UPDATED: The old video links are gone, but we’ve found and inserted new ones.
One of the most important stories you’ve never heard was told by Houston Post reporter Pete Brewton: How the deregulation of the savings and loan industry was used to enrich mobsters, cronies of George H.W. Bush, and the CIA operatives who waged an illegal war in Latin America.
His 1992 book, The Mafia, CIA, & George Bush: The Untold Story of America’s Greatest Financial Debacle, is a indispensable guide to one of the darkest moments in modern American history, and explores the story we tried to follow at the Sacramento Bee, until we were exiled to the night police beat.
In a remarkable pair of interviews, presented here in 12 You Tube segments, Brewton exposes the dark underbelly of deep politics that played out across the country during the high-flying financial industry before a collapse that echoes our current crisis.
While a few reporters worked to expose the hidden forces behind the S&L debacle by following the money, we’ve seen little similar work in the latest collapse, which is not surprising given the massive newsroom layoffs in the intervening years and the takeover of much of the press by the same financial forces responsible for the collapse.
His stories withheld and stymied, Brewton left the Post before its1995 demise and today teaches journalism at the Texas Tech College of Mass Communications.
The interviews were conducted 21 November 1992 by University of Texas, Austin, philosopher Douglas Kellner [now the holder of an endowed chair at UCLA] and Frank Morrow for the late, much-lamented series Alternative Views [for a detailed history see this PDF].
There are plenty of big names, including the late director CIA William Casey, New Orleans mob boss Carlos Marcello [who famously vowed to kill John F. Kennedy], Florida mob boss Santo Trafficante, George W., Jeb, and Neil Bush, former Secretary of State James A. Baker III, arms-for-Contras figure Adnan Khashoggi, arms dealer Manucher Ghorbanifar, former Texas Governor and Treasury Secretary John Connally, Oliver North, Lloyd Bentsen,
The second one-hour interview continues the banking tale, then focuses on how Brewton got the story and its impact on his own career. He begins by talking about something that should strike a familiar chord in light of our current financial crisis: That the S&L crashes of the 1980 were started by an artificial real estate bubble funded by the banks’ loose loan policies.
Brewton’s experience paralleled our own at the Sacramento Bee. Our approaches differed because we were looking at more than $100 million in foreclosures by one bank, the property sold off to a seven-step, daisy-chained, limited partnership pyramid for between twenty and fifty cents per dollar loaned.
We found mob involvement, both in loans made [one hefty loan bailed out a mob frontman’s Las Vegas casino] and as the main buyer of all those foreclosed officer towers, subdivisions, shopping centers, and family homes. Key players in our story included many Reaganites, including Attorney General William French Smith and Chicago [Capone] mob “associates.”
Just as Brewton had stories killed, so did we. And just as he pushed at the Post, we pushed at the Bee. Just as the mainstream media ignored Brewton’s stories, ours were ignored as well. In our own case, had the other media picked up on our work and folks in Washington had noticed, much of the S&L collapse could have been prevented, since our stories were written in 1983, and the major failures came some years later.
And now, on with the show:
On a personal note, the Bill Walters mentioned was a classmate of esnl’s at Fort Collins High School in Colorado, where Walters was the star quarterback and class president and esnl the briefcase-toting bespectacled nerd with the plastic pocket protector.
If you’ve stayed with us, you’ve just had a first-hand look at the way the world works, and what happens when reporters get too close.
And here’s a post with more on the CIA/S&L debacle, and another’s here. And here’s a story written about the closing of Brewton’s old paper on 17 April 1995 by owner Dean Singleton, the same media baron who engineered the takeover of most of the San Francisco Bay Area’s newspapers.