happening: An S&L Chairman gets 30
years in a celebrated case in Dallas. An S&L CEO in Santa Rosa
is sentenced to prison, and the courts order almost $7 million in
fines and restitution. In Illinois, top officers of an S&L go to
prison, and are ordered to repay $17 million. These cheats have
cost us billions. They will pay us back with their dollars, and
they will pay us back with years of their lives.
These prosecutions are the result of a determined effort --
an effort which we are boosting with 202 FBI agents, 100 more FBI
accounting technicians and 118 more United States Attorneys. The
Dallas Task Force has been particularly successful, obtaining 52
convictions; so successful, in fact, that Attorney-General
Thornburgh is expanding the task force concept to 37 cities. ( (We
Insert from
but
didnot act on
Justice others
could have been moving even faster is Congress had not gnored my
oppose the
criticism request for $36.8 million in additional investigative and
congress.
prosecutorial resources for 1989, and had not delayed approval,
Further, Approval
until last November, of my request for $50 million for the
current fiscal year wordelayad was delayed.
Under Secretary Brady's leadership, the IRS is aggressively
pursuing individuals suspected of tax fraud in connection with
failed savings and loan institutions; while the Resolution Trust
Corporation is adding about 300 members to its investigative
staff this year, to become part of a new national investigative
network. The FDIC is pursuing more than 1,200 cases of fraud and
negligence against thrift officials, attorneys and accountants,
and has collected more than $120 million in damages this year.
5
Treasury's Office of Thrift Supervision has also required 664
institutions to agree to terminate unsafe and unsound practices,
removed more than 150 senior thrift officers and directors, and
issued 111 cease and desist orders to stop unsafe and unsound
practices.
Throughout it all, our men and women in the federal agencies
are doing a great job, from the halls of Justice and Treasury, to
the passport clerk who recovered $3 million in cash, jewelry and
gold by keeping a former savings and loan owner from skipping the
country.
We are learning a lot from our successes, including how much
more there is to do. So I am here, today, to back new
legislative and Administration action -- further ways we can
crack down on white-collar crime.
First, let me declare my support for a proposed amendment to
the omnibus crime bill to enhance and enforce the civil and
criminal penalties for fraud against financial institutions.
This legislation, sponsored by Republican Leaders Bob Dole and
Bob Michel, and Senators Heinz and Garn, as well as Congressman
Wylie, will strengthen the resources our investigative and
prosecutorial tools in the service of justice. And it will
provide added protection to the victims of crime.
We want to allow the use of court-approved wiretaps in
investigating bank fraud. We also want Congress to authorize
federal regulatory agencies to ask the courts to freeze the
corporate and personal assets of defendants in civil cases
6
involving financial institution fraud -- so that they will not
leave the taxpayers high and dry. And we want to prevent rip-
off artists from using bankruptcy as a strategy to avoid paying
damages.
These are some of the legislative steps we can and must
take. But we must also build on our recent successes by taking
further administrative action. The Attorney-General will
establish, within the Department of Justice, a new unit to direct
and sharpen the Department's actions even further, while helping
to coordinate actions with other agencies.
Where new problems emerge in S&Ls, we will need to get
involved fast. That's why Attorney-General Thornburgh and
Secretary Brady have created a new approach -- Rapid Response
Teams against fraud -- teams of razor-sharp prosecutors and
auditors recruited from their departments and other agencies --
striking city by city -- teams that will jump right into the
paper chase, teams that will hit the trail while the trail's
still hot.
These teams will be deployed to help you -- the U.S.
Attorneys. And I am confident they will work well with you. I
have already seen the men and women of these two departments
working together, sharing a tenacious spirit, born of a thirst
All cleared
except Justice
for justice. Of course, we always quantify the importance of our
and Treasury.
They felt This, work together in terms of billions of dollars lost. But, perhaps
and sentence
on next page
could raise
it is more appropriate to remember why this mission is so
unwarranted
fears depositors, among
important to so many people -- a thought that will sustain you in
7
the months to come, as you sip cold coffee long after everyone
else has gone home. You will be working late because you will
not let those people be forgotten savers whose hard work and
must be
honest trust has been treated like a joke; elderly people whose
must be preserved
faith in the future has been repaid with bitter poverty.
It is your duty, your sacred duty, to right these wrongs, to
stand up for the vulnerable against the unscrupulous, the
guileless against the conniving. We will not rest until the
cheats, the chiselers and the charlatans spend a large chunk of
their lives behind the bars of a federal prison. 111
You do a difficult job in a spirit of professionalism. I
can only thank you, on behalf of all Americans, for your
dedication -- your dedication to justice.
Thank you for coming to Washington. May God bless each and
every one of you, and may God bless America.
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